FINANCE Minister Nigel Clarke on Thursday tabled a $912 billion spending plan for the 2022/23 fiscal year, and outlined in a short speech that it will “facilitate moving the country beyond the novel coronavirus pandemic towards sustainable growth and development”.

Clarke is to tell the nation on March 8 how he intends to finance it.

At $912 billion, the new budget is 2.1 per cent higher than the $893 billion the Government estimates it will spend throughout this fiscal year which ends on March 31.

The proposed expenditure covers $539.5 billion in non-debt recurrent spending, boosted by provisions to commence implementation of the compensation restructure for public sector workers.

Of that total, $290 billion will go to paying public sector wages and salaries.

The rest, $249 billion, is allocated to recurrent programmes including $11.8 billion in support for universities, $6.3 billion for student nutrition support, $1 billion to purchase textbooks, $800 million for farm roads, $4 billion for road maintenance, $500 million for social housing, and $275 million for zinc fence removal. The police are also set to get $2 billion to address critical operational areas.

Clarke also noted that debt servicing would cost $307.5 billion in the next fiscal year. The expectation is that at the end of the 2022/23 fiscal year, the debt-to-GDP ratio — a measure comparing the country’s total debt to the value of total output each year — will fall to 87.3 per cent. If achieved, that would be the lowest debt-to-GDP ratio Jamaica has achieved since 1999 when the ratio was an identical 87.3 per cent. The projections are that by March 2026 the ratio would decline to 68.9 per cent — a level not seen since 1978. With lower debt-to-GDP ratios, over the medium term debt servicing costs are expected to decline, falling to $250 billion by 2025.

Clarke also told the House on Thursday that $65 billion, or about 2.6 per cent of the total spending, will go to capital programmes. The bulk of that spending, $21 billion, has been allocated for the South Coast Highway Improvement Project and $4.9 billion to the Montego Bay Perimeter Road.

Clarke recalled that the first confirmed case of the novel coronavirus was in the last month of the 2019/20 fiscal year, which ultimately led to a closure of airports and lockdown of the economy in March 2020, significantly impacting the fourth quarter of 2020/21.

“This upcoming fiscal year, 2022/23, will therefore be the third fiscal year of COVID-19’s presence in Jamaica. Fortunately, Jamaica has begun the process of recovery from the impact of the pandemic within the reality of the continuing transmission of the virus,” he noted.

“It is within this context that I table today the 2022/2023 budget documents, which outline the Government’s plans across the medium term to facilitate moving the country beyond the COVID-19 pandemic towards sustainable growth and development,” he stated.

He also recalled that in 2021/22, the Government assisted the country’s recovery through the SERVE Jamaica programme, which was partially financed by $32.6 billion in dividend flows from the central bank, in accordance with the Bank of Jamaica (BOJ) Act, and attributable to consolidated BOJ profits over a number of years.

However, he noted that the occurrence represented only a one-time inflow to the central Government that was directed at recovery activities in 2021-2022. He said that with the absence of this inflow, which represented 1.5 per cent of GDP, anticipated revenue flows for 2022/23, as a percentage of GDP, have declined.

“The Government’s efforts to enhance the pace of recovery in 2022/23 will be effected through utilisation of its normal revenue flows to target growth-enhancing activities,” the minister advised the House.

GRAPHIC INFO

Proposed expenditure

Debt — $307 billion

Public sector wages and salaries — $290 billion

Recurrent programmes — $249 billion

Capital expenditre — $65 billion