Premier and Finance Minister, Hon. Dr. Orlando Smith.
Photo Credit: BVI Platinum News
In the midst of concerns that the Territory has not honoured at least one element of the Protocols for Effective Financial Management, Premier and Minister for Finance, Dr. D. Orlando Smith has assured that Government will table the enhanced Public Finance Act at the next sitting of the House of Assembly.
The protocols signed on April 23 by the Premier on behalf of Government and Mr. Henry Bellingham, the United Kingdom Minister for the Overseas Territories call for the passage and implementation of the enhanced act by August 2012.
According to the protocols, "Subject to the agreement of the House of Assembly and the assent of the Governor, the enhanced Public Finance Management Act will enter into force by August 2012."
During a live call-in edition of Public Eye, the Premier said that Cabinet has already reviewed the new provisions. He said that after the provisions are tabled, they will be debated and passed at the next sitting of the House.
The next sitting of the House of Assembly is Monday, September 3.
In a recent interview with BVI Platinum News, First District Representative, Hon. Andrew Fahie pointed out that in the document, the Premier promised the UK that he would have passed an enhanced Public Finance Management Act by August 2012. However, Hon. Fahie said this has not been done as yet, but rather the House of Assembly was prorogued.
"And the UK obviously is holding the Territory or keeping our hands to the fire to have this task on what the Premier agreed with them, but instead of passing this the Premier prorogued the Honourable House and the UK was looking for this to be passed by August, and it is in the document," Hon. Fahie stated.
He added, "...They didn't say what kind of [penalty], what are they going to do - suspend the Constitution, they didn't say what are they going to do...I found it a paradox that the Honourable House quietly prorogued knowing that there was a deadline to produce this new Act with the UK by August 2012. I need to know what happened and what kind of penalties the UK is looking to bring on us or what are the consequences for this kind of action that leaves a lot to be desired based on what you negotiated and signed."
According to the financial protocols, the Government of the Virgin Islands has therefore committed to ensure that the enhanced Public Finance Management Act is adhered to at all times.
Meanwhile, during the call-in program, Premier Smith explained that the Government of the British Virgin Islands has agreed to a set of protocols which will assure the people of Territory that the Government will manage their finances effectively and be accountable and transparent.
He explained that one of the significant things with the protocols is the whole question of liquid assets. The Premier noted that from time to time the Territory has been in breach of the liquid assets under previous agreements.
Premier Smith stated that probably last year and probably the year before the Territory was in breach of the liquid assets and noted that it was one of the reasons why the CDB loan was not finalized with the British Government.
"I will say based on what is contained now in the protocols, we are in breach, but we also have an agreement that by 2015 we will meet all the requirements of the protocols," the Premier assured.
He further explained that under the previous borrowing guidelines, there was also a requirement to have at least 25 percent of the annual revenue in savings. According to the Premier, what is required now is that the 25% liquid assets are not allocated to any expenses.
"This means that this is a little greater challenge to have that 25% of the recurrent budget in liquid assets. It is something that once we have it, it will be important. If the country comes to a hard time and the recession becomes even worse, it is important to have certain amount of money laid aside to take the country through at least three months of expenditure. If this money would have been allocated to another purpose, then that money would not be available," the Premier explained.
He stated that once the protocols are satisfied, the Territory will not need to have discussions on a project by project basis.