Govt. to Reduce Fiscal Deficit

The Government is moving to reduce its fiscal deficit by removing a number of public entities from its budget and only partially funding others.
“For too long we have allowed some public sector bodies to incur significant sums of debt, which ultimately have to be absorbed by Central Government, thereby increasing the fiscal deficit,” Minister of Finance and the Public Service, Hon. Audley Shaw said today (April 8).
The Minister, who was opening the 2010/11 Budget Debate in the House of Representatives, stated that Air Jamaica, Sugar Company of Jamaica, Jamaica Urban Transit Company (JUTC) are examples of entities that have incurred significant sums of debt.
He pointed out that total expenditure for central government and public sector bodies is projected at $869 billion in Financial Year 2010/11, comprising recurrent expenditure of $634.6 billion and capital expenditure of $234.6 billion.
“Currently, we have 195 active entities and 43 inactive entities. It is projected that Central Government will fund 34 per cent of these entities, while another 24 per cent will be partially funded by the Consolidated Fund. The remaining 46 per cent is expected to generate adequate revenues to fully finance their operations, including remitting $23.37 billion to Central Government as corporate and other taxes,” Mr. Shaw said.
He further noted that the capital expenditure for the active self-financing entities is projected to increase by $30 billion this financial year, with the major portion of this expenditure being accounted for in the Urban Development Corporation, National Housing Trust, Port Authority, National Water Commission and the JUTC.
Of the 74 inactive public sector bodies, 31 are to be wound-up, 34 are to be merged with the existing operations and the remaining nine are currently under review to
determine their optimal mode of operation.