The much-touted Constituency Development Fund (CDF) could be one of the victims when the Government begins the process of slashing its expenditure budget to move it in line with current revenue.

The CDF was a key plank of the Jamaica Labour Party's campaign in the lead-up to the 2007 general election and has been celebrated by the Government as one of its achievements since being elected.

Approximately $2.4 billion was allocated in the 2009-2010 Budget for the CDF, which is shared among all 60 members of parliament for work in their constituencies.

Painful decision

However, Prime Minister Bruce Golding yesterday made it clear that, though it would be a painful decision to cut the CDF, it was a possibility.

"When the Ministry of Finance approaches the expenditure budget with its scalpel, we are going to protect health, education and security and the social safety net," Golding told journalists during the post-Cabinet media briefing at Jamaica House in St Andrew. "As to what will happen with the CDF, which falls among the rest, I can't say at this stage."

He added: "I know the value of it (the CDF) and I know the impact that it has had and we will certainly take that into account, but I cannot give any commitment that it will not have to make a contribution to bringing that fiscal deficit back in line."

The prime minister was responding to questions about the possible conditionalities to be imposed by the Inter-national Monetary Fund (IMF) as part of any agreement to have Jamaica resume a borrowing relationship with the fund. According to Golding, the IMF would not be imposing the terms, but would work with local authorities to agree on a programme to move the country out of its present economic crisis.

"The IMF is not coming with a one-pill-cure-all," Golding argued, as he pointed to conditionalities the fund has imposed on other countries, which would not work in Jamaica.

He said the IMF was notdictating the changes but pointing at the Government's fiscal operations and insisting that there be cuts in some areas.

Golding made it clear that his administration agreed with the IMF that, with the dramatic fallout in revenue, its spending plans have to be revised.

At the end of June, the Government's revenue for the fiscal year was 11 per cent below budget and seven per cent below the corresponding period last year, Golding disclosed.

He admitted that this has placed the Government off course in meeting its fiscal deficit target of 5.5 per cent and forced it to cut expenditure.

In fact, Golding admitted that the Government would have to present clear plans to keep the deficit in check if it wants to qualify for the US$1.2 billion standby arrangement with the IMF.

Groups to meet

Golding said he had already met with the trade union leaders, the Opposition and the private sector in individual meetings, and would attempt to meet with all three groups together next week as the Government continues its talks with an IMF team now in the island.

"In terms of the details of an IMF agreement, I was told by the technical team that they are almost 90 per cent through. There are some issues that are still being worked through and there are some figures that are being double checked," he said.

The prime minister said the plan was to conclude the technical discussions by the end of the first week of August with the finance minister presenting a final proposal to the Cabinet with a draft "letter of intent", which is to be shared with the social partners.

The Cabinet is expected to make a final decision by the end of August so that the application can be submitted to the IMF before its board resumes its work in early September.

arthur.hall@gleanerjm.com