Gov't proposing approximately $60 billion increase in National Budget

The Government is proposing to increase the National Budget by approximately $60 billion.

The additional spending is contained in the First Supplementary Estimates 2022/2023, which was tabled in the House of Representatives this afternoon by Finance Minister Dr Nigel Clarke.

The Parliament previously passed a budget of $912 billion for the 2022/23 fiscal year.

Among other things, the additional spending is to cover public sector compensation, draining cleaning and road patching, help for PATH students, support for the Jamaica Urban Transit Company (JUTC), and debt payment.

Clarke said the increased spending is made possible by better-than-expected revenue inflows.

Here's a breakdown of the proposed allocation

Recurrent Programmes

Ministry of Economic Growth and Job Creation – a net increase of $5.1 billion: which includes $1.4 billion to support islandwide drain cleaning, de-bushing and minor repairs to gullies; and approximately $3.5 billion for patching, local and general rehabilitation of scoured and damaged roadways islandwide.

Ministry of Health and Wellness – the estimates reflect a net increase of $3.6 billion to support the payment of arrears for goods and services in the Regional Health Authorities (RHAs) and the procurement of drugs and medical supplies in the RHAs.

Ministry of Transport and Mining – includes approximately $1.1 billion for the Jamaica Urban Transit Company (JUTC) towards the company's fuel costs and other operating overheads.

Ministry of National Security – $6.0 billion including Jamaica Defence Force - $1.5 billion; Jamaica Constabulary Force -$3.3billion, and Department of Correctional Services - $862 million.

Ministry of Education – an allocation of $2.2 billion: including $530million to supply laptop computers to teachers under the Heads of Agreement with the Jamaica Teachers' Association (JTA); $592 million towards the production of breakfast/snacks for PATH students; $140 million to support critical repairs in identified schools; it should be noted that $270 million towards expansion of broadband in schools is reflected in the Ministry of Science Energy and Technology budget to be executed by eLearning.

Ministry of Labour and Social Security – an additional $1.1 billion of the MLSS's increase relates to an 18% increase in the regular cash grants paid to PATH beneficiaries.

Compensation of Employees

An increase of $21.1 billion is proposed for compensation of employees. This arises primarily from the discussions with public sector unions and staff associations in respect of the compensation restructure programmed for implementation during this fiscal year.

Also contributing to the increase in compensation of employees is an amount of $2.2 billion requested by the Ministry of Health and Wellness to facilitate the payment of salary-related allowances.

Capital Expenditure

Capital expenditure reflects a net increase of $1.3 billion above the Approved Budget, driven mainly by the additional allocation of $4.1 billion to the South Coast Highway Improvement Programme (SCHIP) to facilitate mobilisation of the five remaining work packages and the installation of waterlines;

Of the additional requirement for the SCHIP, $2.8 billion was reallocated from the Ministry of Finance's Capital Contingency Provision for New Projects; $1.2 billion to the Ministry of Transport and Mining and the Ministry of Economic Growth and Job Creation for the acquisition of the 50 buses for the JUTC; and $400 million to commence implementation of the Widening and Dualisation of Grange Lane, St Catherine.

Debt Service

The indicated increase in debt service of $6.0 billion arises from the impact of increases in interest rates on interest payments. Interest payments are expected to increase by $10.8 billion reflecting the result of monetary actions being taken both locally and globally to address the inflationary environment.

The $10.8 billion increase on interest payments is somewhat countered by a $4.8 billion decrease on amortisation payments which is due primarily to the relative stability of the exchange rate.

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