Assuming a deficit of 6.0 per cent of GDP last fiscal year, which should be in the region of about $55 billion, achieving the programmed expenditures in the upcoming budget will require tax and non-tax revenues and grants of around $340 billion to $350 billion.

In the last fiscal year, tax collections were targeted at $265 billion. Up to February only $216 billion had flowed to the treasury, well below the 11-month target by $16 billion.

Overall revenues and grants were budgeted at $306 billion last year, of which inflows reached $240 billion in February - $21 below target.

The Ministry of Finance tabled an expenditure budget of $547.75 billion in the House of Representatives on Tuesday, reflecting above-the-line expenditure of $397.35 billion and amortisation payments of $150.4 billion.

As in previous years debt servicing accounts for the largest portion of the budget, 56 per cent, followed by education services 13 per cent, national security services 8.0 per cent and health services 6.0 per cent.

The salient features of the budget are as follows:

Debt Servicing

This will take up $309.4 billion of the budget, three per cent or $41 billion more than the 2008/09 payments (see debt payment insert).

Salaries indicate wage freeze

A glance at 'Compensation for Employees' throughout all ministries and agencies suggest that a wage freeze is in effect, although there are some provisions for increases in a few areas.

The budget has programmed approximately $115 billion for wages and salaries, as opposed to $111 billion in FY2008/09.

There is a provision in the Ministry of Finance of $1.2 billion for contingencies, and it is expected that this will be utilised for settlement of wage negotiations with the nurses and other bargaining units with outstanding claims.

There are some increases in the Ministry of Education budget - $4.5 billion - for some of the retroactive payments to be made to teachers.

Otherwise, there are increases in the salaries of the uniformed staff of the Jamaica Defence Force and Jamaica Constabulary Force.

Recurrent expenditure

Overall recurrent estimates of expenditure moved from$309.46 billion in FY2008/09 to $356.34 billion in FY 2009/10, representing an increase of $46.88 billion or 15.1 per cent.

Interest payments are expected to move from $124.1 billion in FY2008/09 to $159 billion in FY 2009/10, an increase of $34.9 billion or 28.12 per cent.increase of $12 billion or 6.45 per cent.

The main projected contributors to the increase in the non-debt recurrent expenditure include:

Provision of $1.2 billion for outstanding salary settlements.

Increased provision for teachers salaries - $2 billion for primary school teachers and an additional $2.5 billion for teachers in secondary schools.

A $3.2 billion increase in the budget for the Jamaica Defence Force, including a $1.6 billion increase in the compensation of soldiers in the first and second Battalions of the Jamaica Regiment, as well as the Support and Service Battalions. The rest also reflects increases in salaries for soldiers in other sections of the JDF.

Capital expenditure

The projected capital expenditure budget for FY2009/10 is $191.4 billion, of which amortisation or repayment of loans is $150.4 billion.

The other $41 billion is allocated to capital programmes.

Overall the capital budget has decreased by $7.1 billion from $198.5 billion in FY 2008/09.

Capital A expenditure is programmed in FY2009/10 at $170 billion, down from $180.1 billion in FY 2008/09, a decrease of $9.37 billion or 5.2 per cent.

Capital B expenditure is budgeted at $20.6 billion in the upcoming fiscal year - an increase of $2.2 billion over the expenditure in FY 2008/09.

renee.shirley@yahoo.com