Majority of additional expenditure going to Jamaican public health sector to fight COVID-19

Jamaica’s first supplementary budget for the 2021/2022 financial year has shown a substantial, $33 billion increase from the original budget of $830.78 billion passed back in April.

The supplementary budget, which was tabled in Parliament on Tuesday (September 28) by Finance Minister Dr Nigel Clarke, reveals total revenues have been revised upwards by $33.5 billion for the full fiscal year. The expenditure increase of $33 billion is comprised of increases to recurrent non-debt expenditure of $27.5 billion and interest payment expenditure of $5.5 billion with capital expenditure unchanged from the Approved Budget.

Of the $27.5 billion increase in recurrent non-debt expenditure, 56 per cent or $15.6 billion is being allocated to the health sector and toward support of the most vulnerable through the Social and Economic Recovery with Vaccines for Jamaica (SERVE).

In tabling the budget, Dr Clarke explained, “The full-year allocation to the SERVE Jamaica Programme, which is the GOJ’s (Government of Jamaica’s) social and economic recovery programme that is designed to respond to the challenges posed by COVID-19  and to facilitate a timely recovery from the pandemic and its effects will increase from $60 billion to $75.6 billion.”

Breakdown of $33 billion increased expenditure

Dr Clarke gave a overview of the increased allocations for the financial year:

• Approximately $10.3 billion of this increase will be directed towards the Health Sector and includes:

(i)              $1.0 billion to staff, administer and run seven field hospitals across Jamaica.

(ii)            $1.4 billion to provide COVID incentive payments for health workers in contact with COVID-19 risks.

(iii)           $731 million to increase manpower at regional health authorities and settle outstanding gratuity payments.

(iv)           $4.0 billion to address outstanding arrears to suppliers of goods and services to the health sector.

(v)            $906 million to provide additional subvention support to the University Hospital of the West Indies (UHWI), inclusive of the on-site field hospital.

(vi)           Other health-related expenditures.

• Approximately $5.3 billion will be directed toward increasing the allocation for targeted COVID-19 related social assistance to the most vulnerable and to those most affected by the pandemic.

Other recurrent expenditure increases include increases of:

• $2.7 billion to augment the provision in the Approved Budget for public sector wage settlements.

• $1.7 billion for the Police Department to address critical expenditure including arrears to suppliers of goods and services.

• $1.4 billion in the subvention to the University of Technology, whose reserves have been depleted by COVID-19.

• $1.5 billion to Ministry of Economic Growth and Job Creation of which $1.0 billion is for repairs/maintenance of secondary roads.

Capital Expenditure remains unchanged at $54.2 billion for the full fiscal year.

However, there have been reallocations within the capital budget due to implementation delays with some projects. The Southern Coastal Highway Improvement Project has been allocated a further $4.5 billion from this reallocation within the capital budget.

Donation of vaccines

Dr. Clarke told parliament that, “The Ministry of Health and Wellness has reported that as at September 1, 2021, approximately 900,000 doses of vaccines, valued at approximately J$2.0 billion, have been donated to Jamaica through bilateral arrangements with countries and through private initiatives. The value of the donated vaccines is accounted for in the First Supplementary Estimates through an increase in grant resources to account for the equivalent amount of recurrent programme expenditure allocated to vaccines.”

Accordingly, $2.0 billion of the GOJ’s resources originally intended for the procurement of COVID-19 Vaccines has therefore been redirected to fund other critical needs.

The Finance Minister underscored that the first supplementary estimates are being tabled in the context of GOJ revenues exceeding budgetary targets by $17.3 billion for the four months, April to July 2021.

This is reflective of the estimated robust economic growth of 12.9 per cent for the first quarter of this fiscal year, as the economy begins a strong recovery from COVID-19.