Andrew Holness Budget Highlights!

So Jamaica’s PM Andrew Holness made a five hour long budget speech!  But luckily you don’t have to listen to the whole thing!  Here are five things you need to know from his budget speech, that could affect your pocket.

Number 1 is the increase in the minimum wage.

Now you probably heard about this one already. 

Effective June 1, Jamaica’s minimum wage is going from $13,000 a week to $15,000 a week.  For security guards, it’s going from $14,000 to $15,000 as well.

For my viewers abroad, the old minimum wage was about US$85 a week.  It’s now going to be US$97.

That’s US$2.42 an hour. Compare that to US$3.02 an hour in Trinidad.  Or US$7.25 an hour in the United States.

Now for some people who say that’s not enough to live on, you’re absolutely right! But the government does have to consider the impact of raising the minimum wage too fast.

If employers suddenly have to find way more to pay workers, chances are, they’ll have to let go some people.

And think about WHO typically earns minimum wage.  A lot of household helpers, gardeners, etc.

If YOU currently employ these people and are paying $13,000 a week, come June, you have to give them a raise to $15,000 a week.  If it suddenly went up to $25,000 a week as some people are calling for, would you still be able to employ that person?  Just something to think about.

Number 2 is the massive infrastructure projects planned for the next five years.

I haven’t heard much talk about this, but it was one of the things that really stood out to me from the budget.

A total of J$1 trillion in spending on roads, schools, hospitals, highways and more, is being planned for the next five years.

That’s US$6.5 billion!!

Of this amount, the government will be spending $500 million, and the other half is coming from private sector partnerships.

The projects include Highways, Local Roads (including community and farm roads), Bridges, Public Parks, Hospitals, Schools, Markets, Rural and Utility Water Supply, Sewerage, Irrigation, Houses, Police Stations, Fire stations, Tax Offices, Court Houses, Buses, Garbage Trucks, Entertainment Zones, Stadium and other Sporting Facilities, Digital Infrastructure, and IT systems.

These will massively transform Jamaica as we know it!  And it will also create a lot of jobs.  We’ll need people to build all these things.  And then once they’re built, we’ll need people to work in them.

Number 3 is another three months free on the Mandeville toll.

Which makes me happy because I live in Mandeville and use the toll at least twice a week.

The new toll road has been open since last year.  First they said they’d start charging in January.  Then they moved it to April.  Now they’re saying July.

Why the delay?  According to the PM, the government is still in negotiations with TransJamaican Highway.

TJH operates the other legs of the toll on the PJ Patterson Highway.  And they also have the first right of refusal on the new leg.  They’ve put in an offer, but it’s still being evaluated.

Until then, we get to drive the toll for free.

FYI – TransJamaican Highway is listed on the Jamaica Stock Exchange.  As I’m recording this on March 25, the share price is $3.25.  That’s more than double its IPO price in 2019.

And if they get through with negotiations for the new leg, which I’d say is highly likely, their revenue and profitability will go up, which will make this an even more valuable stock to own.

Keep in mind, this is not intended as financial advice.  Please consult your licensed financial advisor before making any investment decisions.

Number 4 is also another stock market item to watch.

It’s a potential IPO… and no, it’s not JPS!  We still haven’t heard any update from the government on that.

But Prime Minister Holness did announce that the Port Authority is looking to list some of its real estate assets on the market.

These are the properties that currently house Business Process Outsourcing (BPO) operations.

According to the PM, they’re already putting together all the legal, financial and advisory services for the transaction.

He specifically mentioned that the Government has a policy of enabling ordinary Jamaicans to own equity in wealth creating national assets.

They did it before by listing TJH and Wigton Wind Farm  on the Jamaica Stock Exchange.  Looks like Port Authority BPOs will be next.  So listen out for that.  Of course, I’ll keep you updated.

Now number 5 is something I didn’t hear.

Overall, it was a great budget speech, but I was disappointed that I didn’t hear much for entrepreneurs and the business community in general.

No tax incentives, no grants, no additional access to capital.

Finding the money to start or even keep your business afloat is one of the biggest challenges to entrepreneurs.  In fact, most new businesses fail within the first two years.  Access to capital has a lot to do with that.

Yet, small businesses account for the vast majority of jobs in this country.  So it’s disappointing that I didn’t hear much to support them at the national level.

The PM did talk for five hours, and the Finance Minister went another 4 and a half.  Between almost 10 hours of talking, they couldn’t mention anything to help businesses?

I know they couldn’t touch on everything, but this one seems like a pretty big oversight to me.

Maybe we’ll hear it later on in the sectorial debates when the Minister of Industry, Investment and Commerce makes his contribution.

Of course, we’ll be covering that as well.