‘Compelling reasons’ absent over public finance reforms


Tribune Business



THE OPPOSITION’S finance spokesman yesterday urged the Davis administration to provide more “compelling reasons” to justify reforming the Public Financial Management Act 2021.

Kwasi Thompson, former minister of state for finance in the Minnis administration, told the House of Assembly during debate on the Public Finance Management Bill and Public Procurement Bill that the changes being made weaken fiscal accountability and transparency.

Focusing on the Public Finance Management Bill, which is designed to repeal and replace both the existing Public Finance Management Act 2021 and Fiscal Responsibility Act 2018, as well as parts of the Financial Administration and Audit Act, Mr Thompson said: “You have taken away powers that the previous Act gave to the treasurer or the accountant general.

“One of the main powers that you’ve taken away from them, which will remove from this Bill, is the ability of the accountant-general to compel public servants to give evidence under oath before the treasurer or before the accountant general.” This power to compel public servants to give evidence under oath has been reserved primarily for the courts and Parliament, but the east Grand Bahama MP said this is a “significant” change to the current Bills.

Mr Thompson added: “The second thing that this Bill does is it removes the statement, and removes the offence in the previous Fiscal Responsibility Act 2018 which, in Section 5 (4), says a public officer and a public office holder shall not expend public money, create debt, enter into any commitments or otherwise create liabilities for the Government without lawful authority. That was an offence in the previous Act.”

He argued that the new Bill removes this provision “without any justification”. The reforms also make the annual Fiscal Strategy Report part of the Budget process, and Mr Thompson said doing so undermines the purpose of the Fiscal Strategy Report as a guide for the Budget process.

“The Fiscal Strategy Report is so significant it should not be a part of the Budget process, and it is taking away the ability of the House to debate it,” Mr Thompson said. “They are also significantly changing the exception circumstance clause of the previous Public Financial Management Act. There was a specific reason that you must justify, and you must show, if you wish to deviate from fiscal targets.”

The existing Act allows deviation only in the event of external shocks, natural disasters or national security issues, but Mr Thompson accused the Davis administration of having “watered” these down in the new Bill before Parliament. Now, only an “unforeseeable event” is required.

The current Public Financial Management Act mandates that the government must come back to Parliament to justify any deviation from the fiscal targets, but the new Bill removes the need for a debate in Parliament if this occurs.

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