Jamaican Gov’t announces $25 billion coronavirus stimulus package
Dr Nigel Clarke (file photo)
The Government is providing a $25 billion stimulus package to mitigate against the expected negative impact of the coronavirus (COVID-19) on the local economy.
Minister of Finance and the Public Service, Dr Nigel Clarke, made the announcement on Tuesday in a statement in the House of Representatives.
He described the package as the “largest fiscal stimulus in Jamaica’s history”.
Clarke said: “Pumping $25 billion into the economy at a time of uncertainty like this helps to support economic activity in Jamaica.”
He said the Government is to introduce what it calls a CARE programme for affected employees. The programme has several elements, including a business employees’ support programme which is to provide temporary cash transfers to businesses in targeted sectors. The amount each entity is to get will be based on the number of its workers who are kept in employment.
The Administration is also to implement a 'supporting employees in the transfer of cash programme' to provide temporary cash transfers to individuals where it can be verified that they lost their employment as a result of the COVID-19 crisis in Jamaica. This measure is to remain in place for a specific time.
Additionally, there is to be a special soft loan fund to assist individuals and businesses who/which have been hit hard by the problems associated with the virus.
And there is also to be support for the poor and vulnerable by way of COVID-19 related grants.
Clarke said the details relating to implementation and accountability of these programmes are being finalised, and are to be announced next Tuesday. He said as a result of the expected increase in expenditure, a third supplementary estimates is to be tabled in Parliament before the end of the current financial year on March 31.
Meanwhile, Clarke said other measures to assist the economy to stay afloat include the 1.5 per cent cut in the General Consumption Tax (GCT) to 15 per cent, which is to put back $14 billion in the hands of consumers and support consumption.
Also, he said $1 billion in tax credits to the small business sector will provide critical cash flow support as well as what the finance minister referred to as the “dramatic reduction in regulatory fees” which should serve to incentivise coconut, coffee and cocoa and spice farmers to greater production.
Clarke had made those announcements on March 10 when he opened the 2020-2021 Budget Debate.
He said with the banking sector having agreed to forgo the reduction in the Asset Tax for one year, this is to add $3 billion to the Government’s Covid Contingency plan, bringing the amount to $10 billion.
Other interventions include the waiver of the Special Consumption Tax (SCT) on 100,000 litres of alcohol to be used to make hand sanitisers. The sanitisers are to be given to the National Health Fund (NHF) and the Ministry of Health.
The following are also to be implemented:
1) Customs Duty to be waived on the importation of mask, hand sanitisers, gloves and liquid hand soaps for 90 days.
2) Companies engaged in the business process outsourcing (BPO) sector are to be allowed to move equipment off site to allow working from home by employees.
3) Discussions are under way with commercial banks with a view of ensuring cash flow support to businesses and consumers in affected sectors through deferral of principal payments, through new lines of credit and other measures.
Clarke noted that COVID-19 has, within a relatively short time, “significantly, sharply and suddenly curtailed economic activity around the world.
“In economic terms, the Covid crisis will certainly have adverse economic implications for the world and indeed, for Jamaica,” he said.