Williams declares Opposition’s implied Budget would trigger deficit
Published:Wednesday | March 26, 2025 | 12:10 AM
The parliamentary opposition has put forward an implied Budget that was not credible, according to Fayval Williams, the minister of finance and the public service.
In her closing the 2025-2026 Budget Debate in the House of Representatives yesterday, Williams said if the promises made by the Opposition were to be introduced in the next fiscal year, it would create another ‘FINSAC’.
The People’s National Party (PNP) administration of the 1990s established the Financial Sector Adjustment Company Limited (FINSAC) to address the crisis which developed in a number of banks, insurance companies and building societies.
Williams said the cost of the PNP’s promises is $48.8 billion, adding that she did not include all the promises they listed.
“They are in the red when you add the cost of their promises. They would have trampled on the fiscal rules, the same ones they told us they codified in law,” the finance minister said.
‘POINT OF ORDER’
However, Opposition Leader Mark Golding rose on a ‘point of order’ to argue that the finance minister was misleading the House. He said the Opposition did not present an implied Budget for the coming fiscal year but made proposals and policy commitments for the next PNP Government. He stressed that the Opposition did not signal that all its pledges would be implemented in the 2025-2026 financial year.
Continuing, Golding said: “After today (yesterday) the Budget would have been passed for the fiscal year. Our proposals represent what we will be doing for the duration of our first term in office and that is what we were saying and they will all operate within the fiscal rules.”
But Williams did not relent, saying the fiscal deficit that the Opposition would run, with all the give-ups and goodies, violated the fiscal rules.
The finance minister said it would also send a shock wave into the financial markets and those with money would run to convert their Jamaican dollars to United States dollars. “The dollar would fly, interest rates would go sky high, bond prices would tumble, the balance sheet of the financial sector would be severely weakened…,” she declared.
She said the market would react in that way because they have large holdings in Government of Jamaica bonds and much of the bonds would be marked-to-market, meaning the financial sector would have to write down the value of their bond holding.
“Within no time, the Bank of Jamaica would have hiked interest rates to try to slow down capital flight,” she added.
Williams indicated that the Government wanted to give more to the country, noting that it would feel good for a moment but the swift pain of a budget deficit would follow.