Wednesday, July 11, 2018
By NEIL HARTNELL
Tribune Business Editor
Governance reformers yesterday urged the government to treat the Fiscal Responsibility Bill with "the same urgency" as the VAT increase given the extra "sacrifice" demanded from taxpayers.
Matt Aubry, the Organisation for Responsible Governance's (ORG) executive director, told Tribune Business he was "hoping something comes out before the next round of sessions [of Parliament] and before they break for summer".
The House of Assembly is back in session today, and Mr Aubry argued that the 60 percent hike in the VAT rate had increased the urgency for the government to demonstrate it was fulfilling its fiscal consolidation obligations by bringing the bill into law.
"What I heard last was I received a letter from the Minister of Finance [KP Turnquest] acknowledging they had receive our comments, and were waiting on comments from a few other groups," he said.
"Those comments were being evaluated now, and there would be a revised draft coming out soon. We've had a chance to talk to him, and he's acknowledged some of the stuff sent in. I know they've got recommendations from the Bar and others."
Mr Aubry said the Government had shown every sign of realising this was "a critical piece of legislation they need to get in place, and added: "The Deputy Prime Minister and others seem very focused on this.
"We're hoping it moves as expeditiously as possible, and we're looking forward to seeing what comes out of this so we have strong and enforceable Fiscal Responsibility legislation in place for the coming year."
ORG, though, in a statement released yesterday, urged: "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."
It called for the legislation to be passed by Parliament before the summer recess, a target that is also in keeping with the Deputy Prime Minister's goal. Mr Turnquest told Tribune Business he wanted the Bill passed by then, or immediately following its return in the fall, given the 'trust deficit" that has arisen between the Government and Bahamian people over management of the country's fiscal affairs.
"Last year, Mr 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 Mr Aubry in a statement.
"We applaud that a Fiscal Responsibility Bill was introduced in March 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."
He added that the Fiscal Responsibility Bill's passage had been made even more urgent by the VAT rate increase and additional hardship being imposed on the Bahamian people.
"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," Mr Aubry said.
ORG also called for a more robust, codified system of penalties/incentives to be included in the revised draft as a means to crack down on irresponsible fiscal behaviour.
"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," Mr Aubry said.
"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 previously warned that the Fiscal Responsibility legislation could be "ineffective" without tougher sanctions due to "The Bahamas' poor history of non-compliance with similar laws".
It also called for the independent, five-member Fiscal Responsibility Council that currently has just an oversight and advisory role to have more power to "proactively contribute to fiscal strategy and decisions, and enforce its advice, recommendations and decisions".
"Throughout the Bill there is a noticeable lack of reference to penalties or incentives to encourage compliance and rectify behaviour in the implementation of fiscal responsibility and discipline processes," ORG said. "Where there is mention of penalty, said penalties are not defined or codified and are left to Ministerial discretion, allowing room for uneven or unfair application, or the perception thereof....
"Given the Bahamas' poor history of compliance with similar reporting laws, such as Public Disclosure, there is concern that without methods of enforcement there is a risk that the Fiscal Responsibility Bill could ultimately be ineffective despite its thorough reporting mandates and methodically outlined goals."