PM defends changes to Public Finance Management Act
Amendment strengthens loopholes, covers blind spots, addresses unintended consequences
Saying there is no ulterior motive behind the Public Finance Management Bill, 2023 that was debated in the House of Assembly yesterday, Prime Minister Philip Davis said every change in the new bill either strengthens loopholes within the existing legislation, or covers blind spots and addresses unintended consequences.
Once enacted, the Public Finance Management Bill, 2023 will repeal and replace the Public Finance Management Act, 2021; Fiscal Responsibility Act, 2018; and sections of the Financial Administration and Audit Act, which Davis has on numerous occasions called flawed and unworkable.
Leading off debate on the legislation in Parliament yesterday, he maintained that critique.
“While I am sure the many technical experts who developed the framework for these acts put in a lot of hard work, there was a clear failure on the former administration’s part to ensure that these two pieces of legislation were practical and consistent with sound public policy,” Davis said.
“While the stated purpose of the legislation was to demonstrate that the former administration was reform-minded in its approach to managing the country’s finances, the legislation itself was unworkable from the start. After all of their talk and empty rhetoric about raising standards, the truth is that their legislation failed to meet the reality test.”
The lengthy bill, among other things, allows for temporary deviations from the government’s fiscal objectives, provided that if the deviation has not been cured before either the mid-term budget or annual budget, it must include the measures government intends to take to return to compliance with fiscal objectives.
It also empowers the Fiscal Responsibility Council to request information necessary to carry out their duties and produce reports.
“I know that there are those opposite who pretend that they are concerned about the amendments we are making. But the truth is, deep down, they knew how flawed their approach was. I suspect they didn’t care about these flaws because they knew that an early election was coming. So, they brought into force these two pieces of legislation just weeks before the election,” Davis said during debate.
“After all their talk about fiscal discipline, they ensured that these laws were made law at the very end of their term, when it would have practically no impact on their administration. I guess their promise to help the poor wasn’t the only thing they wanted to do in that “next term” that never happened. It seems, improving the government’s financial management was also a part of that hypothetical “next term”.
The Fiscal Responsibility Act was implemented in 2018, while the others went into effect in July 2021, just months ahead of the September general elections.