Friday, Apr 19, 2019

Government passes new legislation to tighten spending

Government passes new legislation to tighten spending
16 Jan

Prime Minister Mia Mottley has welcomed legislation she says will place a cap on contingencies, prevent the Central Bank of Barbados (CBB) from overprinting money and would also allow for an independent audit of Government’s finances.

Winding up debate on the Public Finance Management Bill 2019, Mottley, whose administration was swept into power in the May 2018 general elections, said the legislation would also prevent future governments and legislators from operating “under the cover of night”.

She told legislators that the legislation was also needed in light of the former administration that chalked up a debt of BDS$15 billion (One Barbados dollar=US$0.50 cents) “with nothing to show for it.
“No Government in this country must ever be allowed to act in the manner in which the last government acted, with impunity, hiding under the cover of night, with nothing to show for what they did to take money from innocent taxpayers and we have come here conscious of this.

“This is not about getting even with a previous Government, this piece of legislation is about the future. This is about the standards to which we bind ourselves as a Government in good faith,” she told parliament.

She said the Public Finance Management Bill 2019 is one “of the most important pieces of legislation that will be passed in a post-Independence Barbados” and “will be able to significantly increase the level of accountability of a government to be governed”.

Prime Minister Mottley said the bill would demand levels of transparency which had never before been seen in the Caribbean.

“In less than nine months we have already brought to this house two major pieces of legislation with respect to the personal conduct of public officials and other pieces related to the standards to which public finances must be held and we have incorporated some of those in this piece of legislation here”

She said the bill seeks in almost every respect “to heighten the levels of accountability and transparency by the government of Barbados, by ministries and departments, by ministers and public officials, by commercially-owned state enterprises and other state enterprises in this country, in other words, all entities or persons acting in the public name in this country”.

Earlier, Attorney General, Dale Marshall, described the legislation as a key component in ensuring Barbados does not go through some of the economic hardship it experienced over the past decade.

“The bill was moved in December but we needed to get it right, so we set up a joint select committee to look at it so that it could do what it was supposed to do.

“While we did not have any public meetings on it as we did with the Integrity in Public Life legislation, we did have good contributions on how we could improve it from the Leader of the Opposition in Parliament, one of the Opposition Senators and one of the independent Senators, so we did get the benefit of opposing views from people with expertise and training in these areas.”

Marshall said that while the original bill was passed in 2007, “it was not effective enough.

“This new one shows that the glaring mistakes of the last government do not happen again, and will hopefully remove some of the cynicism most Barbadians feel when they think of accountability for government spending,” he said, noting that all government departments and state-owned corporations submit financial reports at least twice a year.

“This legislation will call on every state-owned agency to have an annual plan outlining its financial and other performance. So, for example, if the Rural Development Commission wants a million dollars, they must be able to state the purpose for it, whether it is for houses, loans or payment of salaries.

“Their plans of action must be posted on a Government website within a week of the Estimates. And after six months, they must present a half-yearly report to Parliament, stating what they have achieved, and if they have not met all their goals, they must explain why and account for all the money they have spent.”

Marshall said that another element of the legislation is that if a public official, including a minister, “Intends to commit government’s finances in an inappropriate way, a public servant has the right to warn that higher official that it is wrong, and if he disagrees with that counsel, he has to write the public servant back and give reasons as to why he is not following his.

“The public servant can then write to the Director of Finance and explain everything, and if this decision causes any wastage for government, the minister will be held personally liable for it. We cannot go back and change history now, but if that aspect of the law was in place under the last administration, some people would have been in serious trouble,” Marshall said.