As we prepare to hear this year's Budget Debate, it is important to remember how the process unfolded last fiscal year. This, in an attempt to get an understanding of the priority areas of spending as well as the country's main sources of revenues to offset these expenditures. This will help us to track if the country's scarce financial resources are being used to move the country holistically forward towards development. Due to debt obligations arising from Jamaica's high debt burden, Jamaica had to maintain a primary surplus of 7.5 percent to go towards debt servicing for the 2017-2018 fiscal year.
How Were The Monies Spent Last Year?
Last fiscal year, budgeted expenditures were more than $700 billion, 69 percent of this was used for recurrent expenditure, while the remaining 31 percent was used for capital expenditure on projects of some sort. On the revenue side, 70 percent of the revenues were estimated to be collected from taxes, 23 percent from loans, and the remainder of seven percent from other revenue including grants and capital revenue.
What Were The Main Expenditure Areas?
The main expenditure projects were, agriculture, where an estimated $588 million was to be spent; $74 million was to be spent on education; $1.87 billion was reserved for project in the health sector; $85 million for water and sewage; $19 billion was to be spent in transportation and communication and $415 million on environmental projects.
What Were The Main Agricultural Projects?
In this sector $126.5 million was to be spent on the Rural Economic Development Initiative; $131.7 million was to be spent on the Jamaican Banana Accompanying Measures (JBAMS), and $180 million to be spent on the Agriculture Competitiveness Programme.
What Were The Main Educational Spending Areas?
The Education System Transformation Programme was to receive $455 million and the Construction of Early Childhood Institutions Project, $100 million.
What Were The Main Health Projects?
A total of $744 million was earmarked to support to the National HIV/AIDS Response in Jamaica; $589.8 million will be spent to support the Programme for Reduction of Maternal and Child Mortality in Jamaica; $492 million will be spent on the HIV Prevalence in most-at-risk population; $10 million is reserved to be spent on institutional strengthening to improve national surveillance, prevention, and control of infectious diseases while $24 million will be spent to strengthen the overall health systems in Jamaica.
What Were The Main Housing, Water And Sewage Allotments?
The integrated management of the Yallahs/Hope River watershed area was allocated $80 million.
What About Transport And Communication
The sum of $46 million will spend to upgrade the international postal system; $18.7 billion has earmarked to be spent on major infrastructure for development programme and the Southern Coastal Highway Improvement Project is budgeted $246 million. This year, the Trifold National Transport Repository Project, the Transportation Infrastructure Rehabilitation Programme, Road Rehabilitation Project and the Rural Road Rehabilitation Project will receive no attention this year.
What About The Environment?
The Pilot Programme for Climate Resilience II - Adaptation Programme and Financing Mechanism was budgeted $338 million. The Integrating Water, Land and Ecosystems Management in Caribbean Small Island Developing States was budgeted $28 million, while the Third National Communication and Biennial Update Report to the UNFCCC was allocated $19 million and the Portmore Hagen Climate
How Will Jamaica Borrow, And How Much Will It Spend On Debt Servicing?
Public debt servicing for the 2017-2018 financial year was $172.5 billion; $102.44 external while $70.1 is internal. Total bilateral loans for the 2017-2018 financial year was estimated $11.4 billion which is $5.5 billion more than the $5.9 billion borrowed for the 2016-2017 financial year.
How Much Did The Country Borrow For The 2017-2018 Financial Year?
Total external loans were estimated to be $70.6 billion for the financial year 2016-2017. For the 2016-2017 financial year, total external loans were $47.4 billion. Domestic loans have increased from $41.9 billion and the estimate for the 2017/2018 financial year is $89 billion. Total loans; domestic, external and bilateral is $159.6 billion for the 2017-2018 financial year as opposed to the $89.3 billion borrowed in the 2016/2017 financial year.
Where Will The Tax Revenue Come From?
Tax revenues projected to increase during the 2017-2018 financial year as a result of three main sources, income tax, general consumption tax (GCT) and special consumption tax. Revenue receipts from income tax were expected an increase by about $20 billion, revenue receipts from GCT on imports were expected to increase by about $9 billion, while GCT collected locally is expected to increase by about $6.6 billion. Along with GCT, revenue from Special Consumption Tax (SCT) on imports and SCT on local goods are expected to increase by $3 billion each, an increase of $6 billion in total for the $2017/2018 financial year. Import duties were estimated to increase by $4 billion over last year.
Published: Wednesday | February 14, 2018, | 12:00 AM Dr. Andre Haughton Department of Economics
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