1. Protocol/Thanks

• Agencies/Heads/Vernon James
• Special Interest Groups

2. Significant Presentation for many reasons

Personal Note - Tenth opening of the Budget Debate

3. More important. Seldom has there been so much anticipation leading up to the presentation of the Revenue Budget. No secret that the last four months have witnessed volatility in the foreign exchange and money markets, both external and domestic.
4. Add to that mix, war in Iraq, turmoil in the airline industry, SARS – only certainty is uncertainty.
5. What is clear, whatever the problems, however they originate, we are on our own..
6. Whilst there is no magic solution, and whilst there are several external factors beyond the control of any government, it is generally accepted that a clearly defined credible path to reduce and then eliminate the fiscal deficit will provide the framework within which more rational decision-making can take place.
7. I am convinced that by the end of the presentation, this would have been achieved.
8. Everyone agrees that there are difficult choices to be made. I have been bombarded with suggestions and proposals as to how these can be executed. Whilst most have been well meaning, a large percentage would seek to have the maximum revenue inflows from sources which affect no one. Clearly impossible.
9. Over the years I have indicated that with increased liberalization of the economy, with the publication of more information and more data on a regular basis, there is greater interest in the budget process than ever before.
10. I know for a fact that what is said today is being monitored in New York, in Washington and in London, with as much interest as in Kingston or Port Antonio. Perhaps, of greater importance than what is said today is how we behave as a country over the next fiscal year and the medium term. Social instability is no longer of local interest only. We had better learn to express differences of opinions in ways which are not destructive to the economy and to our international reputation.
11. This external interest is not simply from Jamaicans living abroad, but also from managers of mutual funds, officials in insurance companies or banks, who have committed resources from their clients to purchase GOJ bonds and hence, have a very strong interest in the decisions which we take here.
12. Similar interests from their counterparts in Jamaica, but at the same time, there is another element to the equation which transcends the mere balancing of the books, per se. As all of us in this Honourable House who face the electorate, and were selected through a democratic process know, the books must be balanced. However, in the final analysis, the result must be a society and a country where we wish to live and where we hope our children and grandchildren will choose to live.
13. In short, the credibility of the budget rests partially on our being able to produce a financial programme, which satisfies our creditors and at the same time, provides the ordinary citizen of this country, clear reasons for hope for a better life. At the same time, the credibility of the country rests on our demonstration of social stability.
14. So as I seek to address various components of this "audience", it is imperative that every special interest group, even as they seek to advance and defend their positions, views with equal respect the positions of others who feel as strongly about their own cause.
15. Our job, as an Administration, is to take all these viewpoints into consideration and yet produce a mix which meets the criterion of technical credibility which is most important to the creditors, even whilst protecting the inputs for greater social equity and providing the stimulus for increased economic activity.
16. Within the context of the above, my presentation will be structured as follows:
17. First, I will review the last calendar year as well as fiscal year 2002/03.
18. Then I will address the major challenge for this year and for the next three – reducing and then eliminating the fiscal deficit.
19. I will then look at the main targets/objectives for the present fiscal year 2003/04 and as we have done over the last several years, targets for the medium term.
20. I will then speak directly to the health of the financial system. Over the past several months that issue has been the focus of much attention, particularly with respect to the operations of the entities, loosely called the "securities dealers".
21. I will then provide highlights of the expenditure budget. Obviously, given the fact that this document has been in public circulation in the past two weeks, there are no real secrets here. I wish only to highlight those activities which signal special thrusts by the Administration.
22. The penultimate section of the presentation is perhaps the most critical – how will this budget of just over $260 billion be financed. I will then wrap up the presentation.

 

 

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