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With the contraction of the world economy, many states have sought to implement measures to curb expenditure for fear of plummeting into financial crises.
On the opening day of the debate on the Estimates of Revenue and Expenditure for 2013/2014, Prime Minister and Minister for Finance, Dr. Kenny D Anthony, announced an intention to reduce the country’s spending.
In acknowledging the need to restore the fiscal position of the island to a viable and sustainable state, Dr. Anthony presented to the House of Assembly, a draft of the Estimates of Expenditure which is $134 million less than last year’s.
Dr. Anthony explained this shift is to contain the island’s fiscal deficit, which currently stands at an estimated nine percent per GDP.
“The actual out turn for the financial year 2012/2013 was in fact 1.285 billion dollars despite the budgeted estimates. Clearly this proposed increase over the out turn for 2013/2013 reflects to a large extent, upward pressure on the wage bill due to the proposed salary increase to public officers,” he said.
Last year’s approved estimates totalled $1.457 billion. However, this year, the draft estimates is $1.327 billion. The total recurrent expenditure is expected to decline by an estimated 1.6 percent less than the approved estimates for 2012/2013, representing some $947.1 million.
In keeping with its belt–tightening measures, government intends to cut capital expenditure by more than 20 percent.
“At $380.3 million, the proposed capital expenditure budget for 2013/2014 represents 114.6 million or 23.2 percent decrease compared to the approved estimates for 2012/2013,” the finance minister noted.
The overall cuts in expenditure are more likely to be felt mainly in respect of capital expenditure.
The prime minister believes this may be the first time since 1979 that a calculated effort has been made to reduce government’s expenditure.