Govt using tax revenue surplus to pay arrears to SMES — Clarke
MINISTER of Finance and the Public Service Dr Nigel Clarke says that a “plethora” of small- and medium-sized businesses will benefit from an allocation of $1.5 billion included in the supplementary estimates for 2018/19 for bills owed to them by government ministries, departments and agencies (MDAS).
Dr Clarke told the Mayberry Investment Limited’s (MIL) first monthly investors forum for 2019 at the Knutsford Court Hotel in New Kingston on Wednesday that the Government is making sure to pay these bills because of the catalytic effect it will have on the economy.
“As the Government reduces its arrears and in fact starts pumping oxygen into the system by paying its overdue bills, then these businesses will have the cash flow to make better decisions; they can make more investments, and so forth, and you end up with a virtuous cycle,” he said.
“So, we are focusing on paying off the arrears, but it doesn’t stop there,” Dr Clarke continued.
As he explained it, the Government has already allocated $7 billion in the First Supplementary Estimates to pay off some of the arrears owed to the Jamaica Public Service Company (JPS) to ensure that the country’s streetlights are fixed. JPS had committed to fixing 12,000 of these lights by March, with another 6,000 scheduled to be addressed by December.
Clarke noted that $1 billion had also been allocated to the National Health Fund (NHF) to pay off some of its arrears, and $700 million to the National Water Commission (NWC) to cover outstanding bills owed by Government’s MDAS.
The Jamaica Urban Transit Company (JUTC) has been allocated $10.5 million to meet its operating expenses; the Montego Bay Metro Limited allocated $30.7 million for operating expenses; and the Spectrum Management Authority $325 million to cover repayment from the sale of a licence.
“So the increased economic activity that we are seeing is generating increased revenues that are being used in a way to ensure that the cycle continues, and the benefits are spread wide,” said Clarke.