The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s target of introducing Fiscal Responsibility legislation before the 2018-2019 fiscal year was yesterday praised by a civil society group, which said: “It’s worth getting it right.”

Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business that the timeline commitment given by the Deputy Prime Minister indicated the Government was “on the right path” with its reforms.

Acknowledging that ORG and many others wanted a Fiscal Responsibility Act passed “as soon as possible”, Mr Aubry conceded that the objectives outlined by K P Turnquest in the House of Assembly yesterday were “realistic”.

However, he promised that ORG and others would not “let up on the pressure” for the Government to fulfill its pledges of greater transparency and accountability, especially when it comes to its finances.

Mr Aubry was present in the House of Assembly yesterday to hear Mr Turnquest, who is also minister of finance, also promise that there would be extensive public consultation on the legislation before it went to Parliament.

“We expect the draft Fiscal Responsibility legislation will be consulted on and finalised before the next Budget year, when it is scheduled for implementation,” the Deputy Prime Minister said.

He added that both the International Monetary Fund (IMF) and Moody’s were in favour of such a move, which was perceived as the Government “taking charge of its fiscal house”.

“They see this move as key to the introduction of fiscal discipline,” Mr Turnquest added, “and securing improvements in the overall management of the public finances.”

He reiterated that an IMF technical team was helping to “design the policy and operational framework” for the Fiscal Responsibility legislation, with the Government seeking to balance ‘set-in-stone’ fiscal rules with the flexibility needed to respond to hurricanes.

A Fiscal Responsibility Act would force the Government to be more accountable and transparent in the management of the public finances, and require it to return to Parliament for approval to raise more money if it had to exceed the limits approved in the annual Budget.

‘Fiscal rules’, which set targets the Government cannot breach, such as maximum debt-to-GDP ratio, go a step further. The Minnis administration yesterday indicated it is thinking of taking this step via the inclusion of certain restrictions.

Promising that the inclusion of ‘fiscal rules’ would be given “due consideration”, Mr Turnquest said the draft legislation would seek to achieve a balanced GFS Budget annually. This would mean no new money being added to the $7.2 billion national debt, with any deficits caused solely through the repayment of debt principal.

The Deputy Prime Minister said there would be “limits” on government’s spending on civil service salaries, and associated benefits, and a “ceiling” on government subsidies to state-owned enterprises (SOEs) that this year are costing taxpayers $429 million.

He also took a swipe at the former Christie administration over its pre-election spending binge, saying the legislation will “prevent the abuse of the public purse that we saw before May 10, which was nothing more than serving partisan self-interest”.

Mr Aubry yesterday told Tribune Business he was “very optimistic” about the Deputy Prime Minister’s comments, and said ORG, its sub-committees and other civil society organisations were willing to assist the Government’s fiscal responsibility drive.

“In terms of the timeline we’d want it to be as soon as possible,” he said, “but the fact they [the Government] will be open to consultation is exciting, and it is more realistic that it lines up with the next Budget cycle.

“It’s worth it to take the time to do it right. We shouldn’t let up the pressure on it; it should be priority for all groups.”

Mr Aubry said the Fiscal Responsibility move was a key part of the Government’s consolidation programme, which ultimately involves eliminating the annual $300 million-plus fiscal deficits to put the national debt back on a more sustainable footing.

“The mechanism for public consultation remains to be seen,” he cautioned, “and we’re going to advocate that it’s as broad, comprehensive and inclusive as possible.

“Civil society groups will all make sure this thing gets the recognition in terms of how important this is.... From where we’re sitting, this (announcement) was a good indicator of being on the right path.”

Mr Turnquest, meanwhile, admitted it was “never an easy exercise” to cut government spending and implement austerity measures.

But he added: “To regain our credibility as a country, it’s essential to do what we say we’re going to do.”