Finance Minister Bats for Fiscal Prudence


Sanctions should be imposed for deliberate breaches of fiscal responsibility resulting from ministerial action.

Minister of Finance, Planning and the Public Service, Dr. the Hon. Peter Phillips, made the call during his first major presentation since being appointed to the ministry in the new administration. 

Addressing investors at the Mayberry Investment Forum in Kingston on Wednesday (January 18), the Minister said that, despite the existence of a Fiscal Responsibility Framework “entrenched in law” to safeguard fiscal prudence, significant fiscal breaches have occurred.

Pointing to expenditure controls, the Minister stated that there has been a lack of fiscal prudence as evident in: the mismanagement of contract negotiations with public sector workers; massive off-budget expenditures; and the failure to effect the timely implementation of public sector, tax and pension reforms.

He cautioned that the country now risks squandering the relief provided by the Jamaica Debt Exchange (JDX).

“Without wishing to get into a futile blame game, we must acknowledge that there has been a failure to adequately manage the fiscal situation and to contain expenditure in the face of declining revenues. We must draw the line and say no to this type of behaviour,” he declared.

With respect to the Jamaica Development Infrastructure Project (JDIP), he said that the amount earmarked to be spent in the 2011/12 budget “was deliberately ignored and was over-shot by US$80 million or close to J$7 billion."

The Minister also observed that more debts were accumulated by the former Government, through the ordering of some 96 million Euros worth of buses that were not budgeted for, but which will have to be paid for.

“This financial profligacy took place despite the existence of a Fiscal Responsibility Framework entrenched in law that prohibits such actions,” Dr. Phillips observed.

“This fact speaks to the need for sanctions for such deliberate breaches flowing from Ministerial action. It was these breaches that contributed to the breakdown of trust between Jamaica and our international partners over the last year,” he stated.

 

By Allan Brooks, JIS Senior Reporter

JIS Social