Fiscal Responsibility: A Government Commitment to Taxpayer Money Management

The management of taxpayer money is on the agenda as the Mauritian government moves forward with plans to establish a Fiscal Responsibility Act. Paul Bérenger, the Deputy Prime Minister, has indicated that this legislation is a priority for the current administration, which is part of the Change Alliance.

In its electoral manifesto, the government announced its intention to implement this act to enhance the country’s budgetary discipline and create a legal framework that ensures fiscal accountability.

There is a firm commitment to transforming this promise into a tangible reality, with the planned legislation expected to be featured in the program speech for 2025-2030.

President Dharam Gokhool will deliver this speech when parliamentary sessions resume on January 24, 2025.

A senior government official has noted that the law should be enacted as soon as possible.

The Fiscal Responsibility Act is aiming to set limits on public debt and budget deficits while requiring increased accountability from the government regarding public financial management.

The current administration believes that the financial scandals from the previous regime underscore the urgent need for such legislation to prevent similar occurrences in the future.

During a parliamentary session on December 17, Bérenger emphasized the significance of the proposed legislation, stressing its necessity for establishing clear guidelines on national debt and budgetary deficits.

He remarked, “We need to adopt a law that sets the country’s debt ceiling, the budget deficit, and mandates governmental accountability.”

While many countries have implemented laws promoting fiscal responsibility, Bérenger pointed out that enforcement often falls short.

He cited Jamaica as a model, highlighting its robust mechanisms for ensuring compliance with fiscal commitments through the establishment of an Independent Fiscal Commission.

This Jamaican model features the establishment of an independent, well-qualified commission with its own board and advisory council, which oversees compliance with the country’s Fiscal Responsibility Act.

Bérenger stated, “We are serious about this; we are looking far ahead.

The Prime Minister and I, along with others, do not want the economic crimes committed in the last five years to be repeated.

Avoiding such events is paramount, necessitating a strong Fiscal Responsibility Act and an effective enforcement mechanism, such as an Independent Fiscal Commission.”

The act is also expected to help restore balance to the national budget and reduce Mauritius’s public debt, which stood at 559.1 billion rupees at the end of June 2024, representing 83.4% of the country’s Gross Domestic Product (GDP).

This debt was significantly lower at 59.5% of GDP in 2014.

The inspiration drawn from Jamaica involved the operation of an independent commission to oversee the enforcement of fiscal laws and ensure compliance.

This commission, established under Jamaica’s Fiscal Responsibility Act, will begin operations on January 1, 2025, and will be responsible for providing independent assessments of budgetary results and influencing public discourse on fiscal policy through detailed reports and analyses.

It will include an advisory committee composed of individuals from the private sector, academia, labor unions, and civil society, alongside a fiscal commissioner tasked with ensuring transparency and effectiveness in fiscal policies.

Mauritian authorities have praised this model of independence and transparency and aim to adopt a similar approach to strengthen their own fiscal framework.

Furthermore, the Jamaican law incorporates control mechanisms that promote adherence to fiscal rules through objective evaluations of the government’s economic policies.

A government source noted, “Jamaica is a guiding light in this area.

We need a similar mechanism in Mauritius, tailored to our specific laws and realities, which we aim to develop as swiftly as possible.”

In Jamaica, the commission will offer independent fiscal analyses and play a constructive role in informing the public, thus fostering compliance with the nation’s fiscal regulations.

The establishment of this commission and its proactive role are intended to ensure sustained budget discipline and prevent mismanagement of public finances.

In Mauritius, the introduction of a Fiscal Responsibility Act aims to instill more rigor in the oversight of fiscal policies and establish a clear framework for managing debt and budget deficits.

The Mauritian government is also seeking to hold ministers and high-ranking officials accountable for the management of public funds.

However, a lingering question is whether such a law can be applied retroactively to prosecute individuals who have previously mishandled public money.

This issue will likely address the Attorney General, Gavin Glover, as he prepares the legislative text.

Source: Defi Media