Current fiscal measures, growth and plugging loopholes main funding strategy

Durrant Pate/Contributor

There is much anticipation that Finance Minister Dr Nigel Clarke will announce a no new-tax package for a third straight year, when he opens the 2023-2024 Budget Debate in Jamaican Parliament this afternoon (March 7).

Clarke will tell the nation how the government will finance its $1.02-trillion budget and the analysts have been weighing in on the options available. For the last two fiscal years, the government have not sought to impose a tax package, on each occasion introducing a no new tax budget.

Financial analyst Dennis Chung, speaking on radio this morning agreed with what appears to be the growing sentiments that it will be a no new tax package this year given the fact that revenue collections continuing to run above projections.

In addition, the additional expenditure for the upcoming 2023-2024 financial year is a mere 2.3 per cent more than the current 2022-2023 budget of $998 billion.

Plugging the budget gap

The additional $23 billion needed in the upcoming budget is expected to come from increased revenue collections based on certain targeted initiatives, modest growth in the economy, lower interest costs given the fact that Jamaica has been paying down its debt faster than planned and income from certain programme and projects being rolled out.

Based on Our Today research, the Government of Jamaica operations for April 2022 to January 2023 continues to over perform, as total revenues and grants closed the period at $635.33 billion, which is $3.57 billion more than projection. This represents an increase of approximately 15.6 per cent relative to the $549.70 billion recorded for the corresponding period in 2022.

However, capital revenue under-performed projection during the review period recording nil, relative to the budgeted amount of $95.9 million. Conversely, Bauxite Levy closed at $1.03 billion during the review period, relative to the budgeted amount of $1.03 billion.

Grants amounted to $5.10 billion, which is $797.4 million less than the budgeted amount. Tax revenue closed the period at $583.08 billion, $4.43 billion more than the budgeted amount.

Detailing expenditure programmes

Non-tax revenue amounted to $46.12 billion, which is 0.1 per cent higher than the budgeted amount. Dr. Clarke is expected to provide additional details on Jamaica’s expenditure programme, in particular debt repayment, providing the government’s debt management strategy for 2023-2024.

He will also respond to some of the suggestions coming from the Opposition bench during the Standing Finance Committee of Parliament, which met for two days last week combing through the national budget.

Clarke’s opposition counterpart, Julian Robinson, will continue the debate when he speaks on Thursday, giving the People’s National Party’s perspective on the national budget and putting forward an alternative budgetary programme.