FINANCE Minister Dr Nigel Clarke on Tuesday tabled a revised budget in the House of Representatives, outlining that the planned expenditure for the current fiscal year is expected to be $60 billion higher than previously anticipated. Clarke said the increased allocation was due mainly to the Government’s response to the impact the Russia/Ukraine war has had on Jamaica. The additional sum has pushed the total planned expenditure this year to $972 billion.

The war, which began on February 24, sent food and fuel prices surging, pushing inflation in Jamaica earlier this year to an 11-year high, and in response Clarke, who had tabled the budget two weeks before, was forced to respond to help the most vulnerable.

A total of $7.2 billion was spent to help the most vulnerable and those sums are now being properly accounted for in the budget.

It includes the $2.2 billion spent between April and July under a co-pay arrangement for prepaid electricity users and households which use under 200 kilowatt hours of electricity each month. Also brought on the books is the $600-million gas relief grant and $200-million loan facility to owners of contract carriages and route taxis which are still being disbursed. Included also is $702 million which went to both Programme of Advancment Through Health and Education (PATH) and non-PATH beneficiaries to help students on welfare cope with transportation costs and for others who were given poor relief grants. Also recognised now in the budget is the $1.5 billion which went to poor households to help parents with back-to-school expenses. Public sector workers earning below $1.5 million also got help totalling $353 million, while the $150 million allocated to help truck water earlier this year to areas that were experiencing inconsistent rainfall or drought is also being accounted for in the expenditure.

But that was not all. With the hiking of interest rates to tamp down runaway inflation, both locally by the Bank of Jamaica and overseas by other central banks, the Government said interest expenses on the pulic debt to be repaid during the current fiscal year have gone up by $10.8 billion. The flip side of the higher interest rates is that the Jamaican dollar has remained stable over the last few months, and that stability will bring savings to the Government, resulting in principal payments on the debt being $4.8 billion less than originally budgeted for. The net effect is that debt repayment this year will go up by only $6 billion.

But the biggest increase in the budget, accounting for about a third, is the money that has been set aside to compensate public sector workers when the negotiations for the wage and fringe benefits are concluded. A sum of $21.1 billion has been set aside to cover the anticipated higher compensation with the Government seeking to wrap up the negotiations with trade unions and staff associations in the shortest possible time. Also contributing to the increase in compensation of employees is an amount of $2.2 billion requested by the Ministry of Health and Wellness to facilitate the payment of salary-related allowances.

That aside, monies for patching roads and drain cleaning, funds to purchase drugs and to settle bills owing by the regional health authorities, subvention to the Jamaica Urban Transit Company to help with fuel costs and other operating overheads, funds to purchase laptops for teachers, and to provide breakfast for PATH students, and expanding broadband in schools and an increase in the cash grants to PATH students were also recognised in the budget.

Funds were also shifted around, with monies previously allocated for one purpose now going to do something else. The biggest beneficiary of this was capital expenditure, chiefly to provide $4.1 billion to continue work on the South Coast Highway Improvement Programme. That reallocation means 50 buses which were to be provided to the JUTC will have to wait along with a delay in the widending and dualisation of Grange Lane in Portmore, St Catherine.

But spending plans have to be financed.

Clarke told the House that the additional $60 billion the Government is proposing to spend will be financed primarily through an expected $65.5-billion increase in revenue flows. The performance of revenues over the first half of the fiscal year has been significantly better than budgeted reflecting the higher-than-anticipated recovery of the economy from the impact of COVID-19, as well as the higher-than-expected inflation. At end-September 2022, total revenue flows were $40.4 billion above budget, including $35.0 billion from tax revenue, and this performance has been factored into the current forecast which anticipates total revenue flows of $815.3 billion for the fiscal year which ends on March 31, 2023.