Money-hunting gov't takes $2b in dividend from NHT
A government on the hunt for money to fund its programmes has invoked its legal power to take approximately $2 billion from the National Housing Trust (NHT), the same entity that's expected to be called on to give more budgetary support for the next financial year.
The money is being transferred to central government coffers as a dividend, according to the Jamaica Public Bodies Estimates of Revenue and Expenditure for the financial year ending March 2018, which was tabled in the House of Representatives on Thursday.
Under the Public Bodies Management and Accountability Act, the NHT, which is a public body, is obliged to pay out dividends to shareholders, which include the Government. The Government's shares are held by the Accountant General's Department.
However, financial analyst Ralston Hyman believes that the Government is collecting the dividend now because of the tight fiscal space. He also expects the Andrew Holness administration to return to the NHT soon to take more funds for budgetary support.
"They need as much money to shore up the budget. We expect them to draw down on the NHT for the rest of the money to deal with the primary surplus," he said.
The Government has predicted "passive forecasts" for revenue and grants and the expenditure requirements for financial year 2017-2018. It expects to generate a primary surplus of $123 billion, which represents a shortfall of $9 billion. The target for the next fiscal year is $132 billion or seven per cent of gross domestic product.
The primary surplus is the amount of income left after the Government spends on its programmes.
The taking of almost $46 billion over four years from the NHT will end this fiscal year and the Government is reportedly considering going back to the trust.
'It's the responsible thing to do'
"Considering the NHT again is the responsible thing to do," said a government official, who wished not to be named because they were not authorised to speak on the matter.
The official spoke with The Gleaner Thursday - the same day the 2017-2018 budget was tabled and Audley Shaw, Jamaica's finance minister declined to speak with journalists on the NHT matter. He said he would address the issue when he opens the Budget Debate on March 9.
Holness, while opposition leader, criticised the 2013 withdrawal and his Jamaica Labour Party threatened court action to test its legality. Shaw called it a 'raid'.