Is the Budget credible?

Arthur Hall, Senior Staff Reporter

THERE ARE conflicting views on the credibility of the almost $545 billion spending plan which the Government has announced for this fiscal year.

Finance Minister Audley Shaw is to tell the nation on April 28 how the Government will finance the Budget, but already, some analysts are claiming that the figures tabled in Parliament last Thursday are not worth the paper they were written on.

"I have some concerns about the budgetary process, not just the one that was tabled last Thursday," social commentator and attorney-at-law Dr Paul Ashley told Friday's Gleaner Editors' Forum.

"Every year we come and we present a mass of figures, but there is no analysis at the end of the financial year about how we have performed, and the final figures don't bear any relationship to the final outcome," Ashley said while describing the Estimates as a "Ponzi scheme".

"We start out (allocating) X for Y, and Y for this, but it doesn't turn out that way in reality.

"It is possible that the figures might be obsolete by the time we finish speaking, and I am questioning if there is sincerity in the figures presented," said Ashley.

He argued that in the past, administrations have presented numerous Supplementary Estimates, with no regard for the original figures.

That position was supported by university lecturer Richard 'Dickie' Crawford, who said there was nothing significantly new, meaningful, or different in the numbers presented by Shaw.

"I have some deep concerns against the background that we have had 15 consecutive quarters of no growth," said Crawford as he declared that his criticism was not targeted solely at the present administration.

Similar concerns were expressed by economic analyst Anne Shirley, who argued that the Estimates were no more or less credible than those presented to the country in the past.

"What we have inside of it is payment for debts, and those numbers look realistic.

"The next cost is wages and salaries, and about September, they (the Government) will make some payments, so look for a supplemental," Shirley said.

For fellow economic analyst, Dennis Chung, while Shaw's numbers in the Estimates are realistic, he would not be surprised to see Supplementary Estimates based on factors such as the industrial relations climate and adjustments that the country would normally see.

How money is spent

However, Chung argued that it was not how much that was allocated to the ministries, but how the money is spent.

"The expenditure really is not what is really going to tell us about what is going to happen going forward, because that is just a host of numbers put out there, and the fact is that we have had a lot of budget increases over the years.

"But what we have not had is an analysis of the value added for each dollar that we spent," said Chung.

"We go through this every year, and for political reasons, people say there is not enough money as expenditure on education or security, and that sort of thing, but how do we align the expenditure with the objectives that we set?" queried Chung.

Financial analyst John Jackson agreed that there was need to wait on the revenue plans, but he believes the Government will have no problems meeting its spending projections for the year.

According to Jackson, while the expenditure numbers may involve an element of politics, that is not a major factor.

"It seems like a reasonable set of numbers from what I have seen," Jackson told the Editors' Forum as he noted that a significant portion of the spending - interest cost and wages - is already "cast in stone".

"The Government has made use of some of the reductions in costs, interest cost being one such item," added Jackson.

He argued that the real revenue collected by the Government last year was in the region of $350 billion, and it should collect a little more than that this year.

Jackson also noted that last year was the first time in a long time that the Government spent less than had been projected.

The Standing Finance Committee of Parliament will examine the Estimates over three days, starting Tuesday.