Cabinet Approves Establishment of Independent Fiscal Council

Photo: Donald De La Haye Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke (centre), is congratulated by Deputy President of the Senate, Aubyn Hill (left), after delivering a special presentation on ‘Enhancing Fiscal Responsibility: Next Steps’, at The Jamaica Pegasus hotel on Thursday (May 10). At right is Minister without Portfolio in the Ministry of Finance and the Public Service, Hon. Fayval Williams.

Story Highlights

  • Cabinet has approved the establishment of an independent fiscal council as part of measures to strengthen Jamaica’s Fiscal Responsibility Framework.
  • The move is consistent with plans by the Government to secure Jamaica’s gains under successive economic reform programmes with the International Monetary Fund and build on the success of domestic partnership initiatives.
  • Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, said the Government has procured the services of experienced international experts who can help to develop the council’s design.

Cabinet has approved the establishment of an independent fiscal council as part of measures to strengthen Jamaica’s Fiscal Responsibility Framework.

The move is consistent with plans by the Government to secure Jamaica’s gains under successive economic reform programmes with the International Monetary Fund and build on the success of domestic partnership initiatives.

Fiscal councils are permanent, independent, non-partisan institutions that are created by legislation and staffed by competent, experienced and technically proficient persons who help to promote economically sustainable fiscal policies across political cycles.

Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, said the Government has procured the services of experienced international experts who can help to develop the council’s design.

The Minister was making a special presentation on ‘Enhancing Fiscal Responsibility: Next Steps’, at The Jamaica Pegasus hotel on Thursday (May 10).

Dr. Clarke said the establishment of a fiscal council, which can be constructed as an enhancement of the partnership models that Jamaica has benefited from, offers several advantages.

“Fiscal councils foster greater transparency around fiscal policy by having legislated access to economic data, having sufficient analytical capacity and by providing unbiased information to the public,” he explained.

The Minister argued that it will deepen democratic accountability, as policymakers have to maintain credible policies or explain what might appear to be deviations, adding that it will alter the disincentive structure in the political economy by raising the cost of unsound policies or policy proposals.

“In order to preserve… credibility, they have to be non-partisan in all of their activities; they (must) not engage in mission creep (gradual shift in objectives), and understand that fiscal councils are not policymakers and shouldn’t try to be. Fiscal councils only offer a second opinion,” Dr. Clarke noted.

The Finance Minister said the focus of the council in Jamaica will be guided by the availability of resources.

“The principal objective of an independent fiscal institution in Jamaica would be the guardian, interpreter and arbiter of Jamaica’s fiscal rules. A Jamaican fiscal council could monitor the compliance with the [fiscal responsibility] rules and keep the public informed on economic matters according to a scheduled timetable,” he noted.

Dr. Clarke added that the Government will be undertaking a consultative approach to the design of the fiscal council involving all stakeholders, including unions and their members, the private sector, financial sector, civil society, youth, academia, and the Opposition.

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