PM announces raft of measures to cut non-essential spending

 

 

A pause on the purchase of motor vehicles using government concessions is among the latest measures intended to rein in non-essential spending, as Jamaica moves to the next phase of rebuilding, a year after monster storm Melissa. 

 

As Jamaica counts the cost of Hurricane Melissa, the government is tightening its own belt, with the spending restrictions aimed at freeing up resources for the country's recovery. 

 

Prime Minister Dr. Andrew Holness announced the measures at a special press conference on Tuesday.

 

These include a cap on the use of motor vehicle concessions for public sector officials as well as the scaling back of Christmas parties for the second consecutive year.

 

"The proper memo will be circulated to public sector bodies. So we are encouraging public sector bodies and the ministries not to have retreats outside of their office facilities, and whatever celebratory activities should be at a minimum. I'm also announcing an immediate pause on purchases of motor vehicles to be assigned to public officials until the 31st of March 2027. These measures are part of a continuing review of expenditure," said the Prime Minister, who noted that he continues to use an 11-year-old vehicle and quipped that "if I can bare it, everybody else must bare it too". 

 

It comes on the heels of the government's announcement Friday that there will be a pause on non-essential overseas travel across the public sector until March 31, 2027. 

 

Dr. Holness has also instructed a review of all government property leases to ensure value for money.

 

"Government spends billions of dollars on rent. We must examine the cost, use and suitability of those accommodations. Ultimately, preliminary analysis indicate that existing rental expenditures across government could support a long-term lease arrangement through a public-private partnership to develop a government campus at minimal additional costs to the public purse. We will evaluate that option carefully, including the long-term cost and value for money."

 

But when pressed, the Prime Minister stopped short of outlining the projected savings for the cost-cutting measures. 

 

"Nowhere have I said we are going to cut back on expenditure. We are going to cut back on certain types of expenditure so we can spend more on certain types of things. That's what I've said. So instead of buying motor vehicles and going on trips, we are going to fix roofs. It's as simple as that. So the intention of these measures are to make sure that the public expenditure is targeted at the important things. So it's not run with it. It's frugality at its best," he insisted.

 

In the meantime, Dr. Holness has directed the Ministry of Finance and the Public Service to clear all payments for work done by contractors. 

 

"When we are critical of contractors, of their speed and the quality of their work, their retort is 'But you owe me'. We are giving instructions to the Ministry of Finance and the various ministries, to clear all payment arrears to contractors for work completed and certified that it is not in dispute." 

 

He said some adjustments will be made to the recently implemented increase in regulatory fees for the insurance sector by Financial Services Commission (FSC).

 

"We have heard the calls of the industry in relation to the recently implemented increases in FSC fees and we will be making some changes. We cannot roll back all the increases but we will correct some anomalies. For example, we will exclude reinsurance assets, which are abnormally high after Hurricane Melissa, from the asset base on which the fees are calculated, and we are also reviewing the treatment of non-core securities dealers. To accommodate the scale of recovery and reconstruction, we will likely need to seek parliamentary approval for a further temporary suspension of the fiscal rules for 2027-2028," he advised.