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Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, tables the 2021/2022 Estimates of Expenditure in the House of Representatives on Thursday (February 18).

Gov’t tables $830-billion expenditure with focus on COVID recuperation

Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, tables the 2021/2022 Estimates of Expenditure in the House of Representatives on Thursday (February 18).

Jamaica’s Minister of Finance and the Public Service Dr Nigel Clarke yesterday tabled a $830-billion budget for fiscal year 2021/22, which, he noted, is strategically aimed at economic recovery following the ravages of COVID-19 in 2020.

Minister of Finance and the Public Service, Dr Nigel Clarke, tables the 2021/2022 Estimates of Expenditure in the House of Representatives on February 18. (Photo: Donald De La Haye)

He said the Government’s task this year is to begin the recovery programme, which he hopes will commence in the April-June first quarter of fiscal 2021/22.

“Our budget is within the strictures with which we have to operate and, to the greatest extent possible, is aligned with this objective,” he said in an unusually lengthy introduction to the estimates of expenditure (budget) after they were tabled in the House of Representatives.

The $830-billion is approximately $20 billion less than the 2020/21 budget which was supported by three supplementary estimates. It is made up of $776.5 billion in recurrent (housekeeping) expenditure and $54 billion in combined capital expenditure.

“There have been 130,000 job losses in Jamaica, as a result of the pandemic, and none of them are from the public sector.”

– Finance Minister Dr Nigel Clarke

Last year, the Government spent $798 billion on its housekeeping budget and $54.2 billion on capital expenditure.

Dr Clarke highlighted a $60.7-billion Social and Economic Recovery and Vaccines for Jamaica (SERVE) Programme, which will finance the procurement of vaccines and the spend on infrastructure.

“I wish it could be bigger  $100 billion, $200 billion, perhaps. But this isn’t possible without so-called “running with it” and racking up debt that we cannot sustain; and punishing the poor and vulnerable with the consequences, or by stopping the provision of certain services by the Government, both of which would be undesirable,” he commented.

An aerial view of New Kingston, Jamaica. (Photo: wikicommons)

He said that the SERVE Jamaica Programme, in addition to the procurement of vaccines, will finance a record spend on infrastructure to drive jobs and economic activity, improve productivity and strengthen resilience, finance social support for vulnerable people and those who are most affected by the pandemic, as well as improvements in digital connectivity and Wi-Fi for schools and communities.

It will also finance support for businesses, including agriculture, boosting production that will provide the foundation for economic recovery.

Dr Clarke also highlighted the performance of the Bank of Jamaica (BOJ) which has made a profit for each of the last three years. This has led to a one-off dividend of $33 billion from the bank, which the Government is expected to collect during the first week of April.

He said those funds will help to facilitate the SERVE Jamaica Programme including $10.5 billion in special resources for the Ministry of Health and Wellness made up of $6 billion for vaccines, $1 billion for personal protective equipment, $1 billion for drugs, $2 billion for regional health facilities, and $500 million for additional COVID-19 related expenditure.

However, he said the Government will be seeking a one-year delay with respect to the implementation of a new compensation structure for the public sector as the State focuses on facilitating the country’s recovery.

“We have undergone a thorough review and examination of public sector compensation, as we promised we would. [But] given the massive impact of the pandemic, we do not have the resources to begin the implementation of the review and finance our recovery at the same time,” he stated.

“Furthermore, it is critical that whatever resources we can corral are used this year on vaccines, the distribution of vaccines, our social and economic recovery, inclusive of jobs as well as social support of those who have been hardest hit by the pandemic,” he noted.

He added that, unlike other countries, Jamaica’s public sector has been largely shielded from the financial impact of the pandemic.

“There have been 130,000 job losses in Jamaica, as a result of the pandemic, and none of them are from the public sector,” he pointed out.

The budget also includes $1.7 billion for rural farm roads and productivity incentives, to boost agriculture; $1.8 billion to expand Wi-Fi and broadband coverage in schools and communities, in particular in rural areas; as well as $8.1 billion in targeted social support above and beyond what is usually provided.

The estimates will be sent next to the auditor general and Parliament’s Public Administration and Appropriations Committee, which will review and make a report to the House of Representatives, where it will be reviewed by the Standing Finance Committee of the House, after which it will be debated.

–Balford Henry