House Begins Debate on Bill to Amend Public Debt Management Act

Photo: Donald De La Haye The House of Representative.

Story Highlights

  • Amendments are being made to the Public Debt Management Act (PDMA) to make certain provisions more consistent with international and local standards.
  • Minister of Finance and the Public Service, Hon. Audley Shaw, who piloted the Bill in the House of Representatives on Tuesday (May 2), said it has become necessary to effect changes to the Act in order to improve operational efficiency and effectiveness of debt management.
  • Subsections 1 and 2 of the Act are being amended to establish a body called the Public Debt Management Committee and also to detail its functions with respect to Medium-Term Public Debt Management Strategy.

Amendments are being made to the Public Debt Management Act (PDMA) to make certain provisions more consistent with international and local standards.

Minister of Finance and the Public Service, Hon. Audley Shaw, who piloted the Bill in the House of Representatives on Tuesday (May 2), said it has become necessary to effect changes to the Act in order to improve operational efficiency and effectiveness of debt management.

“The PDMA, while providing a framework for the overall management of the public debt, does not address the operational aspects of debt management. The proposed amendments will, therefore, seek to be more detailed, specific, and more flexible while still remaining consistent with the Act, thereby conferring better outcomes to the provisions of the Act,” he explained.

Mr. Shaw informed that the amendments will also provide guidelines regarding the main roles, functions, and responsibilities of the operational bodies governed under the Act, including the units of the Debt Management Branch.

Subsections 1 and 2 of the Act are being amended to establish a body called the Public Debt Management Committee and also to detail its functions with respect to Medium-Term Public Debt Management Strategy.

“An amendment is to be made to specify the frequency of the meetings of the Committee by including the words ‘which is to meet at least quarterly’ in Part II of the Second Schedule. Also, Sections 8 (c) and 8 (f) will be combined into one and include reference to the Annual Borrowing Plan,” Mr. Shaw explained.

The Finance Minister said there are no provisions in the PDMA for the assumption of the debt of public bodies by the Government, although it is called upon from time to time to take on the non-guaranteed debt of public bodies, due to various situations, including divestment and dissolution, among others.

He informed that in the absence of such provisions, the alternative is to assume the debt under Section 10 (f), which requires the approval of Parliament.

“Accordingly, it is necessary to amend the Act to specifically stipulate and establish the requirements and operations to be put in place in the event of the assumption of debt of public bodies. In this vein, Section 21 is to be repealed and replaced to reflect payment by the Government of non-guaranteed debt incurred by a public body,” Mr. Shaw pointed out.

Provisions are also being made for the creation of a new timetable for the tabling of the annual report.

Section 22 of the PDMA stipulates that an annual report on the management of the public debt during the preceding financial year is to be tabled in the House of Representatives, along with the financial statements and revenue estimates.

Amendments to the Financial Administration and Audit (FAA) Act in March 2014 adopted enhanced fiscal rules, which established a budget calendar to allow for passage of the Budget prior to the start of the fiscal year, effective fiscal year 2015/16.

“The PDMA details the information to be contained in the annual report, which includes end-of=fiscal-year information that would not be available prior to the end of the year. To this end, an amendment is being made to the Act to facilitate the tabling of the annual report after the end of the fiscal year,” the Finance Minister said.

The Bill also establishes the Debt Management Branch, which is charged with the management of the public-debt portfolio, including government loan guarantees and public-debt transactions; and the development, implementation, monitoring and review of the Medium-Term Public Debt Management Strategy.

Debate on the Bill will continue in the House of Representatives.

The PDMA was enacted on December 24, 2012 and came into operation in January 2013.

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