Fiscal paper falls short, says Shaw
ONE lawmaker has opined that the timing of the laying of the fiscal policy paper (FPP) interim report in Parliament has been relatively unhelpful since it contains information on only four months of the fiscal year.
The paper, which was laid in the House on September 30, was reviewed by the Public Administration and Appropriations Committee last Wednesday. However, committee member Audley Shaw said that the FPP should be a mid-year review, and thus, it should have contained performance figures of the economy up to September.
"It seems to me that, going forward, the purpose of the fiscal policy paper, mid-year, is to facilitate a mid-year review of the Budget," argued Shaw, as he noted that the data in the interim report goes up to July.
Financial Secretary Devon Rowe said the paper was written close to the end of September and "the only final numbers we had at that time would have been July. August was still being finalised".
The Financial Administration and Audit Act, which was amended this year, requires that the finance minister, within six months of the passage of the Budget for the fiscal year, tables a fiscal policy paper in both Houses of Parliament.
The FPP should contain the economic out-turn of the previous fiscal year, the performance of the first quarter of the fiscal year, the projections to the end of the current fiscal year, and projections for the succeeding fiscal year and medium term.
According to Shaw, it was not the intention of Parliament to have the paper dealing with the first three or four months of the fiscal year, but rather the first six months.
"Going forward, you might want to consider delaying the policy paper by a few weeks and get the September numbers in so that we can have a half-year review, which was the original intent of the interim policy paper," said Shaw.
But director in the Ministry of Finance's Fiscal Policy Unit, Courtney Williams, noted that when the Financial Administration and Audit Act was amended in March, it was intended to cover the first quarter of the fiscal year.
"It would have been the April to June period and then we look at the full fiscal year and also the medium term," Williams said while arguing that the current situation is a consequence of the amendment to the act.
"Part of the change is the new approach in terms of the new budget cycle. The Budget will be prepared, tabled and debated earlier than previously done, so the Budget call, which normally would have been going out at the end of November, the FAA Act now requires the Budget call to go out in September, so consistent with that is an adjustment when the fiscal policy paper would also be tabled," said Williams.
He added that the tabling of the FPP with the first-quarter results would support the Budget call going out in September. The amended law, which forms part of the enhanced fiscal rules, requires the Budget to be passed by the end of March each year.
"To do it in September means that we would cover the first quarter of the fiscal year and also give an estimate to the end of the year and at the aggregate level what the following year's Budget would look like," said Williams.