Although he will table the estimates of expenditure in less than a week's time, Audley Shaw, the finance minister, and his boss, Prime Minister Bruce Golding, still have time to refine, or even rewrite, the budget they intend to present to the Jamaican people.

We speak of the budget not only in terms of the numbers on what the Government plans to spend that will be contained in the document that Mr Shaw will lay in Parliament, or the projected revenue - and its source - that the minister will outline when he opens the debate later in the month. Rather, our reference includes that broad economic philosophy in which those numbers will be encased and the political process by which Mr Shaw, but more so Mr Golding, intends to give them life and reality - especially in this time of global economic crisis.

Times like these demand strong leadership, clear thinking and the willingness to take tough decisions. Which is what we expect from the Government, given the limited room in which it has to manoeuvre.

Below projections

The figures from the fiscal year just ended underline the demand for a new and bold approach from the administration. Its revenues and grants for the first 11 months up to February was approximately $21.2 billion, or more than eight per cent below projections.

And while the Government was able to hold expenditure over $12 billion, or four per cent below budget, its deficit for the first 11 months of the fiscal year was just under $9 billion worse than the $60.1 billion originally projected. The Government would have ended the fiscal year with a deficit of around seven per cent of gross domestic product.

There are two real big ticket items contributing to this state of affairs - the cost of debt and the public sector wage bill. Up to February, the Government had paid out more than $116 billion in interest costs. Its wage bill of $101.6 billion was $4.33 billion, or five per cent higher than initially projected. That wage bill would have ended the year closer to $111 billion.

Shortfall in revenue

All this happened at a time when the inflow from corporate and personal income tax, the bauxite production levy and import tariffs are substantially below projections, and are likely to perform poorly well into the new fiscal year, and even beyond. Capital expenditure felt the brunt of this shortfall in revenue, at $17.5 billion or 43 per cent lower than projected at the end of February.

All this has happened at a time when private capital markets are tight and Jamaica has been downgraded by international rating agencies. Our borrowing options are narrowed.

Mr Shaw will be sorely tempted to bring new tax measures, some of which may well be inevitable. However, the Government must contemplate no new taxes unless it first begins to pump the steroids out of the government by cutting its size. There are 40,000 posts on the establishment, but more than 100,000 people are employed. Perhaps 20,000 of those can go, without any negative impact on the public sector's ability to function effectively.

Critically, too, Mr Golding has to give Jamaicans a vision in which to believe and to want to invest. He has to build hope, otherwise his only tool against capital flight is the central bank's high interest rate regime.

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