The recurrent expenditure for this fiscal year is set to increase by US$218 million over the $2,458 million for 2016/2017.
This was announced by Deputy Prime Minister and Minister of Finance the Peter Turnquest as he presented the Budget Communication 2017/2018 in the lower house on Wednesday.
“A significantly higher level of Debt Redemption of $125 million, from $308 million to $433 million, accounts for the lion’s share of the spending increase and is primarily explained by refinancing activities.” The newly appointed Finance Minister said other increases are noteworthy, including $40 million to the Ministry of Health ,$35 million for medical insurance premiums, $16 million for pensions and $6 million for gratuities.
He said that overall the budget includes a $27 million increase for persons engaged during the 2016/2017 fiscal year, $8 million for increments and $7.5 million to accommodate payments as per industrial agreements with various public sector unions.
He explained that for its part, Recurrent Revenue for 2017/18 is projected to return, post-hurricane, to the trend ratio to Gross Domestic Product (GDP) that had been targeted through the previous Administration’s programme of revenue reform, including Value Added Tax implementation.
Turnquest said that with the somewhat more buoyant growth in the economy that is projected for both 2017 and 2018, and including the fiscal impact of the revenue measures in this Budget, Recurrent Revenue is forecast at $2,150 million in the coming fiscal year, up $190 million from the previous, depressed year.
He also explained that in the multi-year scenario, Recurrent Expenditure is projected lower by $200 million, in each of 2018/19 and 2019/20, to levels in the area of $2,450 million.
He said this is largely due to significantly lower Debt Redemption payments each year. Capital Expenditure is projected to remain around 2.3 per cent to 2.4 per cent of GDP in the outer years, with annual levels on the order of $230 million, essentially unchanged from 2017/18.
Meanwhile the opposition Progressive Liberal Party (PLP) says the budget statement was one of “political bashing and biased posturing”.
According to opposition leader Philip Brave Davis, the statement should be an outline of the legislative measures which the Government plans to take to improve the revenue and expand the economy .
“It is also shocking that the FNM (Free National Movement) government is within its first weeks in office borrowing an unprecedented $722 million to run the business of the Government,” he said.
Davis said the budget statement reveals and is an admission “that the fundamentals of our economy were prudently managed and a solid foundation laid for growth. This is evidenced amongst other things by the International Monetary Fund (IMF) that predicts that this year the economy will grow by 1.4 per cent and will be followed by a 2.2 per cent growth in 2018. Indeed the Government itself is predicting 3.3 per cent growth for next year, which must be a testament to the prudent management of the PLP Government.”
He added that in the government’s efforts to make political points, “the ruling FNM has to be very careful not to talk down this economy to the harm of the national interest.”
“We again urge them to be extremely careful how they talk down this economy so that they do not make the last state worse than the first. The fact is the Government is the largest spender in this economy. If the government contracts its spending, then the economy of this country gets into deep trouble. We again say to the government be very careful,” he said.
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