Legislation aimed at improving the management of public debt was passed on November 30 in the Senate.
The Public Debt Management Act will repeal the Loan Act of 1964 and several enactments related to the raising of loans by the Government.
Minister of Justice, Senator the Hon. Mark Golding, who opened the debate, explained that while the existing legislative framework establishes some of the basic principles governing public debt, it does not include a comprehensive regime of public debt management based on modern best practices.
“It is therefore intended to introduce a single law that will, among other things, set out clear objectives for the management of public debt; mandate the preparation of a public debt management strategy (to be presented annually to Parliament); prescribe a framework within which decision making will be made on the management of public debt; and establish accountability and reporting requirements,” Senator Golding said.
He said that under the Act, there will be no set debt ceiling; instead, provisions will be made for loan ceilings to be prescribed from time to time by Ministerial Order subject to affirmative resolution of the House of Representatives.
“In prescribing the loan ceiling, the Minister of Finance will have to take account of and act in a manner that is consistent with the level of total debt specified in the fiscal responsibility framework,” he informed.
The legislation also requires that a high level public debt management committee be established with a view to ensuring coherence among fiscal, monetary and debt policies.
Senator Imani Duncan Pryce noted that the Bill brings to life, the fiscal responsibility framework that was passed a few years ago.
“Too often, in the past, we find things off the balance sheet not reported and unknown to the people of Jamaica. What this particular Act does is give the Jamaican people the confidence that this Government is committed in taking bold steps in accountability and transparency for the betterment of Jamaica,” she stated.
Leader of Opposition Business in the Senate, Senator Arthur Williams, while stating that the legislation was a “long time in coming,” pointed to the need to have the accompanying regulations in place to govern the various aspects of the Act.
“I am concerned that we have now come to actually introducing this important piece of legislation without any of the regulations that will make it effective and give it teeth,” Senator Williams said.
In his response, Senator Golding said it is standard practice in modern legislation to create flexibility by empowering the Minister to make regulations on a variety of issues, which may arise.
“Very often, under those enactments, regulations are never made or are made only to cover one or two aspects of the long list of things by which the power to make regulations exist. Regulations are made where they are necessary to operationalize the legislation,” Senator Golding said.
He noted that in the case of this particular Act, 90 per cent of the important provisions do not require any regulations “to become meaningful, impactful and operational the day it comes into effect."
The Bill was approved without any amendments. It was passed in the House of Representatives on November 20.