Minister of Finance and the Public Service, Dr Nigel Clarke, says the Government is prepared to suspend the Fiscal Responsibility Law, if necessary, to facilitate additional interventions to curtail the coronavirus (COVID-19) outbreak in Jamaica.
“I want to assure the people of Jamaica that should things take a turn for the worse, beyond what we currently envisage and beyond all the economic measures we have put in place, we are prepared to invoke the clauses in the law that allow for its suspension,” he said.
He was delivering the closing 2020/21 Budget Debate presentation in the House of Representatives on Tuesday (March 24).
The Fiscal Responsibility Law
The Fiscal Responsibility Law forms part of the Government’s fiscal responsibility framework that operates as the centrepiece of the reforms being undertaken to improve the management of public finances.
It incorporates amendments to the Financial Administration and Audit Act, and the Public Bodies Management and Accountability Act.
Dr. Clarke noted that the updates to the law “incorporated foresight to bring well-designed flexibility in policymaking should the need arise due to dire and emergency circumstances that create a sharp economic recession”.
He said that the Auditor General would be required, by law, to validate that such conditions, as prescribed in the Fiscal Responsibility Framework, exist.
“This is not something that we would do lightly and the circumstances would have to warrant such a move. Hopefully, we will not need it, but if we do, I want the country to be assured that Jamaica has options that many of our neighbours do not,” he said.
A global crisis
Dr. Clarke noted that Jamaica and the rest of the world are facing “a global crisis of historic proportions and no one yet fully knows how this will play out. Only time will tell and it is hard to foresee what is on the horizon”.
Already, the Government has provided a $25-billion fiscal stimulus, comprising a $15-billion tax reduction and a dedicated $10-billion COVID-19 contingency provision.
Dr. Clarke noted, however, that “things could take a turn for the worse,” requiring additional intervention.
He argued that while the “waters are choppy for Jamaica and every country in the world, the ship of State is, otherwise, heading in the right direction”.
“This (COVID-19) is a test of our economic resilience and we will eventually come out ahead,” he said.
“A fiscal stimulus of the nature described… is unprecedented for Jamaica. The Government is supporting individuals and businesses. We urge all Jamaicans to support each other,” Dr. Clarke said.
“We cannot let this crisis define our future,” he added.