The Finance ministry, whose needs traditionally have been the greatest driver of central government budget increases, will operate this coming fiscal year with $80 billion less than it spent in the 2009-10 period.
From a budget of $370 billion, Finance Minister Audley Shaw will run the treasury with just under $290 billion, starting April 1, a 21.6 per cent cut in allocations made possible by the forced recall of domestic bonds that have spliced tens of billions off debt-financing charges.
Interest payments have long been the ministry's top expenditure item, and remain so in the 2010-11 Estimates of Expenditure. But at $140 billion for debt servicing, Shaw this year forecasts that he will pay out $46 billion, or 25 per cent less, to Jamaican and overseas creditors than the previous $186 billion, bucking the trend of annual increases amounting to tens of billions of dollars that characterised previous budgets.
Amortisations, or principal repayments on domestic government securities, have been cut by more than half, from $147 billion to $70 billion; but rise on the external debt from $24.6 billion to $27 billion.
In total, interest charges and principal repayments are down by $122 billion in this budget - the Jamaica Debt Exchange programme, replacing expensive domestic bonds with average 12 per cent issues, had forecast savings of $42 billion.
Some of the savings on the debt, however, have been netted off by other commitments of the finance ministry, including a $22.5-billion bill for redundancy and other closing-down costs for Air Jamaica, whose operations cease April 12.
The total budget covering all ministries and departments is $499 billion, down from $593 billion.
>>> For more on the budget, see the main news section of The Gleaner.