As if to prove us wrong that theirs is a chamber given to thoughtful, reflective discourse, senators engaged mostly in juvenile rants last Friday, surrendering an opportunity to make better a potentially good bill for the management of public debt. We are gravely disappointed.
Among the positive things in the bill that went to the Senate - apart from making it mandatory for the finance minister to report publicly on his debt-management strategy - is the limit it places on the Government's capacity to borrow.
Each fiscal year, the finance minister can raise debt up to the sum of what is required to meet principal that fiscal year, the amount of the fiscal deficit, and any amounts raised ahead of time for principal payments that fall due in the next 12 months.
The Government can also borrow up to another 10 per cent of the value of the principal payments that fall due that year, but this additional borrowing comes with greater parliamentary scrutiny.
Additionally, the bill sets a range of targets, up to 2026-27, for the lowering of the "government-guaranteed" debt to three per cent of gross domestic product (GDP).
Too many loopholes
All of these pointers to the right direction for Jamaica begin with its debt, now at an unmanageable 140 per cent of GDP. But we do not believe the proposed regulations are stringent enough.
There are, on the face of it, too many and too wide loopholes through which a finance minister, of irresolute character, can 'run with it'.
It is against this backdrop that this newspaper had recommended that the legislation set a ceiling for the fiscal deficit and requirement for specific parliamentary approval if it is to be breached.
That would be the most crucial strategy for keeping public borrowing in check and, therefore, the effective deterrent to breaching the fiscal-responsibility programme that the legislation sets out, especially in the absence of sanctions against the finance minister and the Government for failing to meet targets.
In a sense, Marlene Malahoo-Forte, of the Opposition Jamaica Labour Party, was on to something in raising concerns about punishment for a finance minister who fails in his legislative undertaking, but she missed the fundamental issue.
Christopher Tufton, also of the Opposition, and Lambert Brown, on the government side, mounted petty, partisan soapboxes rather than engage real, substantive issues. Indeed, we believe it is reasonable to question just how closely legislators, on either side, had perused the bill to determine its capacity to deliver on its promise.
It may seem, as government senator Mark Golding argued, that given the transparent fiscal-responsibility framework with which they must operate, a finance minister cannot go off "on a frolic of his own or some kind of political indulgence and borrow excessive money".
In the absence of a specific limit on the annual fiscal deficit, he just might be able to, with the only consequence being public opprobrium. The upside is that given the new reporting requirements and intended transparency, the people might know about the frolic earlier.
In the event we are told that the undertaking to reduce "government-guaranteed" debt represents the effective constraints on the minister, we would have appreciated fuller definition/interpretation of what is covered. The senators didn't ask.
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