Last Monday, the National Assembly resolved itself into the Committee of Supply to consider the Estimates of Revenue and Expenditure for 2015. Standing Order 73.1 provides for a maximum of seven days for the consideration of the Estimates. However, the Prime Minister had proposed a motion for this period to be restricted to three days on the grounds that the Government had important matters to attend to and that the hours of the sitting of the Assembly would be extended as a compensatory measure.
The Opposition had vigorously opposed the proposal, citing long-standing practice as well as the fact that several Ministries have been reorganised. The latter would require more time for the Estimates to be properly scrutinized since there are two sets of estimates for such Ministries – one covering the period prior to their reorganisation and the other subsequent to their reorganisation. The motion was put to the vote and was passed.
Guyanese witnessed three full days of intense scrutiny of the Estimates which ended in the wee hours of Thursday morning with the passing of the budget. The original budget was $221 billion which had to be amended downwards because the associated costs of certain constitutional agencies were inadvertently included in the Estimates. These are a direct charge on the Consolidated Fund which are not required to be voted on. The agencies involved were the Director of Public Prosecutions, the Judicial Service Commission, the Public Service Commission, the Police Service Commission, the Teaching Service Commission, the Public Service Appellate Tribunal, the Public Procurement Commission, the Office of the Ombudsman, the Guyana Elections Commission, the Supreme Court of Judicature, the Parliament Office, the Rights Commissions and the Ethnic Relations Commission.
It was the Opposition that pointed out the above oversight which the Government immediately acknowledged and rectified. Another important matter that the Government had overlooked was the fact that the new Ministries had to be gazetted in order to vest legal authority in them. Again, when the Opposition brought this matter to the attention of the Government, swift corrective action was taken. As a result of these two matters, there was some degree of delay in the consideration of the Estimates.
In a previous column, I had stated that the new Administration will make mistakes, given that the major coalition partner was out of office for 23 years and the other political parties in the coalition have no experience in government. However, what is important is for there to be a frank and honest acknowledgement of such mistakes and the taking of prompt corrective action, instead of adopting a defensive approach and of “circling of the wagons”. The fact that the Government has taken the former approach augurs well for the future. Contrast this approach with what prevailed in the 10th Parliament where the previous administration refused to acknowledge its mistakes in relation to the “budget cuts” case and the unauthorized expenditure of $4.544 billion which the Courts ruled to be a violation of the Constitution.
As regards the constitutional agencies that have been given financial autonomy, it would be necessary for them to engage the services of the Audit Office to assist in the design of an appropriate accounting and financial reporting framework to ensure proper accountability for the funds allocated to them. At the end of each year, these agencies have to produce financial statements, duly audited by the Auditor General, and the related reports and audited accounts laid in the Assembly. Financial autonomy has to be supported by strong accountability arrangements if the desired benefits are to be realized.
The Chronicle headline and the Prime Minister’s reaction
Following last Monday’s coverage of the consideration of the Estimates, the State-owned Guyana Chronicle newspaper had carried the headline “Government blunders on Budget Estimates …violates laws assented to by President Granger”. The independent daily newspaper, the Stabroek News, ran a similar headline, “Gov’t flayed over budget estimates”. The headlines were in relation to the two issues referred to above. The Prime Minister, whose responsibility relates to information, was reported to have expressed concern that a State-owned news agency should carry such a headline and that a more appropriate wording would have been “Government-Opposition compromise on Budget Estimates”. He has also reportedly instructed that all of the newspaper’s headlines should be forwarded to the Government Information Agency (GINA) for clearance before publication. Needless to mention, the vetting of a headline cannot be done in isolation, and the full article will have to be considered first.
While the Prime Minister’s reaction is an understandable one, it does not appear appropriate for him to express his concern to the reporter. Perhaps, it was an informal exchange. However, the Prime Minister is the subject Minister, and like all other Ministers, is responsible for policy. The newspaper is managed by a separate legal entity, the Guyana National Newspapers Limited, which has a board that provides the necessary oversight of the management of the company and of operations of the newspaper. If the Prime Minister has a concern about a particular headline that the newspaper carried, it would be entirely appropriate for him to discuss the matter with the Board. He should not go beyond that. Perhaps, it would be appropriate for the Prime Minister to issue policy guidelines following consultations with the Board, and for the latter to ensure that the management of the newspaper follows those guidelines.
If it is true that the Prime Minister has instructed that all headlines appearing in the Chronicle newspaper must first be vetted by GINA, such action will not only undermine the authority of the Board but will also be seen as an act of political interference. It will also be a retrograde step, considering that the Prime Minister had publicly declared that there will be no such interference in the management and operations of State media houses.
Over the years, several Guyanese had to endure the atrocities perpetrated by the Guyana Chronicle and the National Communications Network in terms of vilifications and character assassinations of independent-minded persons who had the courage and who saw it as their duty to speak out on issues of governance, transparency and accountability. Even the Prime Minister, when he was an Opposition member, had to bear the brunt of such attacks. One looks forward to the Prime Minister being in the forefront in effecting the necessary changes to the management and operations of State media houses without being swayed by political considerations.
The least Guyana can afford at this juncture of its history is for State media to continue to be instruments of propaganda for the ruling party. Perhaps, the time has come for us to dispense with such services if we truly believe in democracy norms and values and their associated tenets of good governance, transparency and accountability. An upright, open and transparent government has no need for State media and should have no fear of what is reported in the private media, be they independent or Opposition-controlled/influenced. Government officials can always explain themselves if questions are asked.
Bailing out the National Insurance Scheme
The Minister of Finance has stated that in view of the financial difficulties being experienced by the National Insurance Scheme to honour its commitment to beneficiaries, the Government is considering the transfer of funds to the Scheme. In accordance with Section 34(2) of the NIS Act, if there is a temporary insufficiency in assets of the Fund to meet liabilities, the shortfall is met from moneys provided by Parliament as an advance which must be repaid as soon as possible. This in effect means that any advances given must be repaid within 12 months. There is no provision for the Scheme to be provided with a loan from the Consolidated Fund.
Section 33(5) of the Act provides for the NIS Board to invest in securities approved by the Cooperative Finance Administration (COFA), and an annual report of such investments is to be presented to the Assembly. The Scheme has made the following two controversial investments:
$6 billion in Colonial Life Insurance Company (Guyana) Inc., representing 20% of the Scheme’s investments. This amount was transferred to CLICO’s subsidiary in the Bahamas which reportedly invested the money in Florida real estate. The company has since been liquidated. Five years on, in all probability recovery of this investment is remote, and therefore those responsible for what the Minister deemed to be an act of recklessness, should be held personally liable; and
$950 million in preferred shares and other shareholdings in the Berbice Bridge Company Inc. which were bought from NICIL in 2013. To date, the Scheme is yet to receive any dividends on its shareholding.
In 2011, the NIS registered its first ever deficit of $371 million, with expenditure exceeding income. According to the Minister, the deficit persisted in 2012, 2013 and 2014 and came in the wake of several actuarial reports which have warned that urgent steps must be taken assure the viability of the Scheme. It should be said that any bailout using the resources of the Consolidated Fund will only be a temporary measure. If the Scheme is to survive and to once again become financially viable, it will have to undergo fundamental reforms consistent with the recommendations of the actuaries.
