Cabinet approves independent fiscal council

Cabinet has approved the establishment of an independent fiscal council as part of measures to strengthen Jamaica’s Fiscal Responsibility Framework.

The move is consistent with plans by the Government to secure Jamaica’s gains under successive economic reform programmes with the International Monetary Fund and build on the success of domestic partnership initiatives.

A fiscal council is a permanent, independent, non-partisan institution created by legislation and staffed by competent, experienced and technically proficient persons who help to promote economically sustainable fiscal policies across political cycles.

Speaking today, Finance and the Public Service Minister Dr Nigel Clarke said the Government has procured the services of experienced international experts who can help to develop the council’s design.

Clarke said the establishment of a fiscal council offers several advantages.

“Fiscal councils foster greater transparency around fiscal policy by having legislated access to economic data, having sufficient analytical capacity and by providing unbiased information to the public,” he explained.

He argued that it will deepen democratic accountability, adding that it will alter the disincentive structure in the political economy by raising the cost of unsound policies or policy proposals.

“In order to preserve… credibility, they have to be non-partisan in all of their activities; they (must) not engage in mission creep (gradual shift in objectives), and understand that fiscal councils are not policymakers and shouldn't’t try to be. Fiscal councils only offer a second opinion,” Clarke noted.

The finance minister said the focus of the council in Jamaica will be guided by the availability of resources.

“The principal objective of an independent fiscal institution in Jamaica would be the guardian, interpreter, and arbiter of Jamaica’s fiscal rules. A Jamaican fiscal council could monitor the compliance with the [fiscal responsibility] rules and keep the public informed on economic matters according to a scheduled timetable,” he noted.

Clarke added that the Government will be undertaking a consultative approach to the design of the fiscal council. 

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