Finance Minister Dr. Nigel Clarke presented a J$803bilion budget to the parliament on Thursday announcing a J$385.6 recurrent expenditure allocation for the Ministry of Finance and Public Service. This represents over to 58 per cent of the total budget.
The next biggest allocation of J$109.4b representing 16 per cent, went to the Ministry of Education, Youth and Information which also received a capital expenditure budget of J$5.7b.
National Security received J$72.4b recurrent and J$20.2b which represents the largest portion of the capital expenditure budget (34%).
Clarke said the budgetary allocation for national security reflects the level of priority government places on improving security for the citizens of Jamaica.
“Mr. Speaker the dedication of significant resources to national security arises out of the Government’s conviction that the high incidence of violent crime is a significant source of inequity in Jamaica.
“Jamaicans, who live in areas subject to consistent violence, or under the control of organized crime, are denied an equal chance at life. Due to the restricting nature of pervasive violent crime, they are victims of unequal access to services and unequal opportunities in the work place.
“If we care about equity and justice we must care about national security not for some, but for all,” the Finance Minister said.
In what was his maiden presentation Clarke told legislators that though Jamaica was one of the most indebted countries of the world, it is now has a positive fiscal trajectory and has become “a shining example to the world of what can be achieved when there is unity of purpose.”
He said when the current fiscal year ends on March 31, Jamaica’s debt-to-GDP ratio will be near 96 per cent, the lowest debt level for Jamaica, in nearly two decades; and it will be the first time below the 100 per cent for the same period.
Clarke boasted of the country being close to completing its engagements with the International Monetary Fund (IMF) after entering into a precautionary arrangement with the fund almost three years ago.
“What started as an IMF programme became Jamaica’s programme with IMF support,” Clarke told legislators.
“The Andrew Holness Government terminated the US$930m Extended Fund Facility (EFF) with the IMF, six months into office which was also six months before the maturity of the EFF.
“With the EFF, Jamaica borrowed money from the IMF. In its place Jamaica entered into a larger US$1.6 billion Precautionary Standby Arrangement.
“We are now 2 and a half years into this Precautionary Standby Facility, with 6 months to go and Mr. Speaker, I am proud to say that…so far….Jamaica has had no need to draw down on and borrow funds from the IMF.”
The Finance Minister also reported that the country has had low, stable inflation for four years with domestic interest rates at levels that never before seen in the country.
“The Central Bank has lowered the policy rate four times this fiscal year to a record low of 1.5 per cent in February 2019.
Market interest rates for individuals and businesses have never been lower. Many individuals and businesses are now able to access single digit interest rates on Jamaican dollar loans, something that would have been deemed unattainable, unthinkable a few years ago,” Clarke told legislators.
In his presentation titled “Growth with Equity” Clarke also outlined plans to remove some taxes and a reduction on others.
The minimum business tax of J$60,00 dollars will be abolished as of April 1, while taxes on property transfers, student loans and stamp duties will see a significant reduction.
Opposition Spokesperson on Finance, Mark Golding, will respond to the budget presentation on Tuesday, March 12, while leader of the Opposition, Dr. Peter Phillips, will make his contribution to the debate on Thursday, March 14.
Prime Minister, Andrew Holness, will speak in the Budget Debate on Tuesday, March 19, and the Finance Minister will close the Debate on Wednesday, March 20.