Lead Stories

Daraine Luton, Senior Staff Reporter

FINANCE MINISTER Audley Shaw yesterday pledged to "rein in renegade" public-sector entities which, he said, have been reckless in the management of their affairs and have contributed to Jamaica's public debt soaring beyond the $2-trillion mark.

Shaw, who brought legislation to the House of Representatives which is aimed at strengthening the Financial Administration and Audit Act and the Public Bodies Management and Accountability Act, said the laxity in governance and the absence of proper rules contributed to the mounting public debt.

"We have seen where public bodies over the years have invariably and, on some occasions, become laws unto themselves," Shaw told the House.

The amendments to the public bodies act, according to Shaw, are to stress to these entities that they are accountable to Parliament, as well as the finance minister.

"It then puts the limelight on to public bodies to let them understand that they are not laws operating on their own; they are not free agents out there," Shaw said.

The bill prohibits public bodies from entering into arrangements to borrow money through the issue of bonds without approval from the minister of finance.

"We have to rein in public-sector entities. We have to bring them under strict management, tight control because, even as we divest some, those that are not divested have to be brought under tighter management," Shaw said.

However, Dr Omar Davies, the opposition spokesman on finance, said the proposed legislation did not advance existing legislation and public-sector guidelines.

"What if someone tables a projection of expenditure and revenue which is nonsense? What are the penalties?" Davies remarked.

"There is nothing new in these bills in terms of bringing greater accountability in a tangible way ... . Let us not fool ourselves that this issue which we have, the issue of accountability within the central government itself, as well as the issue of accountability within the public bodies, that these two pieces of legislation are the silver bullet because they still do not provide us with the basis on which we can rein in those public bodies," he added.

Never 'run wid it' again

However, Andrew Holness, the leader of government business, said the legislation was changing the way in which Government operates. In a thinly veiled jab at Davies, he said the proposed amendments mean that no minister of finance can "run wid it again".

Davies, when he was finance minister, said at a party meeting that he had taken the decision to "run wid it" because there was an upcoming election the People's National Party wanted to win.

"We are not depending on legislation to keep us in check, but we are putting in place the legislation as a show of good faith to our international development partners and to secure a new dispensation in the management of our macroeconomic affairs," Holness said.

The Financial Administration and Audit Act sets out a framework to reduce the fiscal deficit to nil by 2016; to reduce the debt-to-GDP ratio to 100 per cent and to cut the public-sector wage bill to nine per cent of GDP by 2016.

Government was forced by the International Monetary Fund to make the amendments to the legislation to dictate fiscal responsibility. The country recently entered into a 27-month agreement for a standby facility with the multilateral agency.

daraine.luton@gleanerjm.com