Gov’t unveils $1.26 trillion budget, allocates $1.95b for elections

The Government has presented a $1.26 trillion Budget for fiscal year 2025-2026 which starts April 1.

It is roughly nine per cent less than the revised estimates for 2024/25, reflecting spending cuts of $126 billion. 

What's more, $1.95 billion has been set aside for the general election that is constitutionally due this year.

These figures are contained in the Estimates of Expenditure that were presented by Finance and Public Service Minister Fayval Williams in the House of Representatives on Thursday. 

Revenues and grants are expected to reach $1.096 trillion this year, though tax revenues are falling short of earlier estimates.

Williams will explain how the $158 billion shortfall in estimates will be addressed when she opens the Budget debate on March 11 for her maiden presentation.

As is customary, recurrent expenditure will eat up the lion’s share of the estimates,  budgeted at $1.20 trillion, and dwarfing capital expenditure which is penciled in at $62.59 billion.

The fiscal policy paper document that was tabled alongside the estimates confirms that the economy has entered a recession having contracted 3.5 per cent in the July-September quarter and an estimated 0.5 per cent in the October to December quarter.

Despite the setbacks, Williams, who will deliver the budget in under four weeks, insisted that the economy continues to be resilient due to the policies of the Government. 

She blamed weather events, including Hurricane Beryl that impacted the island on July 3, causing billions in damage and Tropical Storm Rafael, for the contraction in the economy. 

“This continued strength of our Budget has been so despite a backdrop in fiscal year 2024-2025 of dry weather or drought, severe impact of Category 5 Hurricane Beryl, Tropical Storm Rafael, and rainfall in all 14 parishes during the month of November that ranged between a minimum of 125 per cent all the way to 300 per cent of the 30-year mean rainfall for the month of November,” Williams said. 

About 28.94 per cent of the budget will go towards debt servicing but the biggest spend for the government this fiscal year will be the $496 billion set aside for public sector compensation. 

Some $4.6 billion is allocated for the restoration and maintenance of major roads and gullies while the Development Bank of Jamaica has been allocated $2 billion for onlending to businesses.

Of the $62.59 billion budgeted for capital projects, the Ministry of Economic Growth and Job Creation has been allocated nearly half the amount - $30.55 billion - as it continues to be the lead ministry on major infrastructure projects which are in varying stages of implementation.

The projects include the Montego Bay Perimeter Road for which $14 billion is allocated; the Shared Prosperity through Accelerated Improvement to our Road Network (SPARK) programme, which is set to receive $8 billion; the Southern Coastal Highway Improvement Project, which gets an additional $2.5 billion and the Portmore Resilience Park which gets another 2.5 billion. That project is slated for completion during the upcoming fiscal year.

Meanwhile, the Ministry of Health and Wellness has been allocated $10.2 billion with nearly half the amount or $5 billion set aside for ongoing works at the Cornwall Regional Hospital. The Inter-American Development Bank-supported programme for the prevention and care management of non-communicable diseases will get $4.1 billion while the Office of the Prime Minister will receive $4.6 billion of which $3 billion will go towards the continued rollout of the national identification programme.

The Ministry of Science, Energy, Telecommunications, and Transportation is set to receive an additional $4 billion. Most of that allocation, $3.2 billion, will go towards the purchasing of new buses for the Jamaica Urban Transit Company. 

The Ministry of Education, Skills, Youth and Information gets an additional $4.2 billion; $1.7 billion of the amount will go towards improvement works at primary and secondary schools.