SHAW

The Government plans to tap the Universal Access Fund for $2.8 billion to help offset more than $15 billion of unreported spending inherited from the previous administration.

Audley Shaw, Minister of Finance and the Public Service, made the disclosure yesterday in the House of Representatives after detailing the overexpenditure incurred under the People's National Party (PNP) administration.

Shaw also pointed to the impact of Hurricane Dean, interest and exchange-rate movements as factors likely to affect the deficit for the fiscal year.

"In addition, we have identified several items of non-discretionary expenditure that were clearly not budgeted for in this fiscal year, amounting to some $15. 4 billion," Shaw told the House.

"Among these items are hospital fee exemptions of $560 million, and that of course, was announced in the run-up to the last elections."

Unexpected overhang

Other expenditure, he said, included salary arrears, pensions backlog, a shortfall on teachers' salaries, increased allowances and wage settlements, higher-than-budgeted salaries, the construction of the Montego Bay Convention Centre, and monies for the Lift Up Jamaica Programme.

Turning to measures that the Government intended to implement to address the "unexpected overhang", Mr. Shaw said this would include the postponement of the Montego Bay Convention Centre until April 2008, which would reduce expen-diture by $700 million.

He, however, noted that the Government would still be signing the agreement with the Chinese government for the project.

Opposition Spokesman on Finance Dr. Omar Davies, responding to the disclosure, demanded that the Government divulge what it had done with bank balances of J$17 billion in cash in the Consolidated Fund, plus another US$15 million, at hand when he demitted office, causing an uproar from the government benches.

Said Davies: "While the Minister of Finance has maintained the proper approach to this issue, by innuendoes, by loose statements, there is the clear suggestion that the administration inherited what is called a 'bare cupboard' - concealed deficits, off-budget expenditures.

"The data tell us that the fiscal deficit as of August 31, was $22.7 billion versus a projected deficit of $25.5 billion," he added.

"In other words, we were $2.8 billion better than we projected.