The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Ministry of Finance’s top official last night said reforms tabled in the House of Assembly yesterday represent “a sea change” in the way the government manages the public finances.

Marlon Johnson, the acting financial secretary, told Tribune Business that the Public Debt Management Bill and Public Finance Management Bill will require the government to “measure our performance and output” on the fiscal front through strengthened reporting as well as the greater use of analytic tools and data.

He was echoed by Kwasi Thompson, minister of state for finance, who said: “Legislative reform doesn’t often seem revolutionary, but we don’t want Bahamians to miss the monumental changes these Bills will bring about.

“For the Public Finance Management Bill, there will be criminal penalties imposed for the first time for financial malfeasance in the public sector. Everyone will be held to a higher standard. New financial reporting requirements, like monthly budget reports, will be introduced to government for the first time.

“Bahamians may have assumed these things were in place, but the truth is, the Financial Administration and Audit Act 2010, which we are now replacing, had many weaknesses and was terribly outdated,” he added.

The Public Finance Management Bill moves the Government to a principles-based approach to managing its finances, which focuses on results rather than the administrative approach employed by the Financial Administration and Audit Act 2010. The new legislation requires outcomes-based budgeting and reporting to support better management of The Bahamas’ finances.

“This is very significant as it will require cultural changes within our ministries and agencies. Ministries are not only responsible for spending and accounting for budgeted resources,” Mr Thompson said.

“They will now be responsible for tracking and reporting the impact of their spending; the impact of their programmes. Are they using public funds in a way that deliver the desired and intended results? These are monumental shifts we are ushering in with our legislative forms.”

The Bills were introduced in the House of Assembly by Dr Hubert Minnis, prime minister and minister of finance, who said they are “critical” to sound fiscal management and “evidence-based decision making” in the Government’s finances.

““These pieces of legislation will modernise the very foundation of public finance management in The Bahamas,” he said, with the Public Debt Management Bill mandating that the Government at all times minimise debt servicing costs associated with its borrowings.

“The Public Debt Management Bill seeks to create a modern and comprehensive legal framework that permits a clearly articulated and transparent framework for public debt management,” the Prime Minister added.

“The overriding objective of the Public Debt Management Bill is to consolidate and modernise existing debt management provisions. The legislation will create necessary linkages with the Fiscal Responsibility Act, which provides parameters for debt ceilings that correspond to the trajectory of the country’s economic growth. This legislation will set the framework for the country’s debt management strategy going forward.

“A core tenet of my government is the promise of accountability and transparency, particularly when it comes to the management of the people’s money. These Bills will continue to deliver on that promise. They will further upgrade and bring our fiscal governance in line with international best practices by fostering much enhanced transparency and accountability in the way we manage the public purse.”