THE $358 BILLION Budget tabled in the House last Wednesday by Finance Minister Davies contained few surprises. The proposed Budget is $12-billion or 3.5 per cent more than the previous one. When the inflation rate for last year is taken into account (approximately 12 per cent ) this latest Budget represents a real decline over last year's budget.Against the background of the expiration of the public sector MOU and the expectation that the increase in the public sector wage fund would necessitate a larger expenditure budget in real terms, the Opposition Spokesman on Finance, Audley Shaw, has charged that the budget is unrealistic.
Actually, the budget has a provision under the Ministry of Finance of $8.88 billion of unallocated funds which it is felt is the adjustment made for the new wage bill. However, already the president of the Civil Service Association, Wayne Jones, is on record as saying the current amount being negotiated makes that figure appear untenable.
Nonetheless, the basic structure of the budget has remained intact reflecting the pattern of recent years. First, the estimates are highly skewed towards recurrent expenditure totalling $211 billion and capital expenditure totalling $146 billion.
Next, the top three priority areas of spending remain education, national security and health. Admittedly, education gets a substantial increase of $3.5 billion and health a $2.5 billion increase.
Of course, debt servicing retains its pride of place as the dominant sector with debt the related expenditure accounting for nearly 80 per cent of total expenditure. In this regard, the Finance Ministry gets $244 billion to manage the country's massive debt burden.
Despite this, however, there were a few surprises in the budget that were consistent with recent political changes in the administration, current economic realities, and attendant expectations. For one, the Ministry of Finance and the Ministry of Housing Transport and Works get $2.2 billion to cover infrastructural works in Kingston and St. Andrew in preparation for Cricket World Cup 2007.
Then, there is the increased spending for the Office of the Prime Minister that jumps from $642 million to $1.4 billion. This results from the absorption of the portfolios of community development and sport from the PM's former portfolio as well as the Bureau of Women's Affairs which was formerly with the Cabinet Office.
A point to note is that although the capital budget is down 6.8 per cent over the previous year, when provision for debt servicing is taken out of this year's figure, the capital budget actually totals approximately $20 billion when compared with the $10 billion figure of last year.
This has prompted analysts to argue that an increased capital budget as well as provision for expanded infrastructural work are sure signs that early elections are in the air.
What is clear, however ,is that when the revenue budget is presented in a matter of days, it will provide a clear indication of whether the latest estimates are sustainable or whether they represent a mere holding budget, with the real budget slated to come whenever the Supplementary Estimates are presented. This, after all, is a growing noticeable trend in recent years.
