The House of Representatives passed amendments to the Financial Administration and Audit Act and the Public Bodies Management and Accountability Act on Tuesday, as part of the Government’s fiscal responsibility framework.
Minister of Finance and the Public Service, Hon. Audley Shaw, who piloted both Bills, stated that this fiscal responsibility framework will operate as the centrepiece of the reforms being undertaken to improve the management of public finances.
“The purpose of the proposed framework is to address areas of weakness in the existing fiscal policy and fiscal administrative systems in Jamaica,” he said.
The Minister stated that an unacceptable high level of public debt is hampering the country’s efforts to achieve a level of growth sufficient to meet the expectation of its people, suggesting that there are serious weaknesses in the country’s political management framework.
The Public Bodies Management and Accountability Act seeks to prohibit public bodies from taking steps to enter into negotiations to borrow money, by way of an issue of bonds, without prior approval of the Minister. The Act further seeks to provide for corporate plans of public bodies, and any subsequent modifications of such plans, to be submitted to the Minister for endorsement and laid before the House of Representatives and Senate for approval.
The Bill also requires that the Minister lay before the House and the Senate, for approval before the end of each financial year, estimates of revenues and expenditure in respect of all public bodies.
The Financial Administration and Audit Act’s amendment seeks to impose a duty on the Minister of Finance to table in Parliament a Fiscal Policy Paper containing, among other things, a macroeconomic framework providing an overview of the state of the economy.
The Bill also seeks to impose on the Auditor General a duty to review the fiscal policy paper and report to Parliament thereon, and to authorise the Finance Minister to withdraw, suspend, or impose conditions on any expenditure authorised under a warrant issued pursuant to section 117 of the Constitution, if the exigencies of the financial situation so require.
Mr. Shaw said that these changes will allow Parliament to have greater oversight into the operations of public bodies.
“We have seen where public bodies, over the years, have invariably and, on some occasions, become laws unto themselves. So the time has come where we have to reign in public sector entities, and we have to bring them under strict management,” the Finance Minister said.
Opposition Spokesperson on Finance, Dr. Omar Davies, stated that the Opposition was in support of the amendments. He, however, noted that it was unusual to have in legislation targets set for a specific date.
In response, Minister of Education, Hon. Andrew Holness, said that the legislation was changing the way in which Government does its business.
“We are not depending on legislation to keep us in check, but we are putting in place the legislation as a show of good faith to our international development partners, and to secure a new dispensation in the management of our macroeconomic affairs,” Mr. Holness said.
Both Acts were passed by the House of Representatives.