After months of consultation debate yesterday opened on the Fiscal Responsibility Bill with the government announcing new rules.
The proposed legislation essentially sets guiding principles and rules for how a government spends and accounts for taxpayer’s money.
The Minnis administration is seeking to ensure it meets fiscal gains set out in its budget.
It calls for lowering the deficit and maintaining a sustainable fiscal balance, lowering debt to sustainable long term levels and maintaining current expenditure growth.
“The Fiscal Responsibility Bill strives to provide a strong, depoliticized institutional framework for fiscal policy—so as to ensure that no future Government ever again engages in flagrantly irresponsible fiscal policies that could once more threaten the future prosperity of our nation,” said Minister of Finance, K. Peter Turnquest.
“To this end, the proposed Fiscal Responsibility legislation contains legally binding fiscal rules that places limits on the annual fiscal balance and the debt-to-GDP ratio,” he added.
The government has made little secret of what it met on the books upon taking office last May, a situation the Deputy Prime Minister and Minister of Finance, said cannot be repeated.
The bill introduces the special reporting requirements of a pre-election economic and fiscal update.
“The Minister of Finance must, no earlier than 30 working days nor later than 20 working days before polling day, arrange for such an update to be published on an official website of the Government,” he said.
“The Minister is also obliged to ensure that the Update is a technical and objective document.
“So there should be no more surprises to governments coming in to power or succeeding another government.”
Once passed, the bill takes effect this Monday, October 1, 2018.
However,The Fiscal Responsibility Council will not come into force until July 1, 2019.
That council will be a five-member team appointed by the Governor General on the advice of the Speaker of the House of Assembly.
One member will be nominated by the Bar Association, another from the Chamber of Commerce, the University of the Bahamas, the Bahamas Institute of Chartered Accountants and the Certified Financial Analysts Society.
From that body, one person will be appointed chair.
The Minister however stressed that despite its provisions, in order for the legislation to truly be effective, public participation and vigilance is important.
“You must do your part to hold us, the current government accountable to the provisions of it.
“But you must also ensure that any successive governments whether it be the Free National Movement, the PLP or any other party, that you hold the next government accountable to these legislations so that they do not attempt to change it,” said Mr. Turnquest.
The opposition’s spokesman on finance, the MP for Exuma and Ragged Island, Chester Cooper, argued that many in civil society still have concerns.
While he supports the potential the legislation has upon and to bring some benefits to Bahamians, the bill he said, talks about doing many things without consequences for doing so.
“In the current fiscal environment, the legislation represents a potential serious threat to the economic stability potentially, of The Bahamas fiscal model, in my view,” he said.
“Now what do I mean by that? The Government, through its recent increase in the rate of VAT has taken a potentially great fiscal risk, in that it may or not collect what it believes it will. I say they won’t.
“We asked for the modelling, which was never forthcoming.”
