Peter says ...

Major capital expenditures

Among the major capital expenditures to be undertaken during 2013-2014 are:

• $2.5 billion to commence implementation of the major infrastructure development programme to be financed by China EXIM Bank;
• $1.7 billion for the transportation infrastructure project to complete ongoing infrastructural works in Westmoreland and St Thomas;
• $1.4 billion to continue work on the upgrading of infrastructure and provide affordable housing solutions in Belle Aire, St Ann;
• $1.28 billion to complete the remaining 40 per cent of the programmed drainage-rehabilitation works in the Kingston Metropolitan Area (Sandy Gully);
• $1.3 billion for completion of mangrove and dunes restoration and installation of water pipelines under the Palisadoes Shoreline and Protection Project;
• Just under $700 million to commence implementation of projects for rural road rehabilitation in Manchester, Clarendon, St Catherine, St Mary, St Ann, and Westmoreland funded with support from the Kuwait Fund and OPEC;
• $740 million to finance projects under the Jamaica Emergency Employment Programme;
• More than $500 million on rural road infrastructure for patching and overlay of roads;
• $23 billion in housing expenditure by the National Housing Trust;
• Approximately $10 billion for the implementation of water and sewerage projects by the National Water Commission.
• $2 billion for the Sugar Transformation Programme to continue executing contracts for infrastructural works for seven housing sites across four parishes (Clarendon, St Thomas, Trelawny, and Westmoreland) related to the relocation of former sugar workers; the rehabilitation of cane roads; and the expansion of agro-parks.
  

Government spending

Overall, capital spending for the fiscal year 2013-14 is budgeted to be just under $50 billion.

In this sum, $44.7 billion will be funded through the Consolidated Fund and the rest through appropriations in aid (fees and earnings of the ministry's departments and agencies).

The allocation from the Consolidated Fund represents an increase of $6.3 billion over the $38.4 billion spent in the previous financial year ... .

I think it is important to note, Mr Speaker, that to get a more complete estimate of the extent of the capital investment, we have to take account of the investments being undertaken by public bodies like the Urban Development Corporation, the National Water Commission, the Housing Agency, National Housing Trust, and the Mortgage Bank. The total expenditure for infrastructure and investment being undertaken by public bodies for 2013-2014 is $62 billion. This compares with $52 billion for 2012-2013. The figures for 2012-2013 and 2013-2014 now include the work of the Road Maintenance Fund.

RECURRENT PROGRAMMES

Approximately $94 billion has been reserved for non-wage recurrent programmes. While this is a nominal increase compared to last year, it represents real reduction over 2012-2013.

Over $6 billion has been allocated to the Ministry of Labour and Social Security for social welfare programmes. This reflects an increase of approximately $562 million over the previous budget of $5.7 billion. PATH beneficiaries will receive a 15 per cent increase in payment, which will commence in August 2013. Another 15 per cent will be paid in August of 2014, thereby bringing the total increase to the beneficiaries to 30 per cent by the end of fiscal year 2014-2015.

Funds have been provided to support the introduction of a pilot programme to provide bus fares for PATH students; introduce bursaries to tertiary-level students, implement a social-housing project to deliver 120 housing solutions; provide skills training and remedial education to 525 farmers, 120 low- literacy clients and 500 youths; and provide 1,000 entrepreneurship grants under the welfare-to-work programme, among other initiatives.

Over $800 million has been allocated for poor-relief services, up from the $747 million provided in fiscal year 2012-2013, with approximately $780 million going to the parish councils to assist with the administration, operation, and maintenance of infirmaries as well as the provision of financial assistance to the registered poor.

The School Feeding Programme in the Ministry of Education has been allocated a total of $3.9 billion, an increase of $373 million, or 10 per cent, over the $3.6 billion provided in the previous year. The subsidy to basic school children has moved from $1.2 billion to $1.32 billion - the first increase in this grant since 2009-2010.

Youth and children-at-risk programmes have been allocated a total of $2.6 billion, up $251 million from the $2.4 billion provided in fiscal year 2012-2013. Grants totalling $1.24 billion, up from the $1.1 billion provided in 2012-2013, have been provided to the children's homes, places of safety, and foster care through the Child Development Agency.

Casinos

In October and November of the last calendar year, this honourable House and the Senate passed both the Casino Gaming (Application for Declaration of Approved Integrated Resort Development) Regulations 2012 and the Casino Gaming (Prescribed Games) Regulations 2012. Both regulations were gazetted (Wednesday).

It has been established that Integrated Resort Developments with Casino will create at least five jobs per room. Our law provides for a maximum of three such resorts with 2,000 new rooms each. This will, upon completion, translate into at least 30,000 new permanent jobs. The construction phase of these Approved Integrated Resorts will lead to thousands of jobs.

Against this background, Mr Speaker, I have much pleasure in advising this honourable House and the nation, that as of June 1, 2013, the Government of Jamaica will be receiving Requests for Proposals inclusive of Applications under the Casino Gaming (Application for Declaration of Approved Integrated Resort Development) Regulation 2012.

The period for the receipt of Requests for Proposals and Completed Applications will be 1st June 2013 to 30th September 2013. I expect to be able to make Orders declaring Approved Integrated Resort Developments by early in the New Year. I am advised by the Casino Gaming Commission that already there are at least six serious expressions of interest.

Enhancing business environment

Sustained growth will also require an environment which facilitates new entrants coming into the field of business investments and allows small to become medium, and medium to become large, not on the basis of political or social connections, but simply on the basis of their capacity and their entrepreneurial drive.

In order to achieve this, the Government will undertake a series of measures to enhance the business environment. Among these will be streamlining the business registration process simply by providing a single superform to facilitate a one-stop business-registration process.

Also, we will, in the course of this year, table a Secured Obligations Bill in the Parliament to facilitate access to credit by using movable property as collateral. I should remind the House also that the coming into operation of the Credit Bureau this year will, over time, facilitate a downward move in interest rates, and persons who have a good credit risk will have access to credit on better terms.

Clearing the books

Mr Speaker, I think it is worthwhile noting as well that there are provisions in this Budget relating to legacy payments, that is to say, obligations that have remained on the books but which need to be settled. These include payments of:

• $2.1b for buses ordered for the JUTC;
• $2.1b for settling the EPIHL and Sons Arbitration award; and there is some,
• $900m for payment to Carreras Ltd arising from the Privy Council decision.
  

Gov't pursuing privatisation programme

An important part of the growth agenda involves the swift and efficient privatisation of entities that are underperforming or otherwise do not form part of core activities of government.

Minister of Finance Dr Peter Phillips said yesterday that in this regard, the Government is actively pursuing a privatisation programme. Enterprise teams have been established and are working with regard to the privatisation of the Kingston Container Terminal, Norman Manley International Airport, Jamaica Railway Corporation and Caymanas Track Limited.

"I should also point out that Cabinet in March gave approval for the divestment of the Government of Jamaica shares in Wallenford Coffee Company. Final negotiations are now taking place with the preferred bidder. When completed the result will yield savings of over J$200 million per year for the Government of Jamaica which represents the annual loss for the company.

"The House should note also that the Government is pursuing plans for either a sale or lease agreement for its shares in Clarendon Alumina Partners Limited. Discussions are actively taking place as we speak, and I am cautiously optimistic as to the outcome."