Finance Minister Fayval Williams has charged that the People’s National Party (PNP) would be running a budget deficit of $204 billion that would result in ‘Finsac 2.0’ and the collapse of the financial markets if the Opposition party is elected to office and implements the proposals its president and spokesman on finance presented during the 2025/26 Budget Debate.

Williams made the assertion as she closed the Budget Debate on Tuesday at Gordon House, where she used numerous charts and graphics to rip into what she called the Implied Budget of the PNP. She highlighted that the PNP has offered up nearly $49 billion in “goodies”, while the Jamaica Labour Party (JLP) Government offered up $9.2 billion, a demonstration of the Government’s commitment to fiscal discipline.

She took Opposition Leader Mark Golding and his spokesman on finance Julian Robinson to task, arguing that they lacked specifics in terms of how the proposals they offered would be financed.

“Promises, promises, promises,” said Williams.

“The spokesman on finance put forward promises, but no costing. The leader of the Opposition put forward more promises as well, but no costing. They also came with their recounting of history. Sadly, it did not include Finsac (Financial Sector Adjustment Company) and the long-lasting drag that the home-grown financial sector collapse has had on the Jamaican economy, even to this day. Not a word was said about Finsac in any of the two speeches, not an apology, not an acknowledgement. It was as if Finsac never happened. They will be judged by the Jamaican people and the Jamaican businesses,” Williams added.

“The leader of the Opposition spent a lot of time talking about NHT (National Housing Trust). The first proclamation he made is that he ‘…will stop the annual extraction of the $11.4 billion from the NHT to fund the budget.’ He said that he would set aside one per cent of food import tax which would be $2.5 billion per annum for the Agricultural Fund. He promised employers an increase in the Employer Tax Credit to 40 per cent from 30 per cent. He also promised a National Disability Fund, but no amounts were attached to that either,” Williams said.

She scolded Golding for “decrying securitisation” after he pointed out that future revenues from Norman Manley International Airport were being used to finance the current budget.

“All told, between the Opposition leader and spokesman, they made promises upon promises upon promises, but did they give the Jamaican people any idea of how much those promises would cost and whether or not they would have to cut back on something to do what they are promising?” the minister asked.

She then reeled off a series of charts to demonstrate how the budget presented by the Government would match up against what she termed the implied budget of the Opposition.

Arguing that the Opposition’s budget would create another financial sector meltdown similar to the mid-1990s which wiped out 40 per cent of the country’s gross domestic product (GDP) and led to the creation of Finsac, Williams said the PNP “put forward a lot of words with few figures but within all those pages and pages and pages of words is a budget, an implied budget”.

“It is that implied budget that I would like all Jamaicans to understand, because it has serious negative ramifications for our future,” she warned.

Pointing out that Jamaica has an obligation to make $177.5 billion in interest payments, the finance minister said: “This is immovable.”

She then pointed out that, on the Government side, “We can make the interest payment and have $780 million left as a fiscal balance surplus, a small surplus, but a surplus, and it sure beats the many years of deficit spending after deficit spending that the Opposition had when they were in Government.”

“With our budget we can go to the financial markets and borrow to refinance the $162.746 billion of debt that will come due during financial year 2025/26. We will borrow less than is coming due,” she stated.

“On the Opposition side, their implied budget cannot meet the interest payment. They would run a huge fiscal deficit of $204 billion. The Opposition went partying with the rent money,” she declared.

Williams warned that if a future PNP Government can’t make the interest payment, “they certainly can’t go to the financial markets to refinance the $162.746 billion of debt that is due”.

She warned further that “This fiscal deficit that the Opposition would run, with all the give-ups and goodies, violates the fiscal rule. It would send a shock wave into the financial markets: Those with money would run to convert their Jamaican dollars into US dollars, the dollar would fly, interest rates would go sky high, bond prices would tumble, the balance sheet of the financial sector would be severely weakened, instantaneously, because they have large holdings in Government of Jamaica bonds and much of the bonds would be marked-to-market, meaning the financial sector would have to write down the value of their bond holding. Within no time, the Bank of Jamaica would have hiked interest rates to try to slow down capital flight.”

“I am not exaggerating, it would be Finsac 2.0,” she remarked.

She boasted that under the budget that the Government put forward, “We can go to market and borrow $162.746 billion to pay off that same amount of debt. We can do that because investors trust our budget. The Independent Fiscal Commission said our budget is credible and our budget is sustainable. We have indicated strongly that we will not ‘run wid it’ in an election year, and we put forward a budget that, when subject to interrogation, is not a run-wid-it budget by any stretch of the imagination.”

Williams questioned whether the PNP would be able to give up revenue of $11.4 billion annually from the NHT or whether it would be able to forego $3.2 billion of corporate income tax from the micro, small and medium-sized enterprise sector for three years.

The finance minister also noted that the implied budget of the PNP would have to account for $31.5 billion to keep its promise of a scholarship for every household. She said the promise to provide a meal for every needy student at the primary and secondary school levels and to expand the rural transportation system from the current 7,500 students to 50,000 over three years would add billions to the budget.

Pointing to one of her many charts, Williams, in an almost mocking tone, said: “On our side, we expect to see revenues and grants of $1 trillion, $96 billion and $83 million. On the Opposition’s side of the ledger, they have an implied budget of $965.443 billion because they don’t want any securitisation or NHT contribution or other non-recurring revenues. They especially don’t like securitisation. And they figure, if they speak badly against securitisation over and over and over and over and over and over again, Jamaicans will begin to think it’s a bad thing because, after all, the leader of the Opposition was a partner in a very big financial sector company and so he must know a thing or two about securitisation, and if he says he does not like securitisation something must be wrong.”

“The bottom line is that the cost of the PNP’s promises is $48.8 billion, and I did not even put every single promise on this list. They are in the red when you add the cost of their promises. They would have trampled on the fiscal rules, the same ones they told us they codified in law,” said Williams.

“I believe we have given the implied budget a thorough interrogation and the two words I have for the implied budget of the Opposition are the following: Not credible.”

She said if the Oppositions want to refute this claim “then let them put forward a budget that can be interrogated”.

Finsac was established by the Government in January 1997 to restore stability after the collapse of several major financial institutions due largely to various factors, among them high bank interest rates promulgated by the then Government; excessive spending by large, small, and medium-sized businesses; and a meteoric rise in bad loans at financial institutions.

It is still unclear how much the economy lost during the period; however, experts have put it at approximately $120 billion and about 40 per cent of GDP.