JIS News

Senate yesterday (March 18) passed amendments to the Domestic Loans Act, which will provide for an increase in the Government borrowing ceiling from $400 billion to $600 billion in order to finance expenditure programmes in the medium term.
The Act provides for this amount to be borrowed in one single total or in installments and gives the Finance and Planning Minister authority to raise loans up to the level of $650 billion.
Piloting the Bill, Leader of Government Business in the Senate and Information Minister, Senator Burchell Whiteman, said that in addition to facilitating borrowing, the ceiling was raised to allow central Government to assume the contingent liabilities relating to a number of agencies and occurrences.
The agencies include the National Water Commission, the Sugar Company of Jamaica and the Jamaica Urban Transit Company. The funds will also be expended on the issuance of debt securities to the Bank of Jamaica for FINSAC related obligations.
Senator Whiteman explained that the stock of debt may be higher than the new ceiling, and legally so, because the ceiling referred to what was allowable for borrowing purposes, but by virtue of the change in exchange and interest rates, the stock of debt could in fact be higher than the ceiling.
Opposition Senator Bruce Golding argued that the borrowing ceiling had been increased significantly over the years and that there needed to be some restraint on Government’s ability to borrow.
Senator Golding used the opportunity to reiterate that the Opposition was committed to an independent central bank with a clear charter in terms of what its responsibilities were and the tenure of governors; was subject to accountability in terms of reporting to Parliament; and subject to impeachment provisions in terms of discharging its obligations under the law.
“Debt is not something on which you structure your total economy, but debt has been an instrument in many developing countries and indeed in developed countries for growth and development,” Senator Whiteman stated.
“In Jamaica, you can point to a great deal of what debt has purchased and provided by way of infrastructure and facilities on which you can construct a platform for growth,” he stated.

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