By Alecia Smith
KINGSTON, Jamaica, (JIS) – The National Housing Trust (NHT) is projected to spend $58 billion in the 2021/2022 financial year, and another $65 billion in the ensuing fiscal period, as it continues to provide affordable housing solutions for Jamaicans.
This was disclosed by minister without portfolio in the ministry of economic growth and job creation, Senator Aubyn Hill, while piloting the National Housing Trust (Amendment) (Special Provisions) Act, 2020, during the sitting of the Senate on Friday, December 18.
He noted that the NHT’s core purpose is being improved and “progress is being made to achieve its main objective of building many more housing solutions for the deserving Jamaican people.”
“With that volume of expenditure, the government will remain focused…bringing more housing solutions that Jamaicans can afford to the market,” he added.
Senator Hill said that the government is increasing its investment in housing developments despite the continued annual withdrawal of $11.4 billion from the NHT to support the budget for the next five years, which the Bill, which was approved, will facilitate.
“Next year, even after the drawdown, the NHT’s housing expenditure is programmed to be 2.6 times (260 percent) more than what the NHT spent on housing in 2016/2017. In the following year (2022/2023), the NHT is expected to spend on housing expenditure, three times (300 percent) as much as it did in 2016/17,” he pointed out.
He noted that the continuation of the drawdown from the NHT is necessary given the severe impact of the coronavirus (COVID-19) pandemic on the economy.
Senator Hill contended that “an important requirement for a quick economic recovery will be for us to be able to continue almost as normal without compromising macro-economic stability or significantly interrupting the government’s investment programme, or the services to our Jamaican people.”
“So…if we have to respond by either significantly interrupting the investment programme of the government for multiple years, or by curtailing services being offered, we would prolong the time to economic recovery. For these reasons, due to the extremely severe economic effects of the COVID-19 pandemic, we are really obliged to continue the contributions from the NHT,” he stressed.
According to the Bill’s Memorandum of Objects and Reasons, it is estimated that the discontinuation of the $11.4 billion contributions provided by the NHT, during the present economic climate, will result in a further reduction in the government’s financial resources and will impair the State’s ability to implement social well-being measures required to stabilise the economy and facilitate economic growth.
Senator Hill noted that today, the NHT spends nearly five times as much on housing expenditure as it does on the contribution to the government. This is up from two times when the drawdown first occurred in 2013.
“Yes, we are getting from NHT but the amount of the cash flow that we are taking is smaller and the amount of money spent on houses is significantly larger, therefore, the objective of the NHT is being kept while we use this money at this time given an extremely extraordinary pandemic period,” he argued.
Hill further pointed out that due to the pandemic, government revenues are expected to decline by at least $84 billion for the fiscal year 2020 to 2021. For the first seven months of this fiscal year up to October 2020, government revenues declined by $60 billion.
“So, both the actual and projected declines are direct results of the COVID-19 pandemic…In fact, because of the pandemic, which is something unusual for over a hundred years, we propose an extension of the NHT contributions across the economic recovery period that is, for another five years,” he said.
The arrangement, which was to have ended in March next year, will instead expire in March 2026.
