Gov’t Cuts Spending by more than $22 Billion

Government has cut spending by approximately $22.4 billion in the Second Supplementary Estimates tabled by Minister of Finance and Planning, Hon. Dr. Peter Phillips on Feb. 21, in the House of Representatives.

The new budget reflects total government expenditure of $525.2 billion for the rest of the fiscal year from the previous $546.7 billion.

The estimates show a decrease in the recurrent (housekeeping) expenditure from $356.4 billion to $348.9 billion, with savings of $9.8 billion, and reduction in both Capital A and Capital B from a total of $190.3 billion to $176.2 billion reflecting $12.5 billion in savings.

Dr. Phillips had indicated earlier this month that the budget adjustments will see sharp reductions in expenditure for 2011/12, which will carry over into the 2012/13 fiscal year.

As a result, there have seen cuts in the recurrent and capital budgets of several agencies. These include a $50 million reduction in the recurrent budget of the Customs Department from $2.4 billion to $2.3 billion; a $1.5 billion cut in the budget of the Police Department from $27.03 billion to $26.75 billion; a $53.1 million cut in the recurrent budget of the Tax Administration of Jamaica from $4. 353 billion to $4.3 billion; and a $102.904 million cut in the recurrent budget of the Department of Correctional Services from $4.5 to $4.4 billion.

Under Capital A, the $149.6 billion budget of the Ministry of Finance and Planning has been reduced by approximately $2.9 billion, reflecting a new allocation of $140.4 billion. Under Capital B, the Office of the Prime Minister saw a cut of $1.1 billion from its previous budget of $4.1 billion, to $2.8 billion.

The Supplementary Estimates are to be discussed by the Public Administration and Appropriations Committee (PAAC) next Tuesday (Feb.28).

The committee is to present its report to Parliament by Wednesday (Feb. 29) for review by the Standing Finance Committee and debate the same afternoon.

                                                           
By Latonya Linton, JIS Reporter