THE first supplementary estimates for Government's 20I2/20I3 budget show reduced spending, however, this isn't necessarily good news for the Ministry of Finance.
Financial Secretary Devon Rowe said that the Ministry of Finance and Planning is concerned about the $2.4-billion underspending (failure to spend the financial resources allocated to them), which mainly affects vulnerable bilateral/multilateral projects run by government ministries, departments and agencies.
Rowe told the Public Administration and Appropriations Committee (PAAC) last Wednesday that the underspending was not by design, although it helped the Government to negotiate some $10 billion in lost tax revenues up to December.
He said that his ministry shared the concerns of the PAAC that the delays would come back to haunt the Government in terms of increased costs. He also disclosed that the Ministry of Finance would be doing a comprehensive review to determine how so much of the ministries' and agencies' allocations were not utilised.
Although the figure of $12 billion in underspending appeared in the Ministry of Finance and Planning's budget tabled last week in the House, what really happened was that the $12 billion allocated for contingencies was eventually transferred to the various affected ministries to cover salary arrears ($7.6 billion); travel arrears owed to travelling officers ($1.3 billion); and teacher reclassification ($1.8 billion). There was also an allocation of $500 million to recruit new members of the security forces.
The Government saved $7 billion from lower-than-projected interest rates on its bonds -- which bombed -- and US and euro exchange rates. The Ministry of Finance saved an additional $1.1 billion from lower-than-projected exchange rates.
The Government also saved $949 million from the discontinuation of the LNG project; $88 million from delays in the completion of the Simon Bolivar Centre in downtown Kingston; $120 million from delays in implementing projects such as the Fiscal Administration Modernisation Programme, which is financed by a $65-million loan to improve customs and tax collections and manage debt and government payment operations.
Government also saved $48 million from delays in constructing a sea wall in the vicinity of the old Myrtle Bank Hotel in downtown Kingston, which is expected to be the site of the new home of the Ministry of Foreign Affairs and Foreign Trade.
In terms of social security programmes, many social intervention programmes designed to assist inner-city and other poverty-stricken communities showed huge underspending, including the Citizens Security and Justice Programme. The multifaceted crime and violence prevention initiative focusing on building community safety and security and now social intervention, did not spend some $55 million it was allocated.
Also, the Poverty Reduction Programme did not spend its $40 million.
The Ministry of Justice did not utilise $127 million which should have been spent on the Justice Undertakings for Social Transformation (JUST) and National Child Diversification Programme. JUST aims to foster an improved sense of security for Jamaicans by strengthening the justice system.
The National Child Diversion Programme did not spend some $26 million it should have used on sensitising prescribed professionals on the need to report child sexual abuse cases; solicit Cabinet's approval and implement the National Child Diversion Policy; establish implementation standards, codes and guidelines for the Child Diversion Programme; develop a case management database for all key stakeholders; and train key personnel of the child diversion committees.
PATH beneficiaries also felt the pinch, as nearly 60,000 of them will not get full benefits for the rest of the 2012/13 budget period totalling over $40 million, since they failed to meet the requirements for its education and health programme for children.
Delays also led to underspending on: the Education Transformation Programme ($319 million); enhancement of basic schools ($36.9 million); early childhood development ($25 million); and UTECH enhancement ($175 million).
The Ministry of Youth and Culture underspent $120 million due to the ongoing review of its Youth Development Programme.
The Ministry of Agriculture and Fisheries underspent $280 million, including $190 million for its agricultural competitiveness programme.
The Ministry of Science, Technology, Energy and Mining failed to spend some $665 million due to implementation delays in its World Bank Energy Security Projects.
There were some areas of increased spending, however, including $53 billion in the Ministry of Education to cover salary increases and travel arrears for staff and teachers. The Ministries of National Security/Police Department received $2.6 billion to cover similar arrears.