…Min Jordan says fiscal space does not permit large allocations

THE current fiscal space does not allow 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 14:00hrs sitting of the National Assembly, which was set to consider estimates for the agencies. The Finance Minister explained that the Fiscal Management and Accountability (Amendment) Bill passed in the National Assembly in 2015 bolsters the financial independence of the various constitutional agencies.

As such, under the existing law, constitutional agencies are not required to consult with, or defend their budgets before the Ministry of Finance as was done prior to 2015. “All they are required to do, hopefully, is to follow the circular, because they are bound by the budget circular,” the minister said.

The proposed budgets by the constitutional agencies are submitted to the Speaker of the National Assembly and the Finance Minister.
Based on the existing fiscal space, the Ministry of Finance, after reviewing the proposed budgets for the agencies, is required under the law 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 propose 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, only the National Assembly; 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 the bill being signed into law…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, whereas other agencies would have been restricted to cash flows,” the finance minister explained.

He made the statements even as the National Assembly was preparing 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 budgets of the magnitude constitutional agencies claim that they would like to spend in the upcoming year.”

He said the same can be said for budgetary agencies, noting that in 2017 there were requests for “couple billions of dollars,” when the government could only muster half or less than half of the requested sums. The finance minister assured the media that almost 90 per cent of the proposed budgets for the constitutional agencies have been approved.