Editorial | Fiscal Commission’s time

With general election on the horizon and the penchant of governments in these circumstances to find creative ways to open the financial spigots, Courtney Williams is getting into the business end of his job at a critical period, especially with Nigel Clarke’s departure as Jamaica’s finance minister.

Mr Williams was appointed to the new role as the island’s fiscal commissioner 18 months ago. Most of that time, we expect, would have been spent hiring staff and generally kitting out his office. He also had to deal with a quarrel with parliamentary leaders over when the clock should have begun to run on the payment of his salary: on May 1, 2023 when he was formally appointed, or from December of that year when his remuneration package was finally agreed.

Hopefully, that distraction is now behind Mr Williams, a former finance ministry official and IMF technocrat, as he enters the nuts-and-bolts phase of being the fiscal commissioner. Dr Clarke recently signed/gazetted the order for it to come into force at the start of the new year.

The fiscal commissioner’s job, essentially, is to police, and publicly report on, the government’s fiscal programme against declared policy, and its sustainability in the context of targets established in the Financial Administration and Audit Act. These include the country’s debt-to-GDP ratio and the timetable for it to be lowered to 60 per cent.

In that regard, Mr Williams’ first outwardly facing undertaking will be his review of the Government’s next Fiscal Policy Paper, a document outlining the fiscal outlook for the coming financial year, which is tabled annually ahead of the presentation of the Budget.

Since that document became a feature of the budget process as part of Jamaica’s IMF-inspired economic reform project, its review has been done, by law, by the auditor general. But that office was designed and equipped to do financial audits of State entities rather than undertake deep economic analyses.

ROBUSTNESS AND TRANSPARENCY

The auditor general’s reviews of the Fiscal Policy Papers, by this newspaper’s assessment, were largely perfunctory, too basic and without the depth expected from such an exercise. Which is understandable.

The Gleaner, therefore, expects, and looks forward to, far deeper and more robust analyses from Mr Williams’ shop, even as he keeps within the constraints of the law’s requirement that the fiscal commissioner, in the execution of his duties, “shall only have regard to the policies of the government in this regard, and shall not consider any alternative policy”.

Indeed, this requirement for robustness and transparency is implied in the legislation that calls for the fiscal commissioner, “on at least two occasions each fiscal year”, to prepare a macroeconomic and fiscal assessment report and a statement of fiscal performance.

With respect to the former document, the fiscal commission, in keeping with its obligation to review the Fiscal Policy Paper, is supposed to provide:

• An assessment of the administration’s macroeconomic and fiscal forecasts;

• An evaluation of the announced policies consistent with legislated fiscal rules and targets; and

• An assessment of the government’s long-term debt sustainability strategy.

The analysis is to be published on the fiscal commission website within 10 days of the tabling of the Fiscal Policy Paper before both Houses of Parliament.

Nothing in the legislation, insofar as this newspaper interprets it, requires that the fiscal commissioner’s reports be submitted to Parliament before being published. That, on its face, frees it from the constraints imposed on the Integrity Commission with respect to its reports, such as, in the case of the recent past, delays in tabling the documents, thus slowing the speed with which they reach the public.

POWERFUL AND INDEPENDENT TOOL

Regarding the statements of fiscal performance, these will primarily be reviews of the Government’s budget fiscal data against targets, for the findings of which the commission, with respect to the June quarter, is supposed to publish on its website within 21 days of receipt of the data for that period. For the December quarter, the publication of the assessments will be due 42 days after its receipt of the data.

As this newspaper suggested at the time of the crafting and debate of the legislation, we would have welcomed that the commission be given the authority to assess, on an ad hoc basis, requests by parliamentarians, and the costs and potential economic impact of projects once they have been proposed or discussed in the legislature. That should still be considered in the future.

However, the fiscal commission, should it act in accordance with its mandate, represents a powerful and independent (“the commissioner shall not be subject to the direction or control of any other person or authority in carrying out the functions of the fiscal commission”) tool for keeping governments fiscally accountable, on the basis of data-driven analyses rather than intuition.

We embrace this idea, rather than depending on the goodwill of individuals, who, at some time, will demit office. There is no guarantee of the quality of the people with whom they will be replaced.