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Financial News

Sep 2009 Financial News

Budget cuts push Standing Finance Committee into overtime

Sep 30, 2009

THE Standing Finance Committee went into overtime last night as the parliamentary Opposition, led by its finance spokesman Dr Omar Davies, pressed the Government to explain cuts as well as increases outlined in the supplementary estimates.

Davies said that the finance minister had also not explained how the budget would be financed, given the $6 billion increase outlined in the supplementary estimates.

Finance Minister Audley Shaw, who did not say exactly how the additional $6 billion would be raised, said Jamaicans needed to accept the fact that serious belt-tightening was necessary if the country was to fulfil its budgetary obligations. He said the Government had overestimated the revenue it anticipated it would have received from the divestment of certain entities, in addition to its expectations of declining interest rates.

Shaw said too, that at least $6 billion in property tax revenues remained outstanding, noting also that the level of GCT compliance had fallen as many business operators were using the tax for operating expenses, which was illegal.

Among the many contentious issues raised by the Opposition during yesterday's sitting of the Standing Finance Committee was the $1.2-billion slash in the Constituency Development Fund (CDF), which parliamentarians use to undertake social programmes within their respective constituencies.

Davies, the member of parliament for South St Andrew, said this was unfortunate that the Government had to cut the CDF, considering that many parliamentarians had already made commitments in anticipation of the funds.

"I have gone out and made commitments to schools and bookstores, based on what I expected," said Davies. "I have written to schools and said I stand by my commitment to pay these funds for students."

Shaw, who said the decision to cut the CDF was a difficult one, told MPs that to date the fund has disbursed $444 million from its budget. He said improvements had been undertaken to other social programmes, including the provision of an additional $1 billion as well as a further $600 million which had been set aside for the school feeding programme.

The CDF was established to provide MPs with financial resources to execute approved sustainable social and economic programmes within their constituencies.

Yesterday, Opposition MP Ronnie Thwaites questioned the administration's long-term plans for the postal service, which has seen its budget increased by $27 million.

Shaw, in response, said plans were in place for the transformation of several post offices which would see them relying less on the budget.

But he said several post offices and postal agencies across the island would have been closed in the face of declining revenues and the transformation of existing facilities to include courier and Internet services.

"They are in transition and well underway with plans to introduce technology such as Internet cafes and so able to provide more services," said Shaw. "To remain where they are now will place an additional burden on the national budget. They have the highest number of outlets across the island. that can enhance communication."

Cuts have also been made to the budgets of the National Environment and Planning Agency, the National Youth Service by $155 milllion, as well as the Ministry of Tourism's overseas marketing funds by $100 million.

Tourism Minister Ed Bartlett, in responding to concerns from Opposition spokesman on tourism Dr Wykeham McNeill, said he was not perturbed as his ministry had identified funds for tourism marketing from several sources to supplement its budget, including the Tourism Enhancement Fund.

In addition, the Government also indicated that this is the last year that it will be paying fees for the CSEC, CAPE and GCE exams.


Source:
Jamaica Observer
Wednesday, September 30, 2009

http://www.jamaicaobserver.com/news/html/20090929T230000-0500_160793_OBS_BUDGET_CUTS_PUSH_STANDING_FINANCE_COMMITTEE_INTO_OVERTIME.asp