Basseterre, St. Kitts (CUOPM) – Financial resolutions submitted by the Prime Minister the Rt. Hon. Dr. Denzil L. Douglas in his capacity as Minister of Finance is nothing new and is in keeping in keeping with the Finance Administration Act of 2007 which means that on an annual basis the Minister of Finance must come to the National Assembly and request approval for the renewal of the Government’s short term borrowing since these funds may be needed during the year to meet the financing requirements of Government to administer the affairs of the country.
Acting Financial Secretary Mrs. Hilary Hazel said the Act provides for the control and management of public funds, the authorization of expenditure, the raising of money by government and the control of the public debt and the giving of guarantees.
“We must also start from the premise that this is a modern piece of legislation which provides in a comprehensive manner, the legal basis for operating the financial management system in the public sector in a modern global information age. Most specifically we should take a look at part 8 of the Act which provides for Public Debt and Guarantees because the short term resolutions 2014 are actually authorized by this Act,” said Mrs. Hazel on Freedom FM’s “Good Morning St. Kitts and Nevis.”
She pointed out that Section 48 it states that money shall not be raised on the credit of the government except under the authority of an act of Parliament or of a resolution of the National Assembly.
“And in this case I am quoting because you have to give at least the legal basis, but what this simply means in layman terms is that the Minister or the Ministry of Finance has no authority to exercise borrowing or guarantee of anything on a short term basis without our annual basis going to the National Assembly to seek approval,” she said.
She further explained that once the Ministry has sought and received the approval of a Parliament or the National Assembly, the interesting thing about this is that there is not necessarily an authorization or an intention of the government to enter into any borrowing.
“In the case of 2014, we are actually somewhat far from this reality of a terminology used to say that it is new borrowing. Let me explain a little detail about what the figures. Note for example in relation to Treasury Bills we have had a system of raising for many years, short term finances in Treasury Bills at least as far as I can remember working within the Ministry of Finance system which dates back to about 20 years,” she pointed out.
“Treasury Bills we have and the Minister, sought to have the approval of the National Assembly for contracting Treasury Bills up to EC$360 million. This has been consistently so at EC$360 million for quite a number of years. As a matter of fact, the last time I checked, I think it was sometime last week, the level of the Treasury bills was at EC$326 Million and so we have no intentions to locks out on it and for information as well, we have actually had applications in terms of the Treasury Bills for persons to invest and we have not as a position of the government been taking on a new issue,” she explained.
She added that the authority that was being sought was to be able to roll them over, because once people are holding the Treasury Bills on the annual basis, it is required that the National Assembly approves those issue.
“Persons need to be ensured that they are protected once they are holding paper for the government that they can be assured that they will be able to have their money at the time of maturity,” the acting Financial Secretary said.
“I just want to reiterate that the resolution for short term borrowing is nothing new. It is simply an annual authorization to roll over or to renew the short term borrowings since we are not asking for approval to borrow more in the short term,” she explained.