Jamaica's primary surplus reached $30.7 billion over the fiscal year to date to October, a performance that was 33 per cent better than projected when the budget was cast in April, the Finance Ministry has reported.

The Government has also bested other fiscal targets for revenue inflows and the deficit, but was also more active in the markets as a borrower.

Finance had projected that the primary balance, whose numbers are reflective of Government's operational performance when debt financing is stripped away, would have reached $23 billion.

The fiscal numbers were also much better than projected, as while spending ran $28.2 billion ahead of revenues and grants, the Audley Shaw/Don Wehby team reported more than $8 billion or 23 per cent of savings.

The fiscal deficit had been expected to reach $36.5 billion by October.

Part of those savings resulted from heavier 'capital revenue' intake which inflated income flows from revenue and grants by $3.2 billion. Robert Williams, senior director of the Ministry's Fiscal Policy Unit said the bigger capital revenues were from Financial Institution Services, formerly Finsac.

Williams also told Wednesday Business that of the $15 billion in off-budget spending that was inherited by the new administration, a portion relating to free health care for children, some outstanding wages, and the cost of the general election were included in the April to October numbers.

While he did not specify the amount, the fiscal policy director did say that the majority of the $15 billion would be booked in the periods ahead.

Taxes basically performed to expectations, improving by only $781 million to record collections of $117.4 billion in the fiscal year to date.

But Special Consumption Taxes were about 21 per cent off base, which Williams said would have been reflective of the early deposits made by Petrojam on its SCT obligations and booked in past periods.

An 8 per cent improvement in corporate and personal income tax collections were offset by reduced interest on taxes and bauxite.

Additional savings flowed from big spending cuts of $5 billion on recurrent or day-to-day expenses, with heaviest sacrifices made in capital programmes - a strategy inherited from past Finance Minister Dr. Omar Davies, but which has been criticised as anti-growth - where the cuts rose to $7.6 billion.

Some of those savings were taken back in higher spend on recurrent programmes which rose by $4 billion.

Heaviest on budget

Debt servicing charges of $58.9 billion remained the heaviest call on the budget, but were $725 million or 1.2 per cent lower than projected, while wages and salaries topped $49.4 billion to clip $625 million or 1.4 per cent off the budgeted spend.

On the capital side of the budget, borrowing habits have also flowed across to the new administration, with the Finance Ministry reporting loan receipts topping $99 billion, or 15 per cent more than budgeted - sufficient to finance the deficit as well as amortisations or principal debt repayments for which Finance issued cheques of $67.5 billion, with a $3.8 billion leeway.

lavern.clarke@gleanerjm.com

Government Operations

April - October 2007

Taxes $11.4 billion

Total revenues $133.4 billion

Expenditure $161.5 billion

Fiscal deficit $28.2 billion

Primary surplus $30.7 billion