House Approves Second Supplementary Estimates

The Second Supplementary Estimates for the 2017/18 financial year, which reflect an increase of $9.78 billion, was approved by the House of Representatives on Wednesday (March 14).

The figures show that the Budget has been revised upwards from $805.4 billion to $815.3 billion.

The Estimates show an increase in the Recurrent (housekeeping) expenses from $515.4 billion to $523.8 billion, while Capital (development) spending has moved from $290 billion to $291.4 billion.

Minister of Finance and the Public Service, Hon. Audley Shaw, told the House that the second Supplementary Estimates will impact the Non-Debt Expenditure Budget, primarily facilitating the payment of the first year of the Government’s four- year wage offer to Central Government employees.

In addition, he said the Estimates will facilitate the reallocation of fiscal space to programmes/projects that are likely to utilise the budgetary allocation in the remaining weeks of the financial year, and paying down on some long-standing expenditure arrears being carried by government agencies.

Mr. Shaw informed that the total salary requirements addressed in the Supplementary Estimates amount to $8.9 billion.

He said of that amount, approximately $6.7 billion is to meet year one of the cost of the Government’s offer of a five per cent increase in basic salaries and linked allowances for the period April 1, 2017 to March 31, 2018.

The Minister also said that $2 billion is for legacy salary arrears due to medical doctors and medical consultants in the Ministry of Health and the Regional Health Authorities, which are due for payment in financial years 2018/19 and 2019/20.

Also, $215 million, representing revision of salaries to medical technologists, is to be paid.

“I want to indicate that it is not without precedence, where all negotiations are not concluded, that payments can still be made. As a Minister, I can assure you that on many occasions, we have made payments long before we have actually signed off on agreements. There is no shortage of precedents that have been set,” Mr. Shaw said.

“The point is, under the fiscal rules that we are operating, if we don’t pay this retroactive amount in this fiscal year, we would be challenged to pay it in the next fiscal year, given the requirements for achieving our wage to gross domestic product (GDP) target in the next fiscal year, which is a critical year under the programme with the International Monetary Fund,” he added.

The wage bill at the end of March 2019 is required by law to be at no more than nine per cent of GDP.

Meanwhile, some $1.5 billion has been allocated to address the $8-billion street lighting arrears to the Jamaica Public Service.

In addition, $1 billon has been set aside to undertake an islandwide patching programme to continue the rehabilitation of roads that were damaged by heavy rainfall earlier in the fiscal year; and $1.9 billion has been allocated to the Ministry of Education, Youth and Information to clear electricity arrears and to address the chronic indebtedness of primary and all-age schools to the National Water Commission.

A sum of $500 million has been given to the Jamaica Urban Transit Company (JUTC) to support its operations, and $484 million to clear judgment debt arrears.

“This allocation for judgement debt will bring the Government fully up to date. No arrears in judgement debt will in fact be there anymore,” Mr Shaw noted.

In the meantime, capital expenditure under the Ministry of Economic Growth and Job Creation reflects a net increase of $2.8 billion due mainly to the inclusion of the capital cost associated with the construction of the building to house the Ministry of Foreign Affairs and Foreign Trade.

The allocation of $2.7 billion, which is payment to the Consolidated Fund (no cash), represents the Jamaica equivalent of grant resources reported by the Government of China as having expended to date on the construction of the building.