The Tribune

Like democratic elections and freedom of information, fiscal responsibility is central to good governance and to any nation’s sustainability. Not only does fiscal responsibility reflect a commitment by a government to do what it asks its citizens to do – budget wisely and be prepared to be held accountable if it does not, it positions that government to maintain or move toward macro-economic stability.

Absent such legislation, it is up to governments to spend as they wish, whether capriciously or with deliberation. Without such legislation, it is up to citizens to hold governments accountable for what they believe government should have done with the people’s money by re-electing or rejecting them at the next opportunity. That is precisely what the Bahamian public did. Without formal parameters for spending and without any signs of economic growth that would in part or spirit justify extraordinary spending and borrowing leaving the country with a 57 percent debt to GDP ratio, the former administration was deemed reckless with the public purse and resoundingly tossed out of office, retaining only four of 39 seats in the House of Assembly as of the May 10, 2017, election.

The former government did not violate the law in its spending, it violated the people’s trust and expectations.

So the introduction after all these years of a Fiscal Responsibility Bill is a welcome move and the Minnis administration and, in particular, the Ministry of Finance and Office of the Attorney General, are to be commended for the work that went into it. However, the Fiscal Responsibility Bill 2018 as it stands now lacks three critical components.

Firstly, it does not give specific clear deadlines that spell out when the budget would have to meet a specified goal in debt to GDP ratio while giving the Minister sweeping powers as seen as “necessary and expedient” to carry out the intent of the law.

Secondly, it does not specify how the Act is to be enforced or what penalties would apply to failure to meet obligations.

Thirdly, while creating a Fiscal Council, it does not include terms of reference indicating whether the Council would have a strong role and be an integral part of compliance.

In some ways, the very thorough bill - which we reiterate reflects a tremendous amount of work on the part of the Attorney-General’s office and staff in much of its writing - could result in a valiant attempt that nets little more than putting the wolf in charge of guarding the chicken coop.

The Organisation for Responsible Governance (ORG) has posted a thorough review of the Bill on its website and we encourage those who appreciate the seriousness of fiscal responsibility to take a good look at it.

ORG’s report follows consultation with nearly two dozen civil society groups. It compares the pending legislation with similar acts in other countries and to international standards. “The Bahamas Bill is reflective of many recognised pieces of legislation, including New Zealand and Australia which are considered (international) standards in the space,” ORG’s report says. It goes on to note that several countries - Argentina, Brazil, Colombia, India and Peru among them - grappled with some of the same issues that the current Bill falls short on, including specified penalties and the independence of the oversight board, in The Bahamas’ case, the Fiscal Council, but resolved those issues.

ORG’s greatest concern is the lack of specified or codified penalties coupled with sweeping Ministerial powers. “Throughout the Bill, there is a noticeable lack of reference to penalties or incentives to encourage compliance and rectify behaviour in the implementation of fiscal responsibility and discipline processes. Where there is mention of penalties, said penalties are not defined or codified and are left to Ministerial discretion, allowing room for uneven or unfair application or the perception thereof,” the report states.

We would hope a government swept into power on the basis of promises of transparency, openness, commitment to public consultation and fiscal responsibility would realize what the combination of sweeping Ministerial powers and lack of specific penalties for misconduct would look like to the electorate who hoped for better than before.

This was supposed to be the People’s Time. That means government is held to the same standards which it expects of its responsible citizenry, to watch its pocketbook and pay the price if it does not. This is not government’s money. It is the People’s Money.

And while fiscal responsibility legislation may not be sexy or glamorous, it is a crucial ingredient in a recipe for a new governance culture. Weak fiscal responsibility legislation is like trying to bake a cake without turning on the oven. Flat, cold and the promise of something good that never materialised.