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Shaw avoids fiscal report in maiden appearance - Signals 6-10% growth target
The new Jamaica Labour Party government will craft its policies around projected growth of 6-10 per cent per annum, Finance Minister Audley Shaw signalled in Parliament this week.
Shaw, whose speech avoided any report on the true status of the country's fiscal accounts, including the off-budget items, said he would likely not give an update until the presentation of the supplementary budget.
He did not specify a date, but based on tradition he could lay the supplementaries or Revised Estimates of Expenditure anytime between December and February.
Shaw said, however, they would be 'early' this year.
A deficit
In the meantime, the August monthly report on the fiscal accounts shows a deficit of $22.74 billion, which is $2.8 billion below projections. The official figures, however, do not reflect several off-budget items.
"In recent days there have been much discussion regarding the future outlook of the economy," said Shaw Tuesday.
"Currently, the entire fiscal programme is being reviewed in keeping with the new administration's mandate."
His growth target, he added, will rest on five pillars, including reducing the fiscal deficit, putting reins on the debt, and 'maintaining stability and order', a possible reference to currency speculators, in the money and foreign exchange markets.
The Finance Ministry, in the fiscal year to August, has borrowed $65 billion - $2.7 billion less than anticipated up to that period - or 57 per cent of the total $113.8 billion of debt to be raised for the full year.
External borrowings of $1.97 billion were $11 billion behind target.
However, on Wednesday, Deutsche Bank Securities successfully arranged a US$150 million (J$10.5 billion) issue by reopening the 2039 eurobond.
In two hours, subscriptions to the offer had topped US$550 million.
External borrowings
Shaw in a release said the issue wraps up external borrowings for the year. Domestic debt issues will continue, however, with two variable rate investment bond issues on offer this month in addition to three treasuries - 12-month, 6-month and 3-month bills.
Shaw says the current administration will continue to stress macroeconomic stability, but notes that policy actions will be targeted at reducing electricity costs, public sector efficiency, investment promotion to generate jobs, and tax reform to stimulate investment and savings.
He has already announced the planned abolition of transfer tax on real estate transactions and the reduction of stamp duty.
Fiscal year to date, the treasury has recorded $82.3 billion of tax collections, $142 million less than anticipated.
The primary balance, which strips away debt servicing from the accounts, was almost three billion better than expected at $20.2 billion.
Shaw's five policy pillars
1. A credible debt reduction plan that will reduce the cost of debt servicing.
2. A policy to reduce the cost of electricity over time to industrial, commercial and domestic users.
3. A commitment to ensuring an efficient, highly motivated public sector that will improve service delivery to the private sector and the citizens of Jamaica.
4. Tax reform to stimulate investment and savings, and enhance revenue collection; and
5. Investment promotion to aggressively drive new business start-ups, create jobs and earn foreign exchange.
lavern.clarke@gleanerjm.com
The new Jamaica Labour Party government will craft its policies around projected growth of 6-10 per cent per annum, Finance Minister Audley Shaw signalled in Parliament this week.
Shaw, whose speech avoided any report on the true status of the country's fiscal accounts, including the off-budget items, said he would likely not give an update until the presentation of the supplementary budget.
He did not specify a date, but based on tradition he could lay the supplementaries or Revised Estimates of Expenditure anytime between December and February.
Shaw said, however, they would be 'early' this year.
A deficit
In the meantime, the August monthly report on the fiscal accounts shows a deficit of $22.74 billion, which is $2.8 billion below projections. The official figures, however, do not reflect several off-budget items.
"In recent days there have been much discussion regarding the future outlook of the economy," said Shaw Tuesday.
"Currently, the entire fiscal programme is being reviewed in keeping with the new administration's mandate."
His growth target, he added, will rest on five pillars, including reducing the fiscal deficit, putting reins on the debt, and 'maintaining stability and order', a possible reference to currency speculators, in the money and foreign exchange markets.
The Finance Ministry, in the fiscal year to August, has borrowed $65 billion - $2.7 billion less than anticipated up to that period - or 57 per cent of the total $113.8 billion of debt to be raised for the full year.
External borrowings of $1.97 billion were $11 billion behind target.
However, on Wednesday, Deutsche Bank Securities successfully arranged a US$150 million (J$10.5 billion) issue by reopening the 2039 eurobond.
In two hours, subscriptions to the offer had topped US$550 million.
External borrowings
Shaw in a release said the issue wraps up external borrowings for the year. Domestic debt issues will continue, however, with two variable rate investment bond issues on offer this month in addition to three treasuries - 12-month, 6-month and 3-month bills.
Shaw says the current administration will continue to stress macroeconomic stability, but notes that policy actions will be targeted at reducing electricity costs, public sector efficiency, investment promotion to generate jobs, and tax reform to stimulate investment and savings.
He has already announced the planned abolition of transfer tax on real estate transactions and the reduction of stamp duty.
Fiscal year to date, the treasury has recorded $82.3 billion of tax collections, $142 million less than anticipated.
The primary balance, which strips away debt servicing from the accounts, was almost three billion better than expected at $20.2 billion.
Shaw's five policy pillars
1. A credible debt reduction plan that will reduce the cost of debt servicing.
2. A policy to reduce the cost of electricity over time to industrial, commercial and domestic users.
3. A commitment to ensuring an efficient, highly motivated public sector that will improve service delivery to the private sector and the citizens of Jamaica.
4. Tax reform to stimulate investment and savings, and enhance revenue collection; and
5. Investment promotion to aggressively drive new business start-ups, create jobs and earn foreign exchange.
lavern.clarke@gleanerjm.com
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