JIS News

As part of its management of public expenditure, the Government will enact legislation, before the end of 2010/11, to put in place a fiscal responsibility framework.
This as it anticipates final approval from the IMF executive Board for a standby loan facility of US$1.25 billion this month.
In a presentation in the House of Representatives on Tuesday (January 19), Minister of Finance and the Public Service, Hon. Audley Shaw, said the legislation, which will give way to the Fiscal Responsibility Framework (FRF), is part of the objective of the fiscal consolidation strategy which is focussed on streamlining expenditure and reforming the public sector.
Fiscal consolidation is one of the three pillars that are fundamental to the Government’s economic pogramme, Mr. Shaw said.
“The overall objective is to operationalise the key principles of prudent fiscal management, in order to ensure that the institutional framework is consistent with achieving the Government’s short-and medium-term fiscal targets,” he pointed out.
The FRF will, therefore, provide for clearly articulated fiscal policies, including medium-term fiscal framework; greater transparency through various reporting requirements; more stringent accountability in the management of public funds; and better oversight of fiscal policy and the management of such funds.
“The FRF will provide for improved public financial management, through expanding the coverage of the budget to all general Government institutions, enshrining the principle of no spending without prior budget appropriation; and requiring approval by Parliament of the budget of each of the self-financed public bodies,” he explained.
The legislation committee has considered two bills: the Financial Administration and Audit (Amendment) Act; and the Public Bodies Management and Accountability (Amendment) Act, 2010.
These Acts seek to establish the legal framework for the FRF, and to empower the Minister to improve the management of public finances by addressing current weaknesses in the fiscal policy and administrative systems in the country.
The law will provide for specific principles of fiscal management and the fiscal targets to be achieved in the medium term; the annual tabling of a fiscal policy paper with the national budget, as well as the presentation of an accompanying debt management strategy; fiscal discipline in budget preparation and execution; prior approval from the Minister for borrowing by public bodies; and independent assessment by the Auditor General on the Government’s adherence to the principles of fiscal prudence.

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