The Deputy Prime Minister and Minister of Finance the Hon. K. Peter Turnquest said the Cabinet of The Bahamas last week approved the Fiscal Responsibility Bill, 2018 for public consultation. “Today, we present that Bill to the Bahamian people. The Bill sets guiding principles and rules for the way the government spends and accounts for the people’s money,” DPM Turnquest said at a press conference at the Ministry of Finance, Monday, May 14, 2018. “Instead of relying on the government to exercise fiscal discipline by choice, the new legislation constrains spending by the force of law. “It is a forward-looking bill intended to reshape the culture of public accountability. Doing so with legislation means it will commit all future governments and not just this administration. This is a built-in safeguard to ensure continuity, sustainability, and commitment to fiscal discipline.”
DPM Turnquest said he could not emphasize enough the importance of the legislation. “Once passed, it will subject this Government and all successive governments to new standards of public accountability and public sector financial management. And perhaps, more importantly, from the public’s point of view, it will empower civil society and the Parliament to participate in the system of accountability in a robust and comprehensive way. “To give you an idea of how this works in the new law, it will establish an independent five-member Fiscal Responsibility Council comprised of civil society professionals with specific areas of expertise in law, business, economics, accounting, and finance.”
He said the Government does not nominate these professionals. In each respective category, they will be nominated independently by the Bahamas Bar Association, The Chamber of Commerce, the University of The Bahamas, the Bahamas Institute of Chartered Accountants and the Certified Financial Analysis’ Society of The Bahamas. The DPM said the Fiscal Responsibility Council is mandated to conduct periodic and on-going assessments of the Government’s finances and to make its assessments public. The Government is also mandated to provide its fiscal strategy reports to the Fiscal Responsibility Council and to also to the Parliament. He said the new law will require the Government to submit a Fiscal Adjustment Plan to explain any proposed deviations from its Fiscal Strategy Report.
The law will require the Government to present a Fiscal Impact Analysis along with any new spending proposal that falls outside of the approved budget. “The proposed legislation is very specific and clear: All of these documents are to be made public on specific dates or time periods, and; the contents of each document must conform to the guidelines in the law. “Simply put, the proposed Fiscal Responsibility Legislation reinforces transparency and responsibility in the management of the fiscal finances and strategically enjoins the participation of Parliament and the people in holding the Government accountable for achieving its fiscal targets and objectives.” DPM Turnquest explained that since the new fiscal and debt targets will require a significant adjustment from the current fiscal position, the Bill contemplates a three-year transition period to ensure this is done in an orderly manner.
He said this time frame will also allow the Ministry of Finance to align its internal resources to deliver on the more rigorous reporting requirements necessary for the public’s assessment of the Government’s fiscal strategy and performance.
The DPM said while all aspects of the Bill are essential to the fiscal responsibility principles, the overarching strategic goals pivot on the fiscal objectives, which are to:
- Lower the deficit and maintain a sustainable fiscal balance
- Lower debt to sustainable long-term levels
- Maintain current expenditure growth in line with growth in nominal GDP
“We believe that this combination of fiscal objectives will achieve sustainability in the Government’s finances and ensure the long-run stability and viability of the Bahamian economy.”
The public can find information on the Bill at the Ministry of Finance’s Facebook Page, on the Government’s website – www.bahamas.gov.bs – and through traditional media outlets.
The draft Bill is available for download starting today, and the public can submit comments to firstname.lastname@example.org.