Prime Minister Bruce Golding (centre) leads members of his governing Jamaica Labour Party (JLP) along Duke Street in Kingston into Gordon House ahead of yesterday's opening of Parliament for the 2008/2009 term. At left is National Security Minister Derrick Smith while Audley Shaw, the minister of finance and the public service, is to Golding's left. - Rudolph Brown/Chief Photographer

BUDGET OVERVIEW

Six months into office, the Golding administration yesterday tabled a $497-billion budget, which, on the face of it, is 23.4 per cent higher than the level to which the Government expects to hold spending for the fiscal year that ends on March 31.

But when inflation, now running at 18 per cent, is taken into account, the real increase is five per cent.

In other words, the money which the Govern-ment intends to spend during the coming fiscal year will purchase five per cent more in goods and services at last year's prices.

Recurrent spending, which covers salaries and other housekeeping expenditures, will take up $307.6 billion, or 62 per cent of total expenditure.

Routine projects

The capital budget is $189.6 billion, but when the cash set aside for capital repayment is taken into account, only $49.3 billion is left for routine projects like repairing roads and bridges and upkeep of other infrastructure.

Analysts last night declined to comment on the estimates, saying that they needed more time to digest the Jamaica Labour Party's (JLP) first budget in nearly two decades. The last time the JLP had to craft a budget from scratch was in 1988. It lost office early the following year.

As usual, debt servicing will take up the lion's share of the Budget, although the 55 per cent allocated to paying creditors is approximately 10 percentage points below the amount for 2007/2008.

Of the overall $274 billion that Finance Minister Audley Shaw has earmarked for debt payments, $123 billion will be for interests, representing a 23 per cent increase on last year's.

This in part reflects higher costs the Government will likely have to pay for sourcing cash on the international market. Shaw is expected to have to go to the market for around US$300 million to help meet recurrent expenses and to roll over a bond that falls due early next year.

But the subprime mortgage crisis and fears of a recession in the US economy have made global lenders wary of iffy emerging markets like Jamaica.

Apart from the Finance Ministry - which, because of debt servicing gobbles up near two-thirds of the expenditure - the biggest chunk of the budget goes to the Education Ministry. Its $58.3 billion is $5 billion, or just over eight per cent higher than the previous fiscal year.

Pre-election promise

Some of that additional cash will likely go towards meeting the Government's pre-election promise of free tuition in secondary schools.

With the abolition of user fees in public hospitals as of April 1, a general election promise, the Government has increased the allocation to the health ministry by more than $6 billion to $27.45 billion. This will help to offset off the expected $3.5 billion shortfall that will result in the provision of free health care.

With Jamaica's high crime rate, Security Minister Derrick Smith had soon after his party's election last September primed people to expect a significant hike in the allocation to his portfolio.

Based on the figures released yesterday, the Security Ministry's allocation of $37 billion, is $6.1 billion or 20 per cent higher. A significant portion of that increase is on the capital side, which jumped fourfold to $2.1 billion - most of which is for repairing police stations and the upkeep of buildings.

A pet project of Prime Minister Bruce Golding, a special constituency fund over which MPs will have substantial influence, finds expression in the budget, although not at the level Golding had initially hoped and not specifically declared.

When he first announced the idea, Golding had hoped to put aside five per cent of the budget annually, which parliamentarians, supported by civil society advisers, could tap for projects. In the JLP's election manifesto, the party promised a fund of 2.5 per cent of the budget.

However, Golding recently said that the current economic environment precluded a fund of that size, although he did not give a specific figure.

In yesterday's budget, the long-standing Social and Economic Support Programme (SESP), long derided as a pork-barrel fund, was allocated $2.46 billion, almost 10 times more than the $279 million of the previous year.

$37.6B NAT'L SECURITY

ELLIS

Crime-fighting efforts to be intensified and the mobility and investigative capabilities to be strengthened. A strategic review of the Jamaica Constabulary is due to be completed shortly.

Diane Ellis - member of the Violence Prevention Alliance: The only thing which will solve crime is for each and every individual to embrace a non-violent approach and that will bring us a more peaceful society. When everyone adopts a non-violent mindset, things will be better because many of the things we are seeing now is retaliation and revenge.