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Government to publish simplified version of the budget today

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Sunday, February 17, 2019

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Starting this fiscal year, the Government of Jamaica will be publishing in both national newspapers t he Citizen's Guide to the Budget starting today.

According to the Fiscal Policy Paper (FPP) which was tabled by the Minister of Finance and the Public Service Dr Nigel Clarke on Thursday along with the budget, the innovation is designed to “present the budget in simple non-technical terms for the benefit of all segments of the Jamaican population”.

The document is expected to be published on the Sunday following the tabling of the budget annually from now on, the FPP said on fiscal reporting.

The FPP said that going forward there are some significant fiscal reporting changes to be implemented, most notably:

At the start of FY 2016/17, the central government adopted a Revised Chart of Accounts (RCOA). Although the Estimates of Expenditure for 2016/17 were prepared and presented in the RCOA format, the Revenue Estimates were not. The RCOA establishes a set of standard accounting codes for revenue, expenditure, assets and liabilities to be used throughout the public sector in order to standardize Government's financial reports.

The revenue estimates presented in this FPP and in the Revenue Estimates 2018/19 utilise the RCOA reflecting a number of changes in the classification of some revenue elements. For example, effective 2017/18, collections for Quarry tax, Telecommunications licences and import licences collected by the Trade Board and formerly captured as non-tax revenue are now reflected as tax revenue, while royalties are now captured as non-tax revenue rather than capital revenue.

As of 2018/19, the government has formally reflected the revenues from three de-earmarked entities — the CHASE Fund, Tourism Enhancement Fund (TEF) and the Jamaica Civil Aviation Authority (JCCA) as non-tax revenue flows. These entities were, in the past, allowed to retain their revenues to carry out their activities. However, with the advent of the de-earmarking policy, these three entities are now fully reflected in the central government's Estimates of Expenditure.

In conformity with the enhanced fiscal rules, the ministry will continue monitoring and reporting on the specified public sector (SPS) in 2019/20. Reporting on central government operations and on public bodies will continue; however, these will be augmented by the compilation of the fiscal balance and public Debt for the SPS, which started in 2017/18, as required by the FAA Act 2014.

Based on assessments done by the ministry and authenticated by the Auditor General's Department, no public body meets the criteria to be excluded from the SPS. Thus for 2018/19 to 2022/23 forecast, the SPS equates to the overall public sector.

The Estimates of Expenditure as of 2018/19 includes forward expenditure estimates or 'forward estimates' and covers three future financial years. The forward estimates are aligned with the medium term aggregate expenditure ceilings as reflected in the fiscal management strategy.

These estimates are indicative and are not voted on by the Parliament. The Parliament will continue, as it currently does, to vote only on the expenditure presented for the budget year (in this case 2019/20). The spending authorisation by Parliament will continue to be only in respect of the expenditure for the budget year. The Appropriations Bill will continue to reflect only the appropriations for the budget year.

There will also be presentational changes to the Estimates of Expenditure including:

a) the amalgamation of the Capital A & Capital B Budgets of each ministry, into a single Capital Budget Head for the ministry

b) The removal of amortisation from the Capital Budget to a new Head: 20017 – Public Debt Service (Amortisation), under the Recurrent Budget to allow the Capital Budget to exclusively reflect the Central Government's Public Investment Projects. The inclusion of amortisation under the Capital Budget has over the years been a source of confusion to users of the Estimates of Expenditure.

c) amalgamation of the budgets of the courts under a Single Head 28058 — The Judiciary. This will affect the following courts and Court Management Services, each of which previously appeared as individual Heads of Estimates and received separate budgetary allocations : Head 28023 – Court of Appeal; Head 28027 – Parish Courts; Head 28026 – Family Courts; Head 28028 – Revenue Court; Head 28029 – Supreme Court; Head 28054 – Court Management Services.

Within six months of the passage of the Appropriation Act for the respective fiscal year, the minister of finance is required to table in both Houses of Parliament, a Fiscal Policy Paper (FPP). This requirement arose under the enhanced fiscal rules, which were made effective through amendments to the Financial Administration and Audit (FAA) and Public Bodies Management and Accountability (PBMA) Acts in March 2014.

Another requirement under the FAA Act is that the annual Estimates of Revenue and Expenditure and the accompanying FPP be tabled simultaneously in February of each year, such that passage of the budget prior to the start of the new fiscal year is facilitated.

The tabling of both the annual Estimates of Revenue and Expenditure and the accompanying FPP affords both Houses of Parliament the opportunity to examine both sides of the budget.

This complete information satisfies the need for transparency and robust debate among parliamentarians who are entrusted with oversight of the management of public funds and have ultimate responsibility for the performance of the economy.


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