Gov't gets green light to carry on expenditure

Gov't gets green light to carry on expenditure

Senior staff reporter

Thursday, May 28, 2020

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GOVERNMENT and the Opposition butted heads in the House of Representatives yesterday over changes to the Financial Audit and Administration (FAA ) Act as the Opposition insisted that proper procedure was not being followed and that it needed time to examine the Bill.

However, after a lengthy debate, the Bill was passed without amendment.

Finance Minister Dr Nigel Clarke explained that the FAA Bill urgently needed passage in order to provide legal protection for the Government's expenditure during the novel coronavirus pandemic. He outlined that the process which has to be followed to take the order for suspension to the House could take up to two weeks and to add another week to allow the Opposition to have its own deliberations would cause further delay.

“Delaying this by a further week would mean the supplementary estimates aren't passed until the middle of June, and that's not something we can accept under the circumstances when the need is so great and where the health expenditure requirements are so enormous. We have to be in a position when the resources are available to meet the needs of the people, and that's why we have to pass it today. If it isn't passed today, the $6 billion in health expenditure and $17 billion in social an economic support will be delayed,” he told the House.

The Bill seeks to move the date by which Jamaica attains the legislated 60 per cent debt to gross domestic product (GDP) target by 2025/26, by two years and provides the avenue through which suspension of this fiscal rule can be achieved.

When the first supplementary estimates for the 2020/21 financial year went before the Public Administration and Appropriations Committee (PAAC) last week, the committee agreed not to give its stamp of approval until legal consultation had been sought by the finance ministry.

Members argued that the supplementary budget was so extensive that it breached the fiscal rule and should await examination by the auditor general before it could receive the nod of the PAAC. The GDP target ratio of 60 per cent by 2025/26 is provided for in the FAA Act of 2014. The law provides for the suspension of compliance under specified circumstances, such as a state of public disaster, a public emergency, or financial sector crisis.

Yesterday, when Finance Minister Dr Clarke sought to open the debate, Opposition Leader Dr Peter Phillips reiterated that the need for a suspension was not in question, but proper procedure must be followed.

“It may be short legislation, but that doesn't mean that it doesn't have profound implications, and we have to determine, as a House, whether this is the best way to proceed. It cannot be that everybody, including the financial sector, could've been of the view that we need to protect the country against a build-up of debt, a whimsical change in our position of debt, for a minister of finance to just come and change it, because he says so. Then what security does any holder of Government of Jamaica paper have? What expectation could anyone have as to the seriousness of the Jamaican authorities about not building up debt again? Is this the best way? We haven't had a chance to look at it, we deserve to look at it, that's the role of a Parliament,” Dr Phillips insisted.

At the same time, St Andrew Southern Member of Parliament and PAAC Chairman Mark Golding argued that the Government was seeking to use the FAA Bill to circumvent the constitutional requirement for suspension of the fiscal rules. He said the FAA Bill had been hastily crafted within days and without the Opposition having the opportunity to properly scrutinise the provisions.

He argued that the proper legal framework should be made for addressing the COVID-19 crisis by a declaration of a public emergency under the constitution, which would require parliamentary endorsement. “That was deliberately framed in the fiscal responsibility framework to ensure that there are proper checks and balances in any attempt to suspend or otherwise abrogate the fiscal rules. Here we are today where he [minister] is amending the FAA Act to circumvent the constitutional route for suspension through a state of public disaster, which is what we are in with this pandemic, but we have not acknowledged it legally through the constitution. What we have done is rely on legislation which was passed after the charter of rights,” he said.

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