The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Governance reformers yesterday expressed hope that the Fiscal Responsibility Bill has gained more enforcement "teeth", branding its imminent arrival in Parliament a "momentous occasion".

Matt Aubry, the Organisation for Responsible Governance's (ORG) chief executive, told Tribune Business that its optimism was based on public comments by the deputy prime minister about provisions in the bill that were not included in the initial draft issued for public consultation.

KP Turnquest, speaking at a Bahamas Chamber of Commerce breakfast, said the Fiscal Responsibility Council - the body created to oversee and monitor the government's compliance with the legislation - would be able to make recommendations to the Public Accounts Committee (PAC) that could lead to the newly-independent director of public prosecutions taking legal action.

Encouraged by this, Mr Aubry accepted that the government's desire to push the Fiscal Responsibility Bill through Parliament before the summer recess might mean that the revised, final draft version of the legislation was not released until its House of Assembly tabling.

Revealing that he spoke to Mr Turnquest at the House on Wednesday, Mr Aubry explained: "He said that the timing of it is the need to get it in front of Cabinet. The timing of it seems to have run out.

"I somewhat anticipated that might be the case. I knew it might run up against the end of the [parliamentary] session. I wanted to make sure they had considered our recommendations, but understood there might not be further time allocated for public consultation."

ORG, for one, 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". Its concerns were echoed by another civil society group, Citizens for a Better Bahamas, the local Transparency International affiliate.

"The way the original draft was written, the PAC could ultimately make a recommendation to the Ministry of Finance that they might consider a fine or penalty," Mr Aubry said yesterday.

"In his comments, the Deputy Prime Minister said the PAC would be able to take advice and, if need be, if something was found to be out of order, to deal directly with the DPP. I didn't see that in the original legislation.

"He said he didn't want to set something up for political retribution and I think that makes sense. To keep everything on board, use the Fiscal Council as much as possible."

ORG, in its feedback on that draft, had warned: "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."

Mr Aubry yesterday said "it's a rather momentous occasion it's come this far", explaining that one of ORG's reasons for being was to push for the creation and passage of a Fiscal Responsibility Bill that would hold governments accountable for irresponsible spending that drove higher deficits and debt.

"One of our main priorities and focuses was to ensure the Fiscal Responsibility Bill comes to light," he told Tribune Business. "This is very exciting for ORG; it's at the precipice of passage and enactment.

"There are a lot of components in the Bill that speak to greater public awareness, facilitation and scrutiny, and more proactive driving of strategies to meet the fiscal goals of the Government. These are key things. We don't want to wait longer. Our hope is the Bill is tabled and debated."

Mr Turnquest yesterday said he wanted this to occur next week if all goes to plan, and Mr Aubry said ORG planned to distribute its concerns and recommendations on the Bill to all MPs so they were aware of the issues and nations the Bahamas' legislation was benchmarked against.

He also praised the Deputy Prime Minister's willingness to engage in dialogue with civil society on the issue, suggesting it should act as a model "for all Cabinet ministers" when it came to bringing legislation forward.

The Fiscal Responsibility Bill's key targets require the Government to slash the fiscal deficit to 0.5 per cent from 2020-2021 onwards, cutting it from a sum equivalent to 5.8 per cent of GDP in the 2016-2017 Budget year. This means reducing it from near $700 million to around $54 million over a four-year period.

The Bill's 'first schedule' sets out a 'glide path' or 'road map' for achieving this, acknowledging - as the IMF stated - that "significant fiscal adjustments" are needed over the next two Budget years to hit this objective.

To enable the public sector and wider Bahamian economy "to achieve the fiscal objective in an orderly manner", and avoid unnecessary shocks, the Bill calls for 2018-2019 and 2019-2020 deficits that "shall not exceed" 1.8 per cent and 1 per cent of GDP, respectively. The first target is what the Government is going for this coming fiscal year, aided by the VAT hike.

The Bill also sets out a "long-term" target of reducing the Government's direct debt-to-GDP ratio from the current 58 per cent to "no more than 50 per cent". The year by which this target is to be achieved has to be set out in the Government's 'fiscal strategy report', which must be submitted to Parliament no later than the third week of November each year.