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Speech

On Tuesday, the Minister of Finance will be tabling in Parliament the budget for the new financial year. You would have been aware of some of the difficult challenges we have had to grapple with in constructing this budget. When the debate is held, we will outline the tough choices we have had to make and why we had to make them.
A country’s budget is no different from that of an individual, a family or a business. There are expenses you have to meet, bills you have to pay. And if your income is insufficient to meet you expenses, you have to borrow. But there is a limit to how much you can borrow because you can’t borrow more than you can afford to pay back. So, when your income goes down, you have to cut your expenses. This is not high science; it is commonsense reality.
The income side of the budget has been hurt by the global economic crisis. When businesses are forced to cut back and lay off workers, we collect less income tax. When bauxite companies are forced to close down, we lose the bauxite levy that we would normally collect. When remittances slow down because Jamaicans abroad have lost their jobs, those of you who normally benefit from these remittances, have less money to spend, so we have less GCT to collect.
Therefore, just like many of you, we have had to cut back. But there are some things that we can’t cut back on. We can’t cut back what we are spending to fight crime, educate our children, provide healthcare and assist the pensioners and the very poor.
These are vital services on which, even in these hard times, we need to spend more, not less. So, deeper cuts have to be made in other areas. We have no choice.
We are not alone in this.
Almost every country in the world is struggling with its budget as a result of the global crisis. The United States, the richest country in the world, presented a budget with a fiscal deficit of 12.3% — borrowing more to spend more! Britain resorted to printing money –