Our nation's debt-to-GDP ratio and annual fiscal deficits are at a dangerous precipice, jeopardizing The Bahamas' economic future. Faced with successive downgrades of The Bahamas' international credit ratings, ORG has advocated over the past two years for clear measures to be taken to curb debt and institute greater transparency in government expenditures and reporting. A Fiscal Responsibility Act that among other things would provide limits to capital and recurrent expenditure relative to Gross Domestic Product (GDP), require comprehensive reporting of projected costs and benefits of planned programs, require a balanced budget and mandate reductions in the national debt.
After relentless advocacy over two government administrations, ORG welcomes the Ministry of Finance's release of the Fiscal Responsibility Bill, 2018 - a bill to address government spending and debt and to improve fiscal transparency.
The Fiscal Responsibility Bill, 2018 has the potential to create greater accountability and responsibility in our national finances. It can be an excellent tool for us to better manage our national spending and focus on strategy for economic growth. It is important that the government receives broad feedback on this bill to ensure that they get it right.
In May 2018, ORG conducted a public consultation to collect your thoughts, recommendations and suggested amendments to the Fiscal Responsibility Bill to ensure the bill has teeth and is as effective as it can be. These suggestions were consolidated, analyzed, and submitted to the Ministry of Finance on May 21st.
Download and view the bill and it's companion documents here:
The Fiscal Responsibility Bill 2018 will establish an independent Fiscal Council to act as a watchdog against fiscal malfeasance and will set guidelines and fiscal rules to curb spending, reduce debt, and increase fiscal transparency.
As you review, here are some helpful links to resources that might provide some background on the bill and Fiscal Responsibility Legislation in The Caribbean:
Rules Based Fiscal Responsibility Frameworks for the Caribbean Region
Inter American Development Bank Regional Policy Dialogue 2017
Fiscal Rules: Towards a New Paradigm for Fiscal Sustainability in Small States
Inter American Development Bank Working Paper Series 2017
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