Constitutional agencies have absolute freedom except allocation of resources
Minister of Finance Winston Jordan
Minister of Finance Winston Jordan

…Min Jordan says fiscal space does not allow for large budgets

The current fiscal space does not allow for the Finance Ministry to grant wholesale budgetary proposals put forward by the various constitutional agencies, Finance Minister Winston Jordan has said.

Jordan, made the statement Wednesday afternoon during a news conference at Parliament ahead of the 14:00h sitting of the National Assembly, which is expected to consider the estimates for the agencies. The Finance Minister explained that constitutional agencies, under the existing laws, are not required to consult with the Ministry of Finance because there are no longer operate under Fiscal Management and Accountability Act as was done prior to 2015.

However, based on the existing fiscal space, the Ministry of Finance, after reviewing the proposed budgets for the agencies, is required to make necessary recommendations with supporting reasons to the National Assembly for consideration. “The constitutional agencies have absolute freedom except when it comes to the determination of how much resources are available. The constitution gives the power of that to the Minister of Finance not a constitutional agency,” Jordan explained.

Jordan said like every other agency, constitutional bodies are required to proposed budgets, but the Ministry of Finance must recommend allocations based on the current fiscal space. “Almost always these budgets are wish lists. When you look at some of the budgets and you know the circumstances of Guyana with its absence of critical skills, the absence of critical resources…if you were to put together a decent procurement plan many of the projects they claim they would like to do would never get done,” he said.

Minister Jordan noted that once a constitutional agency’s budget has been approved it cannot be altered by the Finance Ministry, and as such, it is important to appropriate funds based on the existing fiscal space. “Once the budget of a constitutional agency has been passed by the National Assembly, it is appropriated within 28 days of that passage…So can you imagine a budget of the size of GECOM is $6B, immediately in January all $6B has to be released to GECOM…So even if you got a revenue disaster let’s say June, they would have spent as they see fit where as other agencies would have been restricted to cash flows,” he explained.

His statements come as the National Assembly prepares to consider the budget proposals for Constitutional Agencies. “So when you come today, and you see me give my standard, it is not just a standard answer…It is an answer that says look you have a salary of a $100,000 that’s all the resources that you have, you would like to spend $150,000 but unless you see where the $50,000 is coming from, you have to cut your budget to suit your salary of a $100, 000,” he explained.

The minister added: “That is no different than when I get up and say the fiscal space does not allow me to entertain budget of the magnitude constitutional agencies claim that they would like to spend in the upcoming year.”

The Finance Minister assured the media that almost 90 per cent of the proposed budgets for the constitutional agencies have been.

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