- The House of Representatives on Tuesday, March 18, passed the fiscal rule legislation, which is to be enacted by the end of this month.
- The fiscal rules will seek to bolster transparency within the economy and ensure a sustainable budget.
- It will also mean that Parliament will have a greater responsibility in the management of the country’s economic affairs.
The House of Representatives on Tuesday, March 18, passed the fiscal rule legislation, which is to be enacted by the end of this month.
The fiscal rules will seek to bolster transparency within the economy and ensure a sustainable budget.
It will also mean that Parliament will have a greater responsibility in the management of the country’s economic affairs.
The Bills, the Public Bodies Management and Accountability (Amendment) Act, 2014 and the Financial Administration and Audit (Amendment) Act, were passed with four amendments.
Opening the debate on the legislation, Minister of Finance and Planning, Dr. the Hon. Peter Phillips said the legislation is being put in place in light of the high debt and low level of growth that the country is experiencing.
“The international community…the financial markets, the multi-lateral agencies, private and official lenders… are not convinced that we, collectively, have the fiscal discipline to prevent the future run-up of our debt. We need to prove them wrong,” the Finance Minister said.
He added that the administration of the fiscal rules will “test the capacity and the maturity of the Parliament as a whole.”
The Public Bodies Management and Accountability (Amendment) Act, was amended to strengthen the fiscal rules governing investment activities of public bodies.
The Bill states that investment by public bodies is to take place within the framework of a public investment management system, which is being established under an amendment to the Financial Administration and Audit Act, a companion measure to the Bill.
The Financial Administration and Audit (Amendment) Act provides for an escape clause to be effected with parliamentary approval, allowing for the suspension of fiscal rules for a specified period upon the occurrence of major adverse shocks, such as natural disasters, severe economic contraction, public emergency, or a financial sector crisis.
Opposition Member of Parliament for North Central St. Andrew, Karl Samuda raised concerns that the Bills do not propose sanctions for breaches of the fiscal rules.
In response, Dr. Phillips said the accompanying regulations which are to come early in the next fiscal year, will set out the specific sanctions for non performance of specific tasks.
The Government of Jamaica developed and submitted to the International Monetary Fund (IMF) in August 2013, a conceptual framework for the design of legally binding fiscal rules.
The framework aims to limit the annual fiscal deficit of the public sector (covering all fiscal activities), to achieve a reduction in public debt to no more than 60 per cent of Gross Domestic Product (GDP) by 2025.