Victor J.N. Cummings, Contributor

Cummings

Now that a budget has been tabled in the House of Representatives as required by sections 115 and 116 of the Constitution of Jamaica, it is time to revisit an old argument - amending these sections of the Constitution and allow a longer budgetary cycle. The premise is that moving the Jamaican budget to a three or five year cycle would help shift the emphasis from the immediate, and often repetitious, year-to-year battles over budget resolutions and spending bills to the broader questions of strategic planning, oversight and reform. With the challenges that our society is facing and will undergo, it is appropriate to consider new reforms which will help us prepare for these challenges. Putting the Budget expenditures and oversight on a three or five-year cycle that would coincide with a national development plan makes excellent sense for a number of reasons.

A political statement

To begin with, the parliamentary budget process is as much a political statement as a management tool. In addition, the private sector and most government ministries and agencies plan on a three or five-year basis. Consequently, it makes sense for Parliament to adopt a single statement, use it for guidance throughout the remainder of the three to five period and change it only if economic or political events make it completely unworkable. Overall, decisions on how much spending to permit, how much entitlement expansion or reduction to permit, and how tax policy should be changed are matters that should not alter much within a five-year period. In addition, one of the most attractive features of three or five-year budgetary cycle is that it would lessen the opportunities for fiscal irresponsibility.

Parliamentary oversight

A major advantage of a longer budgetary cycle is that it would enhance the opportunities for community involvement and parliamentary oversight. Ideally, the first months of a new budget cycle would be spent on consultation with communities, setting priorities and establishing funding levels. The remaining period would be devoted to long-term planning, implementation and oversight.

Granted, the work of planning and oversight is a more painstaking, and perhaps not as immediately rewarding task than allocation and spending. Nevertheless, the key question in this regard is whether a longer budgetary cycle, if successfully implemented, would improve the current situation. Perhaps one of the strongest arguments in favour of a longer budgetary cycle is that so many Jamaicans have come to believe that the annual, repetitive tussle over the Budget makes it impossible to engage in any meaningful discussion and oversight.

It is also important to note that the potential benefits of three or five-year budgeting are not limited to parliamentary oversight. A longer budgetary cycle would improve the efficiency and efficacy of government. Too much time is consumed in repetitious budget preparation, justification and appropriation. This energy could be more usefully put to work on improving government performance. It would be far better to free up time to absorb the new information, plan and implement than to continue the amount of time and energy that now goes into yearly renewing or disputing budgetary decisions that often have been made final only a few months earlier.

If a longer budgetary cycle results in greater community involvement and Parliament having more time to engage in greater oversight, then the Jamaican people should expect to see a more productive government in which performance counts, and programmes are not simply continued from year to year simply because no one has the time to ask whether or not they are still needed. The Jamaican people would support moving to a longer budgetary cycle. This would send a powerful message to the people that there is interest in consulting on the Budget, monitoring, and reforming the way in which tax dollars are spent.

Multiple-year funding

Most of the Budget accounts on the annual allocations already provide multiple-year funding. Advance appropriations are already made for programmes, such as education and national security, where there is a clear need to have funds immediately available at the beginning of the fiscal year. Several agencies already have multiple-year budgetary plans.

In considering a three or five-year budgetary cycle, it is fair to ask whether the priorities established in the first-year would hold up for subsequent years. And if adjustments were required, how would Parliament respond? First, there is little reason why priorities established at the beginning of each cycle ought not to provide a workable guide for a three or five-year period. Second, on the discretionary side of the Budget, a longer budgetary cycle would create the need for adjustments from time to time. But the usual fiscal ups and downs on a year-to-year basis should not be so great as to necessitate major changes. Third, should there be substantial and unanticipated changes in the economy, alarming international developments or extraordinarily severe natural disasters, Parliament, in consultation with the communities, must respond.

Moving to a longer budgetary cycle would require establishing some regular system for considering supplemental budgets. The difficulty would be not whether there could be a timely and appropriate response to new priorities during the three or five-year budgeting cycle, but rather how to hold to a minimum the number of such responses and their costs. If urgent supplemental budgets for routine and unnecessary increases are permitted to become the commonplace rule rather than the rare exception, the rationale for moving to a longer budgetary cycle would have been defeated.

A key element of any transition to longer budgetary cycle would, therefore, be establishing a way to ensure, or at least protect, against the overuse of supplemental budgets. While there is always a danger that supplemental budgets could get out of hand in a longer budgetary cycle, this need not happen if:

Realistic spending assumptions are used in the Budget process.

Rosy economic assumptions are avoided.

Regular mechanism put in place to consider any updates.

Once we have moved to a longer budgetary cycle, the likelihood will increase that necessary, sudden, urgent, unforeseen and temporary needs will arise after the three or five-year development plan and budget have been adopted (i.e., emergency spending). A longer budgetary cycle would encourage communities and Parliament to plan ahead for emergencies. A reserve fund should be set aside to provide budgetary resources in advance of emergency needs and would eliminate the need for supplemental emergency appropriations.

No amount of reforms will cure all of the problems with the current system. This should not deter Jamaica from trying to reform the system in a positive way that is responsive to the communities, challenges ahead and that addresses the frustrations so many have expressed with the current system. The time to begin is slipping away. As part of constitutional reform, we must put this issue on the table.