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News
BALFORD HENRY, Observer writer  
February 27, 2007

$14b budget hike

AFTER funding Cricket World Cup 2007, paying its employees higher wages and fringes and servicing its debts, government will have to find an additional $14 billion to fill the hole in the budget.

But shortly after Finance Minister Dr Omar Davies yesterday tabled the first supplementary estimates for 2006/2007, Opposition spokesman on finance and the public service Audley Shaw accused him of deceiving the public by “understating” the original estimates tabled last April. In fact, the Opposition spokesman ascribed the additional spending to what he termed the “deceptiveness” of Davies.

The total budget rose from $358 billion to $372 billion. The bulk of the increase was in terms of recurrent, or housekeeping expenditure, which rose from $211.7 billion to $224.5 billion.

Capital “A” expenditure, which involves regular government spending on projects, increased from $133 billion to $136 billion, while Capital “B”, which involves multilateral and bilateral spending, fell from $13.3 billion to $10.9 billion. Overall, capital spending rose by approximately $1 billion.

The bulk of the new spending was additional expenses due to increases in salaries and allowances for government employees, debt payments and funding for Cricket World Cup 2007.

But Shaw said the increase in the budget would have serious consequences.

“A lot of critical things now have to be sacrificed on the altar of higher public sector wages, higher debt servicing costs and higher Cricket World Cup 2007 payments,” Shaw said.

Included was the $1.9 billion cut from the educational transformation programme, despite an admittance by Education Minister Maxine Henry-Wilson in the House yesterday that some 3,800 additional high school spaces were needed in Clarendon and St Catherine, alone. She assured the House, however, that the need would be filled by September.

There were also significant cuts in funding for agriculture, health care, road repairs, water, courthouses, industrial mechanisation and tourism in the capital budget, as well as social programmes like the Possibility (Street Children) Programme and the social intervention aspect of the anti-crime initiative.

But, interest payment on public debt charges rose from $92 billion to $97 billion; some $8 billion was added to the $8.8 billion originally estimated for public sector salaries; and hundreds of millions more were added to the funding for CWC 2007 in various ministries, including national security, health and local government.

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