ORG wants swift action on FRB
(July 12,2018) NASSAU,BAHAMAS -The Organization for Responsible Governance (ORG) wants to see the Fiscal Responsibility Bill tabled and debated before government goes on its usual summer hiatus.
ORG said in a press release issued yesterday that government must treat the bill the same way it treated the implementation of the 4.5 percent increase in value-added tax and move the highly touted bill through Parliament as quickly as possible.
“The implementation of the Fiscal Responsibility Bill should be treated with at least the same level of urgency as the short-notice imposition of the VAT increase,” said ORG.
ORG Executive Director Matt Aubry said in the release that Minister of Finance Peter Turnquest committed to putting fiscal rules in place ahead of the 2018/2019 budget. But the budget was passed while the Fiscal Responsibility Bill has been out for consultation.
“Last year, Minister Turnquest committed to implementing ‘fiscal rules’ ahead of the 2018/2019 budget cycle to address issues of expenditure and financial management, and to bridge the trust gap between the people and their government,” said Aubry.
“We applaud that a Fiscal Responsibility Bill was introduced in May of this year and that time was allotted for review and feedback from the private sector, civil society and the people. However, in keeping with the spirit of the minister’s intentions to usher in a new era of fiscal discipline and accountability with the new budget, we hope to see the revised legislation tabled and debated in the House of Assembly in the coming weeks.”
The government released its Fiscal Responsibility Bill in mid-May, which sets policy that will seek to constrain government’s fiscal processes and keep the country on a medium-term trajectory toward economic growth, while creating a culture of transparency and responsibility with regard to public funds. When implemented, the bill will require government to reduce its debt to gross domestic product (GDP) ratio to 50 percent of GDP over time.
Besides lowering the debt to GDP level, the law when implemented will require the government to lower the fiscal deficit of 5.8 percent of GDP to no more than 0.5 percent within three years.
Government will also be required to keep its comparative year-on-year current expenditure at or below three percent.
Aubry said the implementation of the Fiscal Responsibility Bill is even more urgent now that the “hardship” of the value-added tax increase has been placed on Bahamians.
“As the budget has, on relatively short notice, required a sacrifice from the Bahamian people in the way of higher taxes, it is only fair that the government match it with equal priority and swiftness in the implementation of a Fiscal Responsibility Bill to ensure the sound governance of this additional revenue,” said Aubry.
The ORG release added that the group hopes the new draft of the bill will “include a codified system of penalties and/or incentives to rectify poor fiscal behavior and encourage better financial management”.
“We are hoping to see in the new legislation that civil society feedback has been thoughtfully considered and incorporated, particularly ORG’s suggestions to strengthen the bill through the development of penalties and the reinforcement of the fiscal council,” the release stated.
“ORG’s analysis of the bill collected feedback from ORG expert committees, members, civil society partners and members of the public and expresses the anxiety that many feel that the bill, if left without punitive measures, may end up unenforced like the Public Disclosure Act and other similar legislation.”
ORG also continues to call for the implementation of the Freedom of Information Act (FOIA).
“We had once hoped that this would be the last budget where Bahamians would not be able to request information using FOIA,” Aubry said.
“We can safely assume now that this will not be the case, given that the bill is still not fully enacted and implementation timelines in other jurisdictions have often ranged between a year and a half and three years.
“However, we remain encouraged by the $1 million allotted for FOIA in the 2018/19 budget and will be watching closely to track development on this important legislation. We appreciate that the attorney general has stated publicly that this is a priority, and encouraged continued collaboration with civil society and private industry to ensure this fundamental right.”