On February 14th, Minister of Finance and the Public Service, Dr Nigel Clarke tabled the 2019/20 Fiscal Year budget. He revealed that the Government of Jamaica (GOJ) budget was $803 billion, with just over $731 billion allocated for what Jamaica Information Service (JIS) has called Recurrent (housekeeping) expenses and $72 billion for capital (development) projects.
However, both the headline figure and the “recurrent” figure, as is always the case, have been reported in a misleading fashion by most of the major media houses, suggesting that we need to review the format of how the Government of Jamaica reports the budget to the country as it is genuinely confusing.
This year, despite the release of a simplified budget, errors in printing of the big yellow budget book have made it even more confusing for busy media practitioners.
The first step to a better understanding is the subtraction of principal debt repayment (to meet our debt refinancing needs) of roughly $138 billion, giving a total expenditure figure of roughly $665 billion.
However, the need for adjustment doesn’t stop there.
Total above-the-line expenditure is actually $629.4 billion (excluding repayment of debt or amortisation).
We break this down as follows. According to its fiscal policy paper (FPP), the government advises that this fiscal year (2019/2020) the GOJ plans to spend roughly $557.3 billion on recurrent expenditure, broken down as $210.7 billion on programmes, $210.4 billion on wages and salaries (which includes employers contributions of $16.5 billion and importantly represents it finally meeting the IMF target of 9 per cent (of GDP), or a combined $421.1 billion in what it calls the “above – the line Non-Debt Recurrent Expenditure”. Interest costs of $136.1 billion, now only 6.3 per cent of GDP, make up the difference (now roughly one third of where they were at the height of the global financial crisis in terms of per cent of GDP).
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