Additional expenditure to several public bodies spike budget

Durrant Pate/Contributor

Jamaica’s national budget for the current 2024/2025 fiscal year has jumped by $40.7 billion to $1.381 trillion, as a result of several factors mainly due to the expenditure due to damage caused by Hurricane Beryl on July 3 and the island’s altered macro-economic profile.

The First Supplementary Estimates of Expenditure, which was tabled in the parliament Wednesday by outgoing Finance Minister, Dr Nigel Clarke shows an increase in total expenditure and payments of $40.7 billion. The increased expenditure is entirely due to expenses on the recurrent side of the budget where both debt and non-debt expenses have increased. 

Recurrent programme expenses have increased by $31.3 billion, reflecting among other things the additional expenses undertaken to initiate recovery from the impact of Hurricane Beryl ($11.8 billion). 

Also included in recurrent programmes are additional subvention amounts to a number of state-financed bodies including the University of the West Indies, University of Technology, Jamaica Urban Transit Company, Montego-Bay Metro, National Water Commission, University Hospital of the West Indies, Transport Authority and the Jamaica Agricultural Commodities Regulatory Authority.

The list is completed by the Jamaica Racing  Commission, Jamaica Ultimate Tyre Company, Firearm Licensing Authority, National Solid Waste Management Authority and other agencies under the Ministry of Local Government and Community Development. 

Additional expenditure approved:

•  Transport Authority – $358 million 
• Firearm Licensing Authority – $150 million
• National Water Commission – $1,542 million
• Jamaica Urban Transit Company – $818.63 million 
• Jamaica Ultimate Tyre Company Limited – $155.83 million 
• Jamaica Agricultural Commodities Regulatory Authority – $150 million 
• Jamaica Racing Commission – $150 million 
• Montego Bay Metro Limited – $11.41 million

Other increased expenditure items

Municipal Corporations are also being allocated additional subvention amounts. In addition, recurrent programme increases include the provision of amounts related to the SPARK programme to facilitate preparatory activities such as design and the ordering of pipes for the two-year road rehabilitation initiative to transform the island’s roadways.

Public sector wages and salaries are also slated to be increased by $11.6 billion primarily due to higher than originally included third-year costs under implementation of the restructured public sector compensation system. Interest payments are estimated to be $9.6 billion greater than originally budgeted, primarily reflecting the impact of adjustments in interest rates.

The increase in recurrent expenditure is somewhat countered by a $12.1 billion decrease in capital expenditure, which represents a drop in the contingency provision for capital programmes given the need to accommodate spending associated with the recovery from Hurricane Beryl as well as the preparatory activities for the SPARK programme on the recurrent side of the budget. 

Financing of the increased expenditure

The additional total expenditure and payments of $40.7 billion will be financed primarily through estimated additional revenue and grant inflows of $40.2 billion arising primarily from additional non-tax revenue flows of $33.2 billion and tax revenue flows of $5.8 billion. 

The increased non-tax revenue flows include the higher than-estimated flows from securitization of the Norman Manley International Airport revenue flows that are due to the Government. Utilization of available cash resources of $4.4 billion will provide the additional financing required.