National expenditure for the year to jump to J$893.0 billion

Jamaica’s Finance Minister Dr Nigel Clarke has outlined additional expenditure of J$25.8 billion in the Second Supplementary Estimates of Expenditure for 2021-2022, which he tabled in Parliament last evening.

Clarke told Parliament that the J$25.8 billion in additional expenditure is comprised of J$8.2 billion for Non-Debt Recurrent Expenditure and J$17.6 billion for Debt Service of which J$12.6 billion represents principal repayment.

He advised that the revised budget is comprised of compensation of employees amounting to $245.1 billion, recurrent programmes of J$296.0 billion, capital expenditure of J$54.2 billion and public debt service J$297.7 billion.

The finance minister disclosed that the additional expenditure will be financed through J$11.2 billion in additional revenue flows of J$5.3 billion in additional loan receipts and utilisation of an additional J$9.2 billion from prior year cash resources. 

Clarke explained that, with the additional expenditure contained in the 2nd Second Supplementary Estimates, the national budget for 2021-2022 has jumped to J$893 billion, noting that “the increased allocation is only on recurrent expenditure as capital remains at the level of the first supplementary with some reallocation between projects”.

Zooming in on the increased expenditure

He pointed out that the increase for public sector wages stems from the fact that much has transpired within the realm of the Jamaica Government subsequent to the passing of the First Supplementary Budget in October 2021.

Clarke pointed out that at the time of the First Supplementary Estimates there were no final settlements with any of the public sector bargaining, adding that since then 31 bargaining groups have settled.

“The premium for catastrophe bond issued earlier in the year was not fully captured on the budget and this is being addressed under the Second Supplementary Estimates,” Clarke advised parliamentarians.

He was quick to point out that the bond premium is covered by grants from the governments of the United Kingdom, Germany and the United States.

The finance minister told Parliament that the additional expenditure in the budget is accounting for the Government of Jamaica facilitated Special Employment Programme in December 2021 to assist some of those most vulnerable to the economic impact of the pandemic, which required additional funding and regularisation through the Second Supplementary Estimates.

According to Clarke, “the health sector continues to incur significant levels of expenditure for compensation given the extended hours being worked and have again indicated a shortfall on this year’s allocation. We have sought to address this in the Second Supplementary Estimates“.

He highlighted that, “since the First Supplementary Estimates, domestic interest rates have increased and the currency has depreciated resulting in increases in the debt service requirements. Assistance has also had to be extended to the National Water Commission and the Central Wastewater Treatment 2 Company to facilitate the repayment of maturing guaranteed debt. It should be noted that this support has contributed to a reduction of the public debt stock“.

These, Clarke articulated, represent “the major adjustments that have necessitated the Second Supplementary Estimates. However, there are a number of other expenses that we are seeking to address through this supplementary, such as additional requirements for the Ministry of National Security and the police, support to the National Solid Waste Management Authority and bank charges related to operations of the PATH programme”.