Long Island MP Adrian Gibson yesterday recommended that the government amend the Fiscal Responsibility Bill to force the minister of finance to appear before a joint committee of parliamentarians and senators when spending beyond the prescribed limits within the legislation.
Debate on the bill began in the House of Assembly yesterday.
“Mr. Speaker, perhaps there should – and I am advocating also – be a section of the bill wherein the minister of finance appears before a select committee of the House or a joint committee of the upper and lower houses to explain any breach of fiscal targets, responsibility objectives and adjustment plans,” Gibson said.
“The recommendations and/or any corrective actions of such a committee could then come to the wider Parliament.”
Gibson said while he appreciates the government’s attempt to hold itself accountable with the proposed legislation, there appears to be a lack of adequate penalties and sanctions or incentives to encourage compliance.
He said “backsliding” by future governments must be avoided at all costs.
“More teeth are needed, Mr. Speaker,” he noted.
“This will require governments to abide by the reports and/or findings of the Fiscal Responsibility Council.
“This will also buttress the resultant actions of Parliament.”
During debate, Exumas and Ragged Island MP Chester Cooper said the bill has no real consequences when the government overspends or acts in contrast to its legislated fiscal caps and goals.
He recommended that the Public Accounts Committee, which is the opposition’s greatest tool in holding the government accountable, should have a defined role in enforcing the legislation.
The proposed legislation has outlined targets for government deficits over the next three years to try to achieve a significant reduction in debt and deficits.
The debt-to-GDP ratio stood at approximately 58 percent at the end of the 2017/2018 fiscal year.
The deficit was 5.8 percent of GDP in the same fiscal year.
The government wants that deficit number to be no higher than 0.5 percent of GDP by the end of 2020/2021 fiscal year.
The legislation would cap the deficit for this fiscal year at a maximum of 1.8 percent.
The target deficit for the 2019/2020 fiscal year is no more than 1 percent of GDP.
The government can, however, provide explanation in the form of a fiscal adjustment plan, in the event those targets were not met.
The government does not have to present an adjustment plan if it remains within the compliance margins outlined in the legislation.
The margin cannot be outside of 0.5 percent of GDP.
An independent five-member Fiscal Responsibility Council of members of civil society and with specific areas of expertise in law, business, economics, accounting and finance is expected to review the Fiscal Strategy Report before it goes to Parliament.
Once passed, the government intends for fiscal responsibly legislation to come into force on October 1.
The proposed Fiscal Responsibility Council, however, would come into force on July 1, 2019, “in time for the council to review and assess the 2019/2020 budget”.
Leading debate yesterday, Acting Prime Minister Peter Turnquest said the government, with the enactment of the legislation, would bring an end to reckless government spending, irresponsible fiscal management and unbridled deficit financing and debt build-up.