Examination of the Components of the Fiscal Policy Paper FY2020/21 Interim Report, which was laid before the Houses of Parliament on October 06, 2020
The Auditor General has examined the components of the Fiscal Policy Paper (FPP) FY2020/21 Interim Report, laid before the Houses of Parliament on October 6, 2020 in accordance with Financial Administration and Audit (FAA) Act. The Report met the requirements under the Third Schedule and included the minimum content under the Fiscal Responsibility Statement (FRS), Macroeconomic Framework and Fiscal Management Strategy (FMS).
Section 48B (6) of the FAA Act requires the Auditor General to examine the components of the Fiscal Policy Paper and provide a report to the Houses of Parliament indicating whether: –
a) the conventions and assumptions underlying the preparation of the Fiscal Policy Paper comply with the principles of prudent fiscal management specified in Section 48D:
The Auditor General reviewed the FPP FY2020/21 Interim Report in the context of the FAA Act that was amended in May 2020 to enable a suspension of the fiscal rules for FY2020/21, given that the required fiscal balance to achieve the debt/GDP timeline could not be met due to the adverse impact of the COVID-19 pandemic on economic activity. Conventions of prudent fiscal management require a realistic assessment of risks that could jeopardise the achievement of the fiscal targets, to enable appropriate risk mitigating measures to preserve the broader policy objectives. Hence, given the continuing global COVID-19 pandemic and implications for Jamaica’s fiscal outlook and the medium-term, the Auditor General sought to identify whether the macroeconomic assumptions were realistic, such that the First Supplementary and medium-term estimates would be based on reasonable revenue projections.