Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, tabled the Second Supplementary Estimates of Expenditure for 2020/2021 in the House of Representatives on October 6.
It proposes overall additional expenditure of $15.7 billion to generate a total expenditure budget of $853.7 billion.
Minister Clarke said that the Second Supplementary Estimates reflects increased spending to meet coronavirus (COVID-19)-related needs in health, education and social welfare in the form of unemployment support.
The focus is on addressing the health requirements, assisting individuals who have lost jobs, and increasing public investment to assist in fast-tracking economic recovery.
An additional $1.5 billion will be provided to the Ministry of Health and Wellness to aid in the response to the pandemic, including a substantial increase in medical personnel; and providing $1 billion to the Ministry of Education Youth and Information to assist in the procurement of tablets for students in need.
The new recurrent spend will extend the Supporting Employees with the Transfer of Cash (SET CASH) and the Business Employee Support and Transfer of Cash (BEST Cash) components of the COVID Allocation of Resources for Employees (CARE) Programme to December 2020 ($5 billion, including utilisation of an existing $2.2 billion).
Previously announced elements of the CARE Programme, such as the back-to-school grant, are also being regularised under the Second Supplementary.
Dr. Clarke told the House that the Government is also increasing capital expenditure to support and catalyse economic activity.
“Proposed increases in recurrent and capital expenditure in the Second Supplementary Expenditure will be financed by the level of expected revenue over-performance as well as by further reducing the primary balance target from 3.5 per cent of gross domestic product (GDP) to 3.1 per cent of GDP,” Dr. Clarke noted.
He said that with the lower GDP growth projection and the prolonged intensity of the pandemic, some downward revision of the primary balance target was unavoidable.
“Increased primary expenditure of $16.6 billion proposed in the Second Supplementary Estimates is, therefore, facilitated by the $5.2 billion in additional revenue and $11.4 billion arising from the downward adjustment in the primary balance target,” Dr. Clarke explained.
“Parliament is asked to note that the downward revision to the primary balance target for this fiscal year will be addressed in subsequent years, consistent with our Fiscal Responsibility Law, to ensure that the 2027/28 timeline for achieving the debt/GDP of 60 per cent is met,” he added.
In the meantime, the estimates are to be reviewed by the Public Administration and Appropriations Committee (PAAC) on Thursday (October 8).