Jamaica News: Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says drafting instructions are being prepared for issue to the Chief Parliamentary Counsel (CPC) to facilitate the establishment of the proposed Fiscal Council.
The Council will replace the Economic Programme Oversight Committee (EPOC) as the independent monitoring body for Jamaica’s Economic Reform Programme (ERP).
“I have given a public commitment to table a draft of the legislation that will give rise to a Fiscal Council, by April 2020,” the Minister said.
He was speaking at a media round table at the Ministry’s National Heroes Circle offices in Kingston on Friday (September 20).
Dr. Clarke reiterated that the Council will be the final arbiter of Jamaica’s Fiscal Rules that stipulate, among other things, a debt-reduction target of 60 per cent of gross domestic product (GDP) by financial year 2025/26.
The rules, he said, also prescribe the fiscal balance that Jamaica needs to maintain in order to achieve that target.
Dr. Clarke explained that in its role as EPOC’s successor, the Council will make independent commentary on the Fiscal Policy Paper, laid in Parliament simultaneously with the Budget, which outlines a medium-term profile and projections.
Additionally, he said the Council will comment, independently, on the interim Fiscal Policy that is laid in the House in September each year, and will have access, via legislation, to data from the Ministry and other government agencies.
The Minister advised that the Council’s members will be required to make periodic statements publicly about Jamaica’s fiscal trajectory and whether government policies are broadly consistent with those objectives.
“What they [will be] concerned with is the envelope of expenditure and whether that broad envelope is consistent with a long-term debt objective and sustainability over time,” Dr. Clarke noted.
He added that the Council’s establishment “will promote fiscal transparency and lead to greater incentives for a government pursuing polices that are credible and greater disincentives for governments doing things that are not”.
Dr. Clarke pointed out that the pathway to the Council’s establishment has, to date, entailed consultations with a wide cross section of local and international stakeholders, including members of the public.
A consultancy firm led by the head of the Independent Fiscal Institution in Canada was engaged, which made some recommendations, and the Ministry also received technical advice from the International Monetary Fund (IMF), through its Fiscal Affairs Department.
“We [also] benefited from a comparative analysis of what occurs in other countries,” the Minister added.
EPOC, which was established in 2013 when the country entered into the four-year Extended Fund Facility (EEF) with the IMF, was supposed to have concluded at the end of the three-year Precautionary Stand-By Arrangement in November 2019. However, the life of the Committee has been extended until the Fiscal Council is in place.
Source: JIS News