by Linda Straker
- FROC calling for review of Fiscal Responsibility Act (FRA)
- Dr Angus Friday said time has come for FRA to be strengthened and adjusted
- Similar recommendation was in 2019 FROC annual report
The current members of the Fiscal Responsibility Oversight Committee (FROC) want the government to take the necessary legal steps to have the Fiscal Responsibility Act (FRA) repealed, and replace certain shortcomings in that legislation.
The specific objectives of this piece of legislation approved in the Houses of Parliament in 2015 are “to establish a transparent and accountable rule based fiscal responsibility framework in Grenada, to guide and anchor fiscal policy during the budget process, to ensure that Government finances are sustainable over the short, medium, and long term, consistent with a sustainable level of debt, and for related matters.”
Dr Angus Friday who is currently serving as the second chairman said that the Fiscal Responsibility Act has been essential, but the time has come for it to be strengthened and adjusted. A similar recommendation was in the 2019 annual report of the FROC which was at the time chaired by Richard Duncan.
“Thanks to the FRA there has been some level of a buffer that the Government has been able to build up which has enabled the Government to react positively during this time of Covid. However, as we have seen there is an aspect of the FRA that needs to be adjusted,” Dr Friday said during a news conference on Wednesday, 18 August 2021, during which the annual report was officially presented.
“This adjustment needs to take place in a number of different areas, so we want to uphold the idea of the FRA. We want to call for its strengthening in certain ways and we do this by calling for a repeal and replacement of the FRA,” he said. “We just want to emphasise that the FROC does not and is not calling for a scrapping of the FRA. We are calling for a review of the Act, a comprehensive review, followed by a repealing of the Act for the sole purpose of replacing of the Act that will anticipate some of the future challenges that may lie ahead,” Friday explained.
In 2015, the Grenada Government introduced what at the time was, and still is, pioneering legislation in the region on “Public Financial Matters”. This legislation was based on the concept that, in order to achieve sustainable economic development, there must be greater fiscal responsibility and discipline.
In order to achieve the required level of responsibility and discipline, there must be enhanced fiscal management along with clearly defined annual fiscal targets coupled with medium and long-term plans and policies. The fiscal targets had to be enshrined in legislation. The legislation therefore comprised the following enactments: the Fiscal Responsibility Act No. 29 of 2015 (FRA or the Act), the Public Finance Management Act No. 17 of 2015 (PFMA), and the Public Debt Management Act No. 28 of 2015 (PDMA).
The FRA created a Fiscal Responsibility Oversight Committee which is responsible for monitoring compliance with the fiscal rules and targets as stipulated in the Act and reporting to the House of Representatives accordingly.
The FROC comprises 5 members who are appointed by the Governor-General upon the nomination of the Committee of Privileges of Parliament, 4 of whom shall be nominated in consultation with the Director of Audit. The fifth person is nominated on the advice of the Governor of the Eastern Caribbean Central Bank.
The current members are Dr Angus Friday as Chairman, Zanna Bernard who is a senior economist at the Eastern Caribbean Central Bank, Anthony MacLeish who is an accountant, Shadel Nyack-Compton who is an attorney at law, and Sally-Ann Bhagwan-Logie who a retired public administrator.
