KINGSTON, Jamaica— The 2022/2023 Budget has been increased by $60 billion or 6.6 per cent and now stands at $972 billion.

The increased amount is reflected in the First Supplementary Estimates which were tabled in the House of Representatives on Tuesday by the Minister of Finance and Public Service, Dr Nigel Clarke.

An allocation of $21 billion to compensate public sector employees accounts for the lion’s share of the increased expenditure.

Clarke explained that “this arises primarily from the discussions with public sector unions and staff associations in respect of the compensation restructure programmed for implementation during this fiscal year”.

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.

A breakdown of the increase shows that $52.7 billion will go towards non-debt recurrent expenditure, capital expenditure will account for $1.3 billion and debt service $6.0 billion.

The revised Budget now has total non-debt recurrent expenditure of $592.2 billion consisting of recurrent programmes of $280.8 billion; compensation of employees totalling $311.4 billion; and capital expenditure of $66.4 billion. Debt service now stands at $313.4 billion.

A further breakdown of the $60 billion increase in expenditure on the recurrent side shows the following:

-The Ministry of Economic Growth and Job Creation will see a net increase of $5.1 billion of which $4.0 billion is to support island-wide drain cleaning, de-bushing and minor repairs to gullies; and approximately $3.9 billion for patching, local and general rehabilitation of scoured and damaged roadways island-wide;

-Ministry of Health and Wellness – a net increase of $3.6 billion to support the payment of arrears for goods and services in the Regional Health Authorities (RHAs) and the procurement of drugs and medical supplies in the RHAs ;

-Ministry of Transport and Mining – includes approximately $1.1 billion for the Jamaica Urban Transit Company towards the company’s fuel costs and other operating overheads;

-Ministry of National Security Group – $6.0 billion including Jamaica Defence Force – $1.5 billion; Police Department -$3.3 billion and Department of Correctional Services – $862 million;

-Ministry of Education – an allocation of $2.2 billion: including $530 million to supply laptop computers to teachers under the Heads of Agreement with the Jamaica Teachers Association; $592 million towards the production of breakfast/snacks for PATH students; $140 million to support critical repairs in identified schools;

-Ministry of Labour and Social Security – an additional $1.1 billion of the Ministry’s increase relates to an 18 per cent increase in the regular cash grants paid to PATH beneficiaries.

Capital expenditure reflects a net increase of $1.3 billion above the approved Budget, driven mainly by the additional allocation of $4.1 billion to the South Coast Highway Improvement Programme to facilitate mobilisation of the five remaining work packages and the installation of waterlines.

Clarke said the increase in debt service of $6.0 billion arises from the impact of increases in interest rates on interest payments. He said interest payments are expected to increase by $10.8 billion, reflecting the result of monetary actions being taken both locally and globally to address the inflationary environment.

“The $10.8 billion increase on interest payments is somewhat countered by a $4.8 billion decrease on amortisation payments which is due primarily to the relative stability of the exchange rate,” he said.

The minister said the increased expenditure will be financed primarily through an expected $65.5 billion increase in revenue flows. He noted that 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 of September, total revenue flows were $40.4 billion above budget including $35.0 billion from tax revenue.

“This performance has been factored into the current forecast which anticipates total revenue flows of $815.3 billion for financial year 2022/23,” Clarke said.

Meanwhile, he highlighted that the Russia/Ukraine conflict has contributed to disruptions in global supply chains which had initially been affected by the COVID-19 pandemic and has in particular “severely affected the supply of oil resulting in much higher than anticipated inflation across the globe as well as the deviation of other macro-economic indicators from prior assumptions”.

“The impact of the unanticipated Russia/Ukraine conflict on individual countries led to countries implementing various measures to address inflation and its impact on their population and on the wider macro-economy. Jamaica is among those countries,” said Clarke.

He stated that the un-programmed response to the impact of the Russia/Ukraine conflict on the country, which was required, is among the factors necessitating the tabling of the First Supplementary Estimates.