The Tribune

By  NATARIO McKENZIE

Tribune Business

Reporter

nmckenzie@tribunemedia.net

A FISCAL Responsibility Act will be “for naught” if the Government fails to commit to spending discipline and control, a key Cabinet minister admitted yesterday.

During his presentation 2014-2015 mid-year Budget presentation, Michael Halkitis, minister of state for finance, said the Christie administration has pledged to launch a formal consultation on whether the Bahamas should  introduce Fiscal Responsibility legislation. 

“We’ll explore it. We’ll do the discussion paper to get the feedback and get advice, and if that is the right thing for us we will do it, bearing in mind all the experiences  that other countries have had,” Mr Halkitis said.

“Just passing a law that says Fiscal Responsibility Act is not a panacea. It doesn’t solve the problem in the absence of discipline and commitment of the administration to bring the finances in order.

“You can have a Fiscal Responsibility Act until the cows come home. If there is not a commitment by the Government to act responsibly, like this administration  has done, then it would be for naught.”

Prime Minister Perry Christie  last week acknowledged that there has been much public commentary on the appropriateness of Fiscal Responsibility legislation in the Bahamas.

“Such legislation is increasingly common in advanced economies with the stated purpose of guarding against profligate expenditures by governments,” he said then.

“However, if not well designed, such legislated restraints have the potential to inappropriately inhibit the proper functioning of Government in periods of recession, thereby compounding the hardship of those with the greatest need for the governmental assistance.”

Mr Christie added: “In light of the gravity of this matter from a public policy perspective, and in order to enlighten the debate in a Bahamian context, the Government will commission the preparation of a policy paper on the issue of fiscal responsibility legislation.

“Upon its completion, the paper will be released for public consultation and discussion such that there can then ensue a full and balanced national dialogue of this issue. This will allow informed discussion on whether this type of legislation is appropriate for the Bahamas at its current stage of development and, if it is deemed to be appropriate, which of the many models of fiscal responsibility legislation would the most appropriate for our country.

“It is hoped that this paper can be completed and published by the summer of this year, with any final recommendation on whether legislation is appropriate in the Bahamian context to be presented to Cabinet by the end of this calendar year.”