Minister of Finance, Planning and the Public Service, Dr. the Hon. Peter Phillips, said that the 2nd Supplementary Estimates for the 2011/12 financial year, will be tabled in the House of Representatives on February 21.
The budget adjustments, he said, will see sharp reductions in expenditure for 2011/12, which will carry over into 2012/13.
He noted however that even with the contraction in expenditure, there will be measures to protect the “most vulnerable,” with funds utilised from state agencies and existing programmes to generate employment. This will result in the identification of some “$4 billion for the Jamaica Emergency Employment Programme (JEEP),” he stated.
Dr. Phillips was addressing Wednesday's (Feb. 8) Jamaica House press briefing at the Office of the Prime Minister, said the cuts are based on the fact that there were a number of missed targets, with a financing gap of about $10 billion.
He informed that the five per cent primary surplus target for the current fiscal year will not be met; tax revenues are projected to be down by $14.6 billion, which is 6.6 per cent below the revised target, with indications of a continuation of the shortfall through to March 2012.
He also disclosed that revenue and grants are estimated to end up at $25.1 billion, which is 7. 2 per cent below revised estimate. The shortfall, he said, is “because of the inflows from the IMF (International Monetary Fund) programme, which will not be forthcoming, and there was no disbursement of programme grant receipts from the European Union (EU) due to the delay in the Standby Agreement (SBA) review.”
The Minister also stated that there had been additional expenditure demands, such as amounts allocated for the holding of General Elections in December 2011 and the purchase of vehicles for the security forces, while there were additional recurrent costs including Jamaica Development Infrastructure Programme (JDIP) overruns.
He further mentioned commitment fees on loans for additional buses and the seven per cent public sector wage settlement, which was not included in the original 2011/2012 budget and which contributed to a $7.2 billion increase in ‘Wages and Salaries’ from $133.83 billion to $141.05 billion in the revised estimates.
With respect to Ministries, Departments and Agencies (MDAs), the Minister informed that in December 2011, these entities “reported recurrent expenditure arrears of $5.3 billion, with electricity, including street lights, and drugs and medical supplies being the main contributors to these outstanding amounts.
On the capital side, there were arrears, as at January 2012, of some $7. 7 billion including JDIP overrun of some $2. 2 billion, and revenue shortfall of $5.2 of billion from Clarendon Alumina Productions (CAP).
Stating that the fiscal deficiencies will negatively impact the new budget, the Minister stated that “given the fiscal challenges in the 2011/12 financial year, the greater portion of these arrears will be rolled forward into the 2012/13 financial year. This will result in significantly reduced capacity for new expenditures in 2012/13."
By Allan Brooks, JIS Senior Reporter