It's Budget Day

Shaw to tell nation how Gov't will finance $773-m in estimates for 2018/19

Thursday, March 08, 2018

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FINANCE and Public Service Minister Audley Shaw is scheduled to open the 2018/19 Budget Debate in the House of Representatives today, when he will inform the nation how the budget for the fiscal year will be funded.

The Government intends to spend $773.6 billion for 2018/19, with $560 billion allocated for recurrent (housekeeping) expenses and $213.6 billion for capital (development) projects.

Details of the projections are outlined in the Estimates of Expenditure, which were tabled in the Lower House on February 15.

On March 13, Opposition spokesman on finance Mark Golding will make his contribution.

The debate will continue on March 15, with the Leader of the Opposition Dr Peter Phillips making his presentation.

Prime Minister Andrew Holness will make his address on March 20, and the Finance Minister is scheduled to close the debate on March 21.

The Budget Debate provides the Government with the opportunity to outline the activities that will be undertaken for the new fiscal year, take stock of its performance over the previous fiscal year, measure its progress in relation to the targets previously set, and assess the effectiveness of its management of the country's finances.

And as Government prepares to outline how it intends to finance the $773.6-billion budget for 2018/19, the Ministry of Finance said it is important for citizens to understand the importance of the discussion and how it will impact their lives.

“Simply put, the budget proposes how much money the Government will allocate for the services it has to carry out each financial year and how it intends to source the funds to do so. It comprises recurrent (housekeeping) expenditure and capital (development) projects,” said the ministry.

The $560 billion allocated for recurrent expenses will cover salaries and wages for Government employees, upkeep of offices, factories, warehouses, etc, while the $213.6 billion for capital expenditure will be for projects in the areas of health, education, and road infrastructure, among others.

Financial analyst Dennis Chung, according to a JIS report, explained that like a household, the Government has to plan its spending.

“Even before you get your salary at the end of the month, what you'll do is put down how much money you expect to get in terms of salary and then how you intend to spend,” he said.

“You have mortgage payments, and there are certain expenses you have to make, for example school fees, and then what's discretionary; there might be some capital expenditure in terms of repairs and maintenance around your house,” he added.

Similarly, the Government will take income and expenditure into account in planning, tabling and debating the budget for the country.

Debt repayment accounts for 40 per cent of the $773.6-billion budget for the financial year, with the rest being allocated to ministries, departments and agencies.

Each citizen will benefit through the various programmes and policies implemented.

Through these allocations, public schools, hospitals and health centres, the security forces and many of the social services from which the public benefits will be funded.

The governor general, in the Throne Speech at the ceremonial opening of Parliament on February 15, indicated that the Government would be providing funding in the budget to build a new children and adolescents' hospital in Western Jamaica, construct and maintain rural water systems, complete a number of road improvement projects, as well as implement a number of measures to improve the justice system.

The Ministry of Education, Youth and Information is getting $104.6 billion, Ministry of Health has been allocated $66.16 billion, and the Ministry of National Security $78.4 billion.

For the Ministry of Economic Growth and Job Creation, $33.7 billion has been allocated; the Ministry of Justice has received $9.5 billion; and Office of the Prime Minister, $11.39 billion.

The budget is funded through revenue from taxes, including property, income and general consumption tax; non-taxation measures such as capital payments that come in grants from multilateral organisations; and loans.

The ministry of finance has indicated that there will be no new taxes for this fiscal year.

“Through prudent management of the public purse, the Government has steered the Jamaican economy along a path to prosperity, with the growth outturn at 1.1 per cent for 2017/18. The Ministry's Policy Paper for 2018/19 estimates a 2.5 per cent growth for the financial period,“ said the JIS report.

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