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No retreat - Shaw continues to defend FINSAC spending

Published:Wednesday | January 20, 2010 | 12:00 AM

Arthur Hall, Senior Staff Reporter

Finance Minister Audley Shaw is not backing down from his defence of the Government's decision to spend $80 million on the Financial Sector Adjustment Company (FINSAC) Commission of Enquiry, even as more questions are asked about whether the money could not have been better spent.

The questions come in the wake of the Government's decision last year to slash the amount initially allocated to most ministries in the wake of a major fallout in projected revenue, and to freeze public-sector salaries.

Many ministries cut expenditure on key programmes; from the much-talked-about multibillion-dollar school-building programme to a few millions of dollars which were cut from the witness-protection programme.

CDF cut in half

Even the Government's marquee Constituency Development Fund allocated to the 60 members of parliament was cut in half, as the Golding administration told the country it had no choice.

But that did not stop the spending on the commission of enquiry, and yesterday Shaw went on the offensive.

Addressing a Jamaica Stock Exchange Forum in New Kingston, Shaw argued that the circumstances surrounding the financial sector meltdown in the 1990s and the subsequent $140-billion debt left by the FINSAC bailout was too grave for the country not to probe.

"The Government will not resile from its commitment to put on record these events," Shaw said.

"We are resolute that this must not happen again," added Shaw, as he argued that the money allocated for the FINSAC enquiry was always public, as it was included in his budget presentation last April.

Let's go there

The finance minister also charged that 10 years ago the People's National Party administration spent between $80 and $90 million for a Canadian firm to conduct a single forensic audit.

"So if you want to go there, we will go there," Shaw declared, as he claimed that the FINSAC commission was coming under attack from persons who did not want the story to be told.

But even as Shaw voiced his defence, callers to our news centre and radio talk shows expressed concern about the timing of the expenditure.

Many argued that at this time the money could have been better spent in other critical areas.

Checks by The Gleaner showed that several ministries and government entities lost more than $80 million from critical programmes in the revised budget tabled last September.

These included the University of Technology, which lost the $80-million grant it had been allocated, the Office of the Prime Minister, Local Government division, which had $44 billion allocated to repair fire stations cut, and the Ministry of National Security, which lost $50 million allocated towards the construction of a well-needed public morgue for Kingston and St Andrew.