Prime Minister Dr Andrew Holness has pushed back against Opposition Leader Mark Golding’s comments on the Government’s approach to financing the budget by highlighting the wealth creation opportunities for Jamaicans from recent capital market events.

Holness made his comments Thursday during his contribution to the 2025/26 Budget Debate.

Golding, in his budget presentation on Tuesday, raised queries about the Government’s recent strategy to finance the trillion-dollar budget, which has been largely supported by the securitisation of future government cash flows/receivables and sale of certain State assets to the Jamaican public.

He expressed concern as he delved into the Government’s apparent plan to monetise another portion or $54.8 billion of its contractual cash flows in the upcoming budget.

However, Holness refuted Golding’s perspective on the Government’s use of cash flow securitisation, which is simply a way for an issuer or entity to sell a portion of its future income that it derives from an asset to other investors. That process usually involves the issuer being paid a discounted lump-sum value today by investors who participate in that investment opportunity.

“We have used it [proceeds from securitisation] to pay down debt, in other words relieving ourselves of current and future expense obligations. We have used it to create new infrastructure assets like the extension of Highway 2000 from May Pen to Williamsfield, which will enable us to generate more revenues in the future. There is absolutely nothing wrong with this; it is a transparent transaction where there is no risk to the Government. Indeed, it is a credit to Jamaica [that] the international capital markets look favourably at Jamaican securities,” Holness said in his presentation.

Golding’s gripe largely related to the recent securitisation of the Government’s (Airports Authority of Jamaica) future revenues from Norman Manley International Airport (NMIA). That process was completed last October and garnered significant demand in the international capital markets such that the offer was upsized from US$440 million to US$480 million ($75.44 billion). The proceeds from that capital market offer largely went towards financing the $25.12 billion in projected revenue losses for the 2024/2025 budget and the $45-billion Shared Prosperity Through Accelerated Improvement to Our Road Network (SPARK) Project.

The prime minister also referenced a previous contractual arrangement under the People’s National Party (PNP) Administration in 2001 in which the Government agreed to sell future bauxite at a guaranteed price. However, he expounded on that deal which, he said, left the previous Government severely exposed when the cost to produce bauxite had gone beyond its quoted price in that contractual agreement.

“The Bruce Golding-led Administration of 2010 was obliged to honour the volumes of bauxite to which the previous PNP Government had committed. Jamaica ended up having to pay US$31 million to the company that produced the bauxite to cover the loss,” Holness stated on Thursday.

“You can’t compare this foolishness of the PNP with our masterful management of the economy. There is a very popular song, it says they are not like us. We are not like them. Two different philosophies, and way of thinking when we say that we believe in fiscal discipline and the proper management of the economy because that is how we can genuinely show that we care for you,” he said.

The prime minister further explained how Jamaicans that bought ordinary shares in Wigton Energy Limited (formerly Wigton Windfarm Limited) and TransJamaican Highway Limited (TJH), former State-owned assets, during previous initial public offerings were able to receive dividend income and capital gains from their investment into those assets.

Wigton Energy listed at $0.50 in May 2019 and closed Thursday at $1.21, while TJH, which originally listed in March 2020 at $1.41/US$0.01, closed Thursday at $4.12/US$0.0260.

The National Road Operating and Constructing Company Limited’s (NROCC) offer for sale of TJH shares closed on Tuesday as the State entity sought to raise $6 billion to $9 billion.

Holness said that the offer was oversubscribed as it garnered more than $12 billion in subscriptions from more than 22,000 applications. As a result of this oversubscription, some investors are likely to receive a refund. Applicants in the offer will learn by March 26 the preliminary basis of allotment which will inform them whether or not they will receive all the shares that they applied for. The offer was priced at $3.60/US$0.0228 per share.

“Creating wealth and making it accessible to all is the DNA of this JLP (Jamaica Labour Party) Administration and this is how we will accelerate growth,” Holness said. “There are several other assets that the Government is preparing to bring to market so that ordinary Jamaicans can participate and share in the value they create when paired with private sector enterprise and innovation. At this stage, I can announce that the Jamaica Mortgage Bank is being prepared to come to market.”

TJH’s board declared a dividend of $0.1258 to be paid on April 24 to shareholders on record as of April 3. If TJH’s shares are allocated to investors after April 3 NROCC would also receive a $314.63 million gross dividend from TJH. That means NROCC would receive an estimated gross amount of $9.31 billion from its recent TJH shareholdings.

Also, the Government, through NROCC, is set to receive another US$20.30 million ($3.17 billion) from TJH when it officially completes the concession agreement for TJH to operate phase 1C of Highway 2000, which spans from May Pen to Williamsfield. Commuters currently pay no toll for use of the highway.

On Thursday, Holness also announced additional developments which, he said, will redound to the benefit of future generations. He said that the Government would seed the HOPE for Children Trust Fund with $200 million in the upcoming financial year, which will benefit children born after August 6, 2022, and are either wards of the State or part of a Programme of Advancement Through Health and Education (PATH) household. The proceeds from this trust fund would be accessible on or after a child’s 18th birthday and could be used to support education and skills training, home or commercial property ownership, or business investment.

Finance Minister Fayval Williams is scheduled to close the 2025/26 Budget Debate next Tuesday.