Wed | Oct 21, 2020

Budget deadlock - Examination of Estimates halted as legal opinion sought on rule breach claim

Published:Thursday | May 21, 2020 | 12:00 AMEdmond Campbel/Senior Staff Reporter
Darlene Morrison

Solicitor General Marlene Aldred is expected to provide legal guidance to a parliamentary oversight committee that halted its examination of the First Supplementary Estimates of Expenditure yesterday, claiming that it could not proceed until the Government complied with stipulations under the fiscal responsibility law.

Yesterday, an examination of the revised Budget by the Public Administration and Appropriations Committee (PAAC) came to a premature end after some members charged that the process was in breach of the Financial Administration and Audit (FAA) Act.

Finance and the Public Service Minister Dr Nigel Clarke tabled the First Supplementary Estimates in Parliament last week, arguably the earliest that a revised Budget had been tabled, owing to the massive impact on government expenditure and revenue.

Financial Secretary Darlene Morrison faced tough questions from members of the PAAC, who sought answers as to why the committee was being asked to review a revised Budget with significant deviations without the auditor general first reviewing and commenting on it.

The Planning Institute of Jamaica (PIOJ) also has a role in the process.

Committee Chairman Dr Wykeham McNeill said that the administration had bypassed provisions in the FAA law when it referred the revised Estimates for examination without first having the auditor general and PIOJ comment on the major shifts in projected spending.

“The minister has indicated that he will be moving the primary balance from 5.4 per cent to 3.5 per cent, changing the target which is enshrined in law, and, therefore, we would need those figures checked by the auditor general,” McNeill insisted.

He also indicated that with major adjustments in the fiscal targets, it had become necessary for Parliament to approve a resolution amending the fiscal responsibility law.

Last week, Clarke pointed out that the deviation from the Government’s programmed target was unavoidable and would necessitate a suspension of the fiscal rules.

“The use of the word ‘suspension’ is technical and legal as defined in the fiscal responsibility law. The procedural steps which are required by the law will be followed,” Clarke told his colleague lawmakers after tabling the revised Budget.

Morrison told the committee that the ministry was in the process of making a submission to the auditor general. She said that the PIOJ was also preparing its document for submission to the auditor general.

However, government backbencher and attorney-at-law Leslie Campbell asked Morrison if she had advised the committee in the past that it was not necessary to get the permission of the auditor general in relation to Supplementary Estimates.

“No. Not that I am aware of,” said Morrison.

However, she said in relation to the current Supplementary Estimates: “I can’t give you a position at this time.”

She later recanted, saying: “This particular Supplementary is suggesting a deviation from the programme. Then we need to take aspects of the law into consideration. Therefore, I would say we need to get some legal opinion on this.”

Morrison said that earlier this year, when the finance minister indicated that he would need to do a Supplementary even though “we had a suspicion that he may need to suspend the rules, it would not yet have been clear as to what the required level of adjustment was.

“Now that we have done the Supplementary, which indicated a 1.9 per cent of GDP deviation, then yes, it would suggest that a suspension was required,” she said.

The financial secretary noted that an amendment of the law would not be necessary at this time because “that comes when you have determined that you cannot get back on a track in later years to meet the targeted legislation”.

She said that the minister had indicated when he tabled the Supplementary Budget that the Government was unlikely to meet the targeted debt-to-GDP legislation in 2025-2026 given the parameters he was considering.

Committee member Phillip Paulwell argued that although COVID-19 had forced the Government to craft a revised Budget, the committee could not proceed to review it until the rules and laws were observed by the Government.

“We can’t willy-nilly today start to examine what really is a new Budget for 2020-2021 in breach of the rules,” he said.