Tightrope - Shaw tables revised Budget

Arthur Hall, Senior Staff Reporter

Finance Minister Audley Shaw and his team have engaged in a major juggling act to present an almost unchanged spending plan for the fiscal year.

The first Supplementary Estimates for the 2010-2011 fiscal year show the Government planning to spend $503.7 million, down from $503.9 million initially budgeted.

But the $262-million reduction in the Budget does not reflect the roller-coaster twists and turns engaged in by the finance ministry.

A breakdown of the figures shows Shaw chopping just over $2 billion from the recurrent side of the Budget, while adding $1.7 billion to the capital side.

However, the total numbers tell only a fraction of the tale of the Supplementary Estimates, which are to be debated in Parliament next week.

On the recurrent side, the Government expects to enjoy a net saving of $6 billion, reflecting lower-than-projected interest payments brought about in part by the Jamaica Debt Exchange (JDX).

There is also a $629-million saving resulting from lower-than-programmed interest rates and delays in the assumption of debts related to the divested Air Jamaica.

Just under $1.4 billion is also transferred from the finance ministry's contingencies provision to meet payments of arrears in salaries to public-sector groups.

The estimates also show a $1.3-billion increase in the recurrent budget of the Ministry of Education and a $1.8-billion hike in the budget of the Ministry of Health. The police have received a $276-million increase in their recurrent budget, while the Ministry of National Security gets $948 million more.

The additional money to the education and health ministries is mostly to meet arrears in compensation for teachers and nurses, although $435 million is allocated to make outstanding payments to suppliers of drugs and medical services.

National security gets additional housekeeping money to pay salary arrears and to offset the cost of the west Kingston incursion in May.

There is a similar juggling of the money on the capital side of the Budget, with the Ministry of Transport and Works - as expected in the aftermath of the devastation caused by Tropical Storm Nicole - being the big winner.

The Mike Henry-led ministry gets a total of $2.9 billion, which reflects cuts to some projects and additional expenditure on others.

The estimates provide for an additional $1.5 billion for Transport and Works to deal with Tropical Storm Nicole restoration work, and $700 million for rehabilitation work on the Bogue Road in St James.

There is also a provision of a further $2 billion to the Jamaica Urban Transit Company to pay for 100 new buses and $88 million to complete the R.A. Murray Bridge Development Programme.

The capital side of the Budget also sees a net $1.4-billion reduction in the allocation to the finance ministry.

The big saving in this area is $4 billion on the costs associated with the divestment of Air Jamaica, resulting from the exchange-rate appreciation and lower-than-projected liabilities.