NASSAU, The Bahamas -- Acting Prime Minister and Minister of Finance the Hon. K. Peter Turnquest said Fiscal Responsibility laws have become a common means by which countries have sought to establish a comprehensive framework for managing fiscal policy with greater reliability, certainty and transparency. 

The Acting Prime Minister was making the Opening Statement to the debate on the Fiscal Responsibility Bill, 2018 in the House of Assembly, Thursday, September 27, 2018.

He said, “Generally, they are a combination of rules and regulations to strengthen fiscal transparency and budgetary management, and typically have numerical ceilings on the deficit and public debt to achieve fiscal discipline.

“The Fiscal Responsibility Bill that I have now tabled seeks to secure the vital fiscal gains set out in the recent Budget.  Indeed, I would note that, notwithstanding the fact that the Fiscal Responsibility Bill has not yet been enacted, we crafted the FY2018/19 budget to be fully consistent with the key principles and articulated fiscal targets of the Bill, underscoring our commitment to the achievement of fiscal discipline and sound governance.”   

The Acting Prime Minister explained that the draft Bill was released in early May 2018 for public consultation, review and feedback.  Among the stakeholders who responded were The Bahamas Chamber of Commerce and Employers’ Confederation, the Organization for Responsible Governance and the Central Bank of The Bahamas who all welcomed the Bill as timely and as having the ability to achieve fiscal sustainability in our public finances.

He said the comments on the Bill that were received were wide-ranging and focused on a number of substantive policy issues, including:

• the treatment of capital spending and the appropriate mix of expenditure;
• the coverage of taxation and tax reform matters;
• the handling of deviations from the fiscal targets;
• the treatment of State-Owned Enterprises;
• governance and the role of the proposed Fiscal Responsibility Council (FRC);
• the timing of FRC reviews;
• prescribed accounting standards;
• the pre-election fiscal update; and
• amendments to the Schedules.

The Acting Prime Minister said the Government has also taken note of public commentary on the Bill from the Inter-American Development Bank and other international agencies; and has greatly benefitted from the expertise and practical experience of IMF-associated experts who were involved in the legislative drafting.

“Throughout, the drafting has also been inspired and guided by the Organization for Economic Cooperation and Development’s (OECD) Recommendation on Principles for Independent Fiscal Institutions. 

“In developing these principles, the OECD recognized the potential of independent parliamentary budget offices and fiscal councils—to which I will speak later in my statement—to enhance fiscal discipline, promote greater budget transparency and accountability, and raise the quality of public debate over fiscal policy intentions, projections and outcomes.”

He said in concluding work on the Fiscal Responsibility Bill, the Government carefully considered all of the comments and suggestions received from stakeholders, and incorporated many of the proposed amendments into the revised Bill that has been tabled today.

“We have also identified areas that would more appropriately be addressed in the proposed Public Financial Management (PFM) Bill that is intended to eventually replace the Financial Administration and Audit Act.  Drafting work has begun on the PFM Bill and our plan is to make it available for public consultation this fiscal year.”

Acting Prime Minister Turnquest noted that the Fiscal Responsibility Bill is to come into force on the October 1, 2018, save for the provisions in respect of the proposed Fiscal Responsibility Council that are to come into force on July 1, 2019, in time for the Council to review and assess the 2019/20 Budget.