Public Sector Loan Act passed without Opposition support
The government’s decision to seek Parliament’s approval for a loan of over $100 million, one month ahead of the 2021 Budget Presentation, “smacks of some desperation in the government trying to find funds”.
This was the view presented by Opposition Leader, Dr Godwin Friday in Parliament on Monday when the Public Sector Loan No 2 Act (2020) was successfully passed in the House of Assembly without support from the Opposition.
Camillo Gonsalves, the finance minister tabled the Bill during Monday’s sitting, noting that it is one that is familiar to most parliamentarians as it is one that is brought at least once yearly to secure financing for capital expenditure and spending of the Public Sector Investment Programme (PSIP).
He added that it is the hope to raise funds for 2021 in the amount of EC$125 million by way of bonds, in or out of St Vincent and the Grenadines on the best and most favourable terms that can be obtained.
Gonsalves noted that a PSIP Bill was brought to Parliament in January 2019 for $100 million and was followed by a second one in October of that same year, for $50 million.
He also noted that a Bill was brought in January 2020 for EC$100 million.
“We are going about a month earlier than usual with this Bill, essentially so that we can get a jump on the financing for the 2021 budget season,” the finance minister said by way of explanation in Parliament on Monday.
Gonsalves further explained that: “We have to schedule our offerings on the regional securities market with other countries in the Eastern Caribbean Currency Union that also seek financing on the regional market and it’s better to get this legislation done early so as to optimise the timing, not only for going to market…but the commencement of what will be a very critically important public infrastructure programme in 2021.”
But Friday said that after giving thought to the issue and hearing the finance minister’s rationale and explanation, he was not satisfied and therefore would not support the passage of the bill.
“I didn’t come here today to pick a fight, but I understand that the government has a need for money – in fact the rushing of this Bill now, the fact that it wasn’t on the order paper before and now it’s here and all of a sudden you need this money, it smacks of some desperation in the government trying to find funds,” the opposition leader said in his contribution to the debate.
Friday questioned what the $125 million was going to finance, especially since the budget had not yet been presented in Parliament.
And because lawmakers did not know what was in the Estimates, he said Gonsalves was essentially asking for a big cheque without the details of what it would be spent on.
“Now if you say it don’t matter because we’re going to do the Estimates, then that is an even more serious breach in my view, of what is the accountability procedures in this Honourable House because when we approve the Public Sector Investment Loan, when it is brought to the House, it is mind, in my understanding of the process from many years in the House, that it will…finance public sector programmes going forward, the investment programmes, usually capital programmes,” Friday said.
The finance minister provided explanations in the House this week, noting that when the Bill is brought during budget time, funds do not end up being borrowed until a month later.
Gonsalves added that by bringing the Bill earlier, there will be an opportunity to borrow immediately as opposed to waiting thereafter.
But Friday said it is not sufficient to say that it is a matter of timing and convenience.
“We have come to this house many times Madam Speaker and have raised issues about the accountability measures, the abuse of the overdraft provisions, the failure to bring supplementary estimates to this Honourable House and supplementary appropriation bills, the abuse of special warrants over the years and we are letting these accountability and transparency processes slide because it’s convenient,” he said.
The opposition leader proffered that it is not how business should be conducted in the House of Assembly.
“Why can’t we go through the normal process of passing the loan and raising the money through the bonds, whatever measures we use and we continue the financing of the public programmes in due course, as was done before, even under this government? Whatever time it takes, that’s normally how it’s done. What is so special about now that this Bill in particular, that is to invest in public programmes must be done pre-emptively?” he said.
The Public Sector Loan No 2 Act (2020) was one of several bills passed during Monday’s sitting of Parliament.
Other lawmakers on the opposition side of the House including member for East Kingstown, Fitz Bramble and member for Central Kingstown, Major St Clair Leacock also contributed to the debate.
Prime Minister Dr Ralph Gonsalves and Senator Julian Francis made contributions as well before the Bill was passed.