Left: Audley Shaw, the Minister of Finance and the Public Service, Right: Omar Davies, Opposition Spokesman on Finance. - - Rudolph Brown/Chief Photographer
Finance Minister Audley Shaw yesterday confirmed unreported government spen-ding of $15.4 billion, which, by Wednesday Business estimates, effectively pushes the true budget deficit to $38 billion as at August.
The official figures show a deficit of $22.7 billion.
The man who Shaw replaces, Dr Omar Davies, now Opposition spokesman on finance, was quick to react in his own defence, saying he had left sufficient funds in the kitty to cover the country's off-book spending.
Shaw in a run down of the unreported 'non-discretionary' spending, pointed to salary expenses of $2.9 billion for teachers and $1.5 billion for the University of the West Indies, and pensions backlog of $1.12 billion, likely linked to withholding taxes owed to pension funds, and $1 billion on the Montego Bay convention centre project, plus others (See insert).
Measures
He, however, announced a number of measures to cut the deficit, saying they, alongside rigorous tax collections, should yield $8.3 billion, while planned cuts should save another $1.5 billion.
The aim is to bring the deficit to just above 5.0 per cent of GDP, he said.
The initial target was 4.5 per cent.
Davies did not respond directly to the claims of unauthorised spending. Instead he pointed to the official figures, published for August, showing that the approved deficit target was $2.8 billion better than programmed for the first five months of the fiscal year. .
He said too that he had left $17 billion in the bank, with an additional US$15 million ($1.05 billion) expected from the proceeds of the last bond issue - for a total of $18 billion.
"Therefore, I not only refute the charges but ask the Government to prove that this is not the reality", said Davies.
He charged that the Government was using the issue of non-budgeted items to side-step the real problems faced by the economy such as the depreciation of the currency, and interest and exchange rate movements.
Shaw in an early indication of some of the measures to rein in the deficit, said government would postpone construction of the Montego Bay conference centre until April 2008, cutting $700 million off the deficit.
Another $800 million is to be saved by delaying other capital projects financed from the Government purse.
The minster also proposed freezing all tax waivers for non-charities for the rest of the fiscal year to save $600 million, while $2.8 billion from the Universal Access Fund and $400 million of accrued interest on government deposits will be transferred to the Consolidated Fund.
sabrina.gordon@gleanerjm.com
| Non-Budgeted Spending | |
| Hospital fees | $560 million |
| UWI salaries arrears | $1.5 billion |
| Pensions backlog | $1.1 billion |
Pension approved increase | $300 million |
Local Government expenditure | $800 billion |
Shortfall on teachers' salaries | $2.9 billion |
| Wage settlement | $700 million |
Higher than budgeted salaries | $800 million |
Montego Bay Convention Centre | $700 million |
Lift up Jamaica Programme | $1.0 billion |
