$20.7 Billion to protect the most Vulnerable

Finance and Planning Minister, Dr. the Hon. Peter Phillips, says despite budgetary resource constraints, the Government has established a protected spending floor of $20.7 billion to cover critical social programmes for the society’s most vulnerable.

These programmes include: the Programme of Advancement through Health and Education (PATH); School Feeding Programme; Indoor and Outdoor Poor Relief Programme; Subsidy to Basic Schools; rehabilitation grants, drugs, and medical supplies; grants to children’s homes and places of safety; and youth employment, among other interventions.

He emphasized that all these areas “have been protected and the expenditure has been preserved,” adding that expenditures “will be in line with the projected amounts appropriated in the original budget.”

Making his presentation in the debate on the First Supplementary Estimates of Expenditure for 2013/14, which were approved at Thursday’s (March 6) sitting of the House of Representatives, Dr. Phillips advised that $4.1 billion was allocated from the 2013/14 budget for PATH to provide conditional cash grants to approximately 410,000 beneficiaries.

He said a 15 per cent increase was provided for all beneficiaries in August 2013, with the exception of the elderly, who received a 67 per cent increase.

“Between April and October (2013), over 336,000 persons received grants under the programme, 243,000 children and 88,000 adults. Total disbursements in PATH cash grants at the end of October was $2.8 billion. Two other payments will be made during this financial year, covering the period for December 2013, which was made, and February 2014. All PATH beneficiaries will receive a further 15 per cent across the board increase in the coming financial year,” the Minister added.

Dr. Phillips pointed out that an allocation of $2.7 billion, which was approved in May 2013, for the PATH school feeding programme, “is on target,”  noting that “for the period April to October 2013, a total of $1.9 billion was disbursed under this programme.”

Meanwhile , Dr. Phillips said the administration recorded $10.5 billion in savings on public debt servicing costs during the 2013/14 fiscal year.

He noted that debt service reduction was one of the primary focus areas in the Estimates, which also reflects a realignment of budgeted expenditure within the context of revenue inflows; and re-allocation of expenditure to meet critical payments and reduce expenditure arrears build-up.

The Minister explained that re-alignment of expenditures was consequent on a shortfall in revenues and grants. He said inflows from both sources for the year, up to December 2013, totalled approximately $274.6 billion, a 3.8 per cent shortfall of $10.9 billion, against the projected target.

He advised that the main areas recording lower than budgeted tax revenue inflows were the Special Consumption Tax (SCT) on imports, particularly oil; and shortfalls in Pay As You earn (PAYE) revenue, education tax, customs duty, and General Consumption Tax (GCT).

“With the revenues underperforming, it became necessary to realign the expenditure budget to a level which could be supported by the revenues. This meant that we had to curtail expenditure and to defer some payments into the next fiscal year. As I have said, we are determined to live within our means, and if the revenues don’t come in, we will have to make adjustments on the expenditure side,” the Minister  emphasized.

Dr. Phillips advised that the government’s two main revenue collection agencies, Tax Administration Jamaica (TAJ), and Jamaica Customs, “have strengthened their revenue collection efforts as another means of addressing the problem.”

The Minister said first quarter tax revenue figures for 2014 show that January inflows “were on target.”

In the  First  Supplementary Estimates for the current fiscal year, the overall  budget has been reduced from $520 billion to $500 billion.