Jamaicans can expect the 2018/19 revenue and expenditure budgets to be tabled in the House of Representatives within the next 24 days.

Minister of Finance and the Public Sector Audley Shaw told the Jamaica Observer yesterday that the budgets will be tabled on either February eight or nine.

“I will be opening the budget debate in early March, and the process has to be concluded before the end of the month,” the minister added.

Asked what will be the focus of the budget this year, Shaw said that coming out of last week’s Cabinet retreat, the Government will be focusing on creating an environment that will encourage “greater and greater business confidence in the economy that will lead to more investments and more jobs”.

“We will be emphasising the areas in which we can stimulate investments, including lowering interest rates. We have to stimulate investments, so we will be focusing on financial inclusion and cheaper money for investments,” he added.

Shaw is expected to reveal some of the areas of economic focus over the next financial year when he speaks at Mayberry Investments Limited’s (MIL) monthly forum scheduled for this evening (Wednesday) at the Knutsford Court Hotel’s Blue Mountain suite, New Kingston.

Shaw was unable, however, to comment on the most recent developments pertaining to the completion of the current pay negotiations with trade unions representing public sector workers.

The Business Observer understands, however, that Prime Minister Andrew Holness will be meeting with the leadership of the trade unions by next week to seek some understanding on both sides, which could lead to a settlement of the current dispute by the end of the month.

In the meantime, various members of the Cabinet have been revealing proposals which are likely to form the basis of the economic and social trend in 2018/19.

PUBLIC SECTOR REFORM

Shaw informed the House of Representatives earlier this year that, in terms of the public sector reform, 84 entities have been identified for merger, reintegration, divestment, or to be closed.

He said that in the meantime, the Government has been introducing shared corporate services. Operating models are being developed for each of the proposed shared areas, including human resources management, finance and accounts, asset management, procurement, IT services, and public relations and communications.

The Ministry of Finance has been pursuing a Micro Credit Bill which will protect local microfinanciers from the fear that their funds my be used for illegal activities, while the Bank of Jamaica has been pursuing legislation which will introduce new regulations for credit unions.

Prime Minister Holness has already indicated that, in terms of reforming the public sector, the Ministry of Finance and the Public Service has been well advanced in reviewing current practices and developing a compensation policy for the Government. This is expected to be instrumental in informing the Government’s medium-term wages policy, consistent with the legislated nine percent of GDP wage bill ceiling

The reform of the pension system, which is crucial to sustaining the country’s fiscal programme, had been delayed to allow the Administration time to adequately review the Bill and assess the policy implications. This will herald a new policy for pensions in the public sector, with pensionable officers contributing five per cent of their basic salaries, and the establishment of a segregated fund for the contributions to be determined by the minister.

Holness has also expressed the Government’s desire for a performance-based public sector in order to establish the level of efficiency required to fuel more significant economic growth.

He noted that in the past, politicians had found that the easiest way to address the issue of unemployment was to expand the public sector. However, he says that it has never resulted in economic growth or a sustainable economy. In the new paradigm, he says that the public sector has to build a new partnership with the private sector, “because the real engine of growth is the private sector, and the growth of the public sector is to support the private sector”.

He says that the Government will also be seeking to make it easier for small, medium and micro enterprises to procure licences and permits, and to be able to comply with regulations, including paying their taxes

TRANSPORT POLICY

Minister of Transport and Mining Mike Henry, has already noted that, coming out of the three-day retreat, his ministry will be undertaking a review of the current national transportation policy which will include a merger of the Island Traffic Authority(ITA) and the Transport Authority.

Henry’s ministry has also indicated that it will be focusing on divesting the Norman Manley International Airport (NMIA) by June 2019.

Speaking with the Business Observer last week, he stated that the ministry will also be focusing this year on a transport policy which will increase involvement of the private sector in the transport sector.

Chief executive officer of the Airports Authority of Jamaica (AAJ) Audley Deidrick has confirmed that the bidders have been prequalified for the transaction since the bidding was launched in June.

MSMES

In November last year, Minister of Industry, Commerce, Agriculture and Fisheries Karl Samuda, announced new definitions for Micro, Small and Medium Size business operating in Jamaica.

According to Samuda, the definitions were proposed by the Bank of Jamaica (BOJ) and the Development Bank of Jamaica (DBJ) to make the MSMEs more closely aligned with developments in the current business environment and in line with international standards.

According to the World Bank, in November last year, “the economies of Latin America and the Caribbean continue to reform their business climate for small [and] medium enterprises, recording nearly 400 business reforms over the last 15 years”.

In fact, half of the 32 economies in the region implemented reforms in 2016/17 totalling 398.

Fifteen years ago, the World Bank said, it took 31.5 days to start a business in Mexico City. Today, that has been shorn to 8.5 days. Also today in Jamaica, which is ranked among the top countries for “Starting a Business”, it takes only three days to register a business, compared to 31 days 15 years ago.