Little in budget for spending on projects
Just seven per cent ($53 billion) of the $710 billion Budget proposed for the next fiscal year is going towards spending on capital or investment projects like roads as wages and salaries and debt servicing continue to take up the biggest chunk (70 per cent) of spending.
Of the $710 billion, the Andrew Holness Administration plans to spend in 2017-2018 some $310 billion is for debt servicing, or 44 per cent of the Budget, according to the Fiscal Policy Paper (FPP), which was tabled, along with the Budget, in the Parliament, yesterday.
The remaining $400 billion, which represents non-debt expenditure, will go to housekeeping ($347 billion) and capital spending ($53 billion).
The amount set aside for capital expenditure represents an increase of about $8 billion or 17 per cent more than the $45 billion in this year's budget.
"This level of spending represents 2.8 per cent of GDP, up from an estimated 2.5 per cent of GDP in 2016-2017. Approximately 43 per cent or $23 billion, representing the largest share of the capital budget, has been allocated to the Ministry of Economic Growth and Job Creation," the document revealed. About $19 billion will go to the Major Infrastructure Development Programme.
Meanwhile, the FPP said that revenue and grants are forecast to be 27.8 per cent of GDP, 0.4 per cent less than the figure for 2016-2017. "The passive forecasts for revenue and grants and the expenditure requirements for financial year 2017-2018 generate a primary surplus of $123 billion, which represents a shortfall of $9 billion."
The primary surplus is the amount of income left after the Government spends on its programmes.
Finance Minister Audley Shaw is to announce the tax measures to fill the gap when he opens the Budget Debate on March 9.
Targets for 2017-2018
- $132 billion or 7 per cent of GDP - primary surplus target
- $15 billion - budgeted fiscal deficit (0.8 per cent of GDP)
- 0.2 per cent - target under IMF programme for 2017/2018
- 2.2 per cent - expected real GDP growth for 2017-2018.