Loans Act Amended to Increase Ceiling on Borrowing

The House of Representatives yesterday (March 2) approved a Bill to amend the Loan Act of 1964 to increase the government’s borrowing ceiling from $400 billion to $650 billion.
Piloting the Bill, State Minister for Finance and Planning, Fitz Jackson, explained that this adjustment would allow the government to finance its operations throughout the financial year. The Act provides for this amount to be borrowed in one single total or to be done in installments.
Pointing out that the Act represented only one of 13 Loan Acts which governed the various loans that were taken on by the government of Jamaica from time to time, Opposition Spokesman on Finance, Audley Shaw pointed out that the ceiling only related to a part of the stock of public debt and asked Finance and Planning Minister, Dr. Omar Davies to indicate what the stock of debt was that was owed by the government in respect of each of these loan acts. Dr. Davies promised to at a later date, provide information on the present disaggregation of these debts.
In response to Member of Parliament for North Eastern St. Andrew, Delroy Chuck’s queries as to whether the new Bill was a ratification of a ceiling that was already being used, Dr. Davies pointed out that Jamaica was not above the ceiling in regards to the Loans Act but was in fact, just below. He explained that the current $690 billion stock of debt included debts incurred as part of other Loan Acts.
Further fielding questions from the Opposition as to the continued increase in the borrowing ceiling, Dr. Davies said that the public debt should not be singled out, but that its ratio to Gross Domestic Product (GDP) should also be taken into account.”We all share the desire to reduce the debt to GDP ratio. The nominal debt, in nominal dollars will never be reduced. The critical indicator that we must keep track of is the debt to present, 143 per cent is too high and our objective is to reduce that,” the Finance Minister stated.
The other pieces of legislation that govern multi-lateral loans among other instruments include: the Loans Additional Powers Act; the Loans Canada, United States of America and other Specified Countries Act; the Loans Caribbean Development Bank Act; the Loans Equity Investment Bonds Act; the Loans Local Authority Act; the Loans Inter American Development Bank Act; the Local Temporary Borrowings Act; the Loans National Development Bonds Act; the Loans National Savings Bond Act; the Loans OPEC Special Fund Act; the Loans Overseas Temporary Borrowings Act; Loans to Small Businesses Act; and the Loans World Bank Act.
Meanwhile, amendments to the Customs Act were also approved to provide for an increase in the various fines and penalties to more realistic levels. The provisions will also empower the Minister by order subject to affirmative resolution of the House of Representatives to amend or vary any penalty or fine under the Act.

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