By NEIL HARTNELL
Tribune Business Editor
The deputy prime minister believes upcoming fiscal reforms will "take the mystery out of the public finances" and enable the Government to "attack the excesses" that have built a multi-billion national debt.
K Peter Turnquest told Tribune Business that the Public Debt Management Bill and Public Finance Management Bill, which are both out for consultation until mid-November 2020, as well as public procurement reforms already tabled in the House of Assembly, will provide the "rigour" and discipline needed to transform the Government's finances on to a more sustainable footing long-term.
With a national debt that is forecast to hit $10.4bn by end-June 2022, and this year's COVID-19 and Dorian-inflated $1.327bn fiscal deficit, Mr Turnquest said The Bahamas "just cannot continue doing what we've been doing in the past" by incurring nine-figure deficits on an annual basis.
Together with accrual-based accounting, which will provide a more accurate picture of the Government's financial position by incorporating future spending commitments, the deputy prime minister said all these reforms together with the Fiscal Responsibility Act will prevent any attempt to "manipulate" the public finances and "bring the system into the 21st century".
"Both of them are landmark pieces of legislation that are going to help us bring some rigour and structure around the debt," he told this newspaper in reference to the Public Debt Management Bill and Public Finance Management Bill.
"They will bring transparency and structure to what we do, which is what the Bahamian people have been asking for. From that perspective they are very important pieces of legislation, and demonstrate our commitment to transparency and fiscal matters. Together with the Fiscal Responsibility Act and procurement legislation we believe we're moving in the right direction."
Mr Turnquest branded the reforms as "taking the mystery out of the public finances", and added: "Where we are today we just cannot continue doing what we have been doing in the past. We need to bring the system into the 21st century with all the modernisation and access to data that Bahamian individuals and businesses need to have to make sensible decisions.
"I'm very pleased with what we have accomplished thus far, and things we have on the drawing board to complete before the Government's term is done. I believe these steps and efforts will endure to the Bahamian people's benefit well into the future.
"If we're diligent and follow through behind the legislation, what we really should end up with is more sustainable fiscal policy guidelines going forward, and that will help us to start attacking the major problem of this debt and remove some of the excesses we have seen over the years," the deputy prime minister continued.
"It fits nicely in terms of modernisation, accountability and transparency. No longer will people be able to push things off. You'd not be able to manipulate the system. Everything would be transparent and you'd have real time date to make decisions on."
Mr Turnquest told this newspaper that the Government was seeking to "ramp up" the transition from its current cash-based to accrual-based accounting, and "get the project completed" before it leaves office, noting that it was becoming "more and more critical" to tackle the sustained rise in the national debt.
"We're working on that assiduously to get that done," he added, "hopefully before we leave office but, if not, it will be so advanced it will be carried through."
The Public Finance Management Bill brings state-owned enterprises (SOEs) under its oversight, and will require individual ministries to prepare annual plans and reports, which must be tabled with the annual Budget, along with mid-year reports.
An Internal Audit Committee will be formally established, and the Ministry of Finance previously said the Bill - once passed by Parliament - will be implemented in a phased approach given the need to "build capacity" in the public sector.
The Public Debt Management Bill, meanwhile, will legally codify the requirement for the Government to prepare and implement a debt management plan, along with a borrowing strategy. It will also provide a framework for the establishment of sinking funds and their management.
Both Bills had considerable input from external sources. The Ministry of Finance confirmed that the Public Debt Management Bill was drafted by the Commonwealth Secretariat, with considerable input from local stakeholders, and was also reviewed by the International Monetary Fund (IMF) and its local affiliate, the Caribbean Regional Technical Assistance Centre (CARTAC).
The latter also engaged the person who prepared the Public Finance Management Bill's initial draft, with the legislation developed over an 18-month period. Both Bills underwent a review to ensure they aligned with the Fiscal Responsibility Act.
The Bills also attempt to more clearly define the roles and responsibilities of the minister of finance and his top officials, while also strengthening the sanctions regime for public officials found guilty of misconduct with taxpayer money.