Wed | Jul 8, 2020

Clarke, Phillips wrestle in fiscal rules spat

Published:Thursday | May 28, 2020 | 12:00 AMEdmond Campbell/Senior Parliamentary Reporter
Finance and the Public Service Minister Dr Nigel Clarke.
Opposition Leader Dr Peter Phillips.

Legislation to amend the fiscal responsibility law was passed by the House of Representatives on Wednesday without amendment but not before a lengthy and contentious debate over the route taken by the Government and the short notice given to the Opposition.

The passage of the law is the first of several steps that will clear the way for the Public Administration and Appropriations Committee to examine the First Supplementary Estimates of Expenditure.

Last week, the committee said it could not review the revised Budget until the rules in the Financial Administration and Audit (FAA) Act were observed.

The legislation passed yesterday will amend the FAA Act, which seeks to extend the debt-to-GDP target of 60 per cent by March 31, 2026, to March 31, 2028.

The two-year adjustment being sought by the Government in the legislated target is occasioned by the onset of the COVID-19 pandemic, which has shredded the economic projections of the administration, leaving in its wake a maximum six per cent contraction forecast for the economy and an $81-billion loss in revenues for the current fiscal year.

During Wednesday's debate, opinions clashed fiercely as Leader of the Opposition Dr Peter Phillips and Finance Minister Dr Nigel Clarke squared off, with both lawmakers shouting at each other from across the aisle.

"What they want is for us to delay, delay, delay ? there is no room for delay," a spirited Clarke declared.


With decibel levels rising sharply, Clarke said: "If it was up to them, all they are interested in is delay, delay, delay. The need is now. The people need assistance now; there is no room for delay."

Phillips rose on a point of order, charging that Clarke was misrepresenting what the Opposition had said.

With the shouting match at full pitch, Phillips urged Clarke to withdraw his 'disingenuous' remarks. However, Clarke dismissed his call.

Clarke said that the Government could not delay passage of the revised Budget, which contains $6 billion in expenditure for the health sector and $17 billion for social programmes.

He said that because of the COVID-19 crisis, the administration had to find an avenue through which suspension of the fiscal rules could be pursued.

Clarke said that the bill proposes to amend the FAA Act to include as a trigger for the suspension of fiscal rules the declaration of Jamaica as a disaster area under Section 26 of the Disaster Risk Management Act.

Another step to trigger suspension of the fiscal rules is the making of an order under Section 16 of the Public Health Act.

He said that this amendment would pave the way for the initiation of the process to suspend the rules.

However, Opposition Spokesman on Finance Mark Golding said that from the onset of the COVID pandemic here, the Government was advised that a declaration of a public emergency within the parameters of Section 20 of the Constitution was the approach to have taken.

He said that Clarke, while in the Upper House, had strongly recommended that the fiscal responsibility rules be enshrined in the Constitution.

"Here we are today, where he is amending the FAA Act by circumventing the constitutional rule," Golding said.