Drafting Instructions Prepared For Fiscal Council

Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says drafting instructions are being prepared for issue to the Chief Parliamentary Counsel (CPC) to facilitate the establishment of the proposed Fiscal Council.

“I have given a public commitment to table a draft of the legislation that will give rise to a Fiscal Council, by April 2020,” the Minister said.

He was speaking at a media round table at the Ministry’s National Heroes Circle offices in Kingston on Friday (September 20).

Dr. Clarke reiterated that the Council will be the final arbiter of Jamaica’s Fiscal Rules that stipulate, among other things, a debt-reduction target of 60 per cent of gross domestic product (GDP) by financial year 2025/26.

The rules, he said, also prescribe the fiscal balance that Jamaica needs to maintain in order to achieve that target.

Dr. Clarke explained that the Council will make independent commentary on the Fiscal Policy Paper, laid in Parliament simultaneously with the Budget, which outlines a medium-term profile and projections.

Additionally, he said the Council will comment, independently, on the interim Fiscal Policy that is laid in the House in September each year, and will have access, via legislation, to data from the Ministry and other government agencies.

The Minister advised that the Council will be required to make periodic statements publicly about Jamaica’s fiscal trajectory and whether government policies are broadly consistent with those objectives.

“What the Council will be concerned with is the envelope of expenditure and whether that broad envelope is consistent with the objective of long-term debt sustainability, over time,” Dr. Clarke noted.

He added that the Council’s establishment “will promote fiscal transparency and lead to greater incentives for a government pursuing polices that are fiscally credible and greater disincentives for governments doing things that are not”.

Dr. Clarke pointed out that the pathway to the Council’s establishment has, to date, entailed consultations with a wide cross section of local and international stakeholders, including members of the public.

Additionally, with the assistance of the Inter-American Development Bank (IDB) and European Union (EU), a consultancy firm led by the former head of the Independent Fiscal Institution in Canada was engaged.

The Ministry also sought and received detailed technical advice from the International Monetary Fund (IMF), through its Fiscal Affairs Department.

“In addition, we benefited from a comparative analysis of what occurs in other countries,” the Minister added.