Date: March 05, 2019

For the period of April 2018 to January 2019, the GOJ reported Total Revenues & Grants of $496.55 billion, $3.79 billion more than the Government’s projection. Year over year, this represents an increase of approximately 14.2% relative to the $434.88 billion recorded for the corresponding period in 2017. ‘Tax Revenue’ outperformed projections during the review period, while ‘Non-Tax Revenue’, ‘Capital Revenue and ‘Grants’ underperformed projections. ‘Tax Revenue’ amounted to $433.45 billion, $5.31 billion more than budgeted. Whereas, ‘Non-Tax Revenue’ was recorded at $53.36 billion which was $366.3 million or 0.7% less than budgeted. In addition, ‘Capital Revenue’ totalled $2.51 billion, $274.3 million or 9.8% less than budgeted. ‘Grants’ of $7.23 billion was reported; $884.4 million less than budgeted. Notably, no provisional amounted was booked for ‘Bauxite Levy’ for the review period.

Expenditures

Total Expenditure for the period April 2018 to January 2019 amounted to $482.25 billion, $6.50 billion or 1.3% less than the budgeted $488.74 billion. Recurrent expenditure which totalled $431.64 billion, accounted for 89.51% of overall expenditures. Relative to projections, recurrent expenditure was $6.15 billion (1.4%) less than budgeted. ‘Programmes’ which amounted to $162.72 billion was $3.14 billion or 1.9% less than projected, while ‘Employee Contribution’ which amounted to $12.19 billion for the period was under budget by 4.9% relative to the budgeted $12.81 billion. ‘Compensation of Employees’ amounted to $164.28 billion, $85.2 million or 0.1% less than projected. While, ‘Wages & Salaries’ amounted to $152.10 billion and was $536.2 million or 0.4% more than projected.

As a result of the decrease in Expenditures for the period April 2018-January 2019, the ‘Fiscal Surplus’ was $14.30 billion, relative to a projected surplus of $4.02 billion. Additionally, the primary balance for the period amounted to $118.94 billion, 6.6% more than budgeted.

As part of the Memorandum of Economic and Financial Policies (MEFP), the GOJ estimates that the primary balance, as a performance criterion, should amount to $142.14 billion by the end of the 2018/2019 fiscal year. As at the end of January 2019, this amounted to $118.94 billion. Tax Revenue is expected to total an estimated $537.47 billion by the end of the March quarter. The reported tax revenue for the end of January 2019 was $433.45 billion.

Revised Budget

Second Supplementary Estimates

The House of Representatives approved the Second Supplementary Estimates on January 15^th, subsequent to the First Supplementary Estimates released on October 4^th, 2018.

“The Second Supplementary Estimates FY 2018/2019 was tabled in Parliament on January 8, 2019 and indicated total Central Government expenditure of $802,563.1mn, thus resulting in an overall net increase of $11,451.0mn above the First Supplementary Estimates of $791,112.1mn. It should be noted that the First Supplementary Estimates 2018/2019, had reflected a total Central Government expenditure for the fiscal year of $791,112.0mn comprising: Non-Debt Expenditure of $501,249.2mn; and Public Debt Service of $289,862.9 billion,” according to the Government.

Revised Expenditures Estimates

With the further adjustments made in the Second Supplementary Estimates, the projected outturn for the expenditure budget in FY 2018/19 is now comprised of

1. Non-Debt Expenditure of $516,891.9mn
   Non-Debt Expenditure has increased by $15,641.7mn (3.1%) over the $501, 2492 mn in the First Supplementary Estimates. The increase in Non-Debt Expenditure is offset by a reduction of $4,190.6mn in public debt spending.”
2. Public Debt Service of $285,672.3mn

Notably, The Recurrent Programmes budget for FY 2018/19 of $212,442.7mn is 20.2% higher than the end-FY 2017/18 outlay of $176,779.5mn. This translates to a positive 1.3 percentage point of GDP change between the 2018/19 budget and the 2017/18 outturn. The higher budgeted payments under recurrent programmes include:

• Provisions in excess of $2,000.0mn to the Ministry of National Security to address, among other things, an increased allocation to the Jamaica Defence Force (JDF);
• $2,479.0mn for the Special Early Retirement Programme (SERP);
• Approximately $3,000.0mn allocated to meet pension payments.
• Street lighting arrears of $7,140.0mn;
• Domestic arrears settlement of $2,614.0mn;
• Additional support to the Jamaica Urban Transit Company (JUTC) of $2,505.0mn;
• Funding to Mitigation and Road Maintenance under the Ministry of Economic Growth and Job
• Creation (MEGJC) of $2,600.0mn;
• $2,423.0mn for increases in Travel Allowances/Mileage to Travelling Officers;
• Allocations to National Solid Waste Management Authority (NSWMA) of $1,045.0mn;
• Support to the National Health Fund (NHF) of $1,000.0mn;
• Allocations to meet some of the demands presented by MDAs totalling $4,281.8mn;
• A further sum of approximately $1,500.0mn which includes, inter alia:
• $300.0mn to support Ministry of Health’s (MOH’s) expanded response to the current dengue outbreak;
• $425.0mn to clear outstanding Vacation Leave payments to employees of the former Jamaica Customs Department and Tax Administration Department; and
• $325.0mn outstanding refund to the Spectrum Management Authority.

Revised Revenues Estimates

• Revenue and Grants for FY 2018/19 is projected at $623,864.2mn and represents an increase of 11.3% over the FY 2017/18 outturn of $560,773.6mn. As a percentage of GDP, Revenue and Grants for FY 2018/19 are estimated to be 1.6 percentage points higher than the FY 2017/18 outturn. This growth is driven by Recurrent Revenue which accounts for 98.0% of total Revenue and Grants. Grants are also projected to increase over last fiscal year’s outturn, while Bauxite Levy and Capital Revenue have lower projected collections in comparison to the last fiscal year’s outturn.
• Tax Revenue collections are projected at $537,465.5mn, representing a growth of 8.2% over the FY 2017/18 outturn of $496,894.6mn. The Government noted, “The uptick in employment, increased economic growth and single digit inflation has contributed to improved revenue flows that align to the GOJ’s strategy to reduce the level of public debt-to-GDP.”

The FY 2018/19 budget also includes Other Outflows towards:

1. The repurchase of Petrojam Shares
2. Central Government’s obligations to the BOJ, and

• The Port Authority of Jamaica’s Business Process Outsourcing (BPO) Expansion Project.

The Government highlighted that “these outflows have more than doubled over the last fiscal year. Similarly, Other Inflows, which include inflows from the PCDF, have increased year over year. Budgeted Loan Receipts have also been reduced when compared to last fiscal year’s outturn due to a decline in the need for net new financing. Amortization payments decreased over last fiscal year primarily due to the lower maturities for the year, with some contribution from appreciation of the JMD vis-à-vis the USD.”

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