The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Governance reformers yesterday expressed concerns that revisions to the Fiscal Responsibility Bill could weaken efforts to hold the Government accountable for breaching financial targets.

The Organisation for Responsible Governance (ORG), which has led the campaign for the bill's passage into law, last night said it was "particularly concerned" that the Public Accounts Committee (PAC) is no longer the body responsible for this task.

Matt Aubry, ORG's executive director, told Tribune Business that the parliamentary Standing Committee now entrusted with this task needed to be constructed along similar lines to the PAC, with an Opposition majority required to ensure the necessary "checks and balances" on the Government.

He and ORG also expressed concern that their calls for the bill to have more enforcement teeth, with greater sanctions and penalties needed to deter the missing of fiscal targets and breaching the law's provisions.

"Given The Bahamas' poor history of compliance with similar reporting laws, such as public disclosure, ORG continues to express concern that without methods of enforcement there is a risk that the Fiscal Responsibility Bill could ultimately be ineffective despite its thorough reporting mandates and methodically outlined goals," the group said.

"ORG holds that measures in the tabled legislation don't sufficiently discourage breaches of Fiscal Responsibility, rectify errant behavior and encourage compliance."

Nevertheless, Mr Aubry said a Ministry of Finance memorandum issued on September 24 detailed 13 "meaningful adjustments" to the Bill as a result of recommendations from the Central Bank, Bahamas Chamber of Commerce and ORG prior to its debate in the House of Assembly yesterday.

He added that the Ministry also provided a "rationale and explanation" for accepting or rejecting recommended changes, leading ORG to describe the process as "a benchmark for the future" in terms of public consultation on key legislative initiatives.

Turning to the differences between the initial draft and final version of the Bill tabled in Parliament, Mr Aubry told Tribune Business: "What was notable was the elimination of the role of the PAC.

"The PAC was to act if there was a breach or change considered to anything. It now has to come before the full Parliament, not the PAC. The challenge with that is you have the majority of MPs attached to the Cabinet or governing party. It doesn't really provide the appropriate level of checks and balances."

The Ministry of Finance and the Attorney General's Office, in their September 24 response, said the change was made because this was not considered to be the PAC's role. Instead, they suggested a Standing Committee could be appointed by Parliament to fulfill this role.

"It would need to pretty much mirror what the PAC looks like so the Opposition has a majority," Mr Aubry told Tribune Business of the standing committee's membership, "and so there's a counterpoint if there's a breach. There'd be a proper level of oversight."

ORG, in its statement, said: "ORG notes the removal of the Public Accounts Committee (PAC) in favour of Parliament as a measure of accountability. This is particularly concerning, given the current composition of Parliament has a majority of members holding Cabinet positions and thus are bound by mandatory cabinet allegiance.

"We take note of the recommendation within the Ministry of Finance response memo of September 24 that a Standing Committee could serve a similar function as the PAC, and urge that the formation of this committee be established as a priority and that the composition of any such body be similar to that of the PAC to mitigate political/partisan influence."

ORG also added that it was "disappointed to see" that the final version of the Fiscal Responsibility Bill allows the Prime Minister, after consultation with the Opposition's leader, to determine who chairs the Fiscal Responsibility Council. This body will act as an advisor to the Government, and earlier versions of the Bill had allowed its members to elect the chairman.

"This can be easily interpreted as a political appointment and represents a step away from the spirit and intent of the Council. ORG appeals with the Government to reconsider this structure," the group said.

Addressing other concerns, ORG said it "questions the removal of language stating that 'the pre-election Economic and Fiscal Update should not receive prior approval of or notice to the Cabinet', as this eliminates one of the elements that ensures the pre-election report remains free from political influence (or the perception thereof).

"Additionally, the shift of the responsibility of the pre-election report from the financial secretary to the minister, who is required to report and align with Cabinet, would seem to take away an additional check toward objectivity. ORG calls for reconsideration on these points," it added.

Still, ORG recognised the more "proactive" role granted to the Fiscal Responsibility Council and other related reforms, saying: "These protocols clearly recognise the importance of maintaining the independence of this body to make critical and objective assessments of the Government performance against the Fiscal Responsibility Bill."