A lawyer and opposition lawmaker is accusing the government of misbehaviour in office over the use of government overdraft.
Kay Bacchus-Baptiste, who is a senator and candidate for the main opposition New Democratic Party (NDP), said on her party’s “New Times” programme on NICE Radio on Friday that the law is clear on the matter.
In his Feb. 4 contribution to the Budget Debate, Opposition Leader Godwin Friday said that the government was breaking the Finance Administration Act on three counts.
He said that the government was exceeding the overdraft facility that Parliament had authorised it to run at a commercial bank.
Also, the government did not repay the overdraft by the end of the financial year in which it was used, Friday said.
Further, the government was converting to a loan, without parliamentary approval, the overdraft amount in excess of what parliament had authorised.
However, Prime Minister Ralph Gonsalves had said that Friday does not understand the law and has further stated that every government has acted as he did.
And, Bacchus-Baptiste said that what Gonsalves said was “a little more than just that he erred, because this man is a legal trained person and he knows what the borrowing law says”.
The senator noted sections 44 and 45 of the Finance Administration Act.
The law says that no money shall be raised on the credit of the government except under the authority of that law or another act or a resolution of the House of Assembly.
“Clearly government borrowing power stems from an Act of Parliament or the Finance Administration Act. So, you must come to the House of Assembly. Why? Because these are the people who, under the Constitution, are given the power to lead and to make decisions,” Bacchus-Baptiste said.
She noted that Section 45 of the Finance Administration Act says that the minister may in a financial year, when authorised by resolution of the House of Assembly, borrow money to meet current requirements from a bank or other financial institution by means of advances to an amount not exceeding in the aggregate, the sum specified in the resolution.
Subsection 2 says a resolution referred in subsection one shall have effect for a period not exceeding 12 months.
Subsection three says the power to borrow money by means of advances from a bank or other financial institution conferred upon the minister by resolution in accordance with this section or in pursuance of any act may be exercised by means of a fluctuating overdraft.
“So that the power is there to borrow but you have to borrow within the confines of the law, or you would be acting illegally, ultra vires,” Bacchus-Baptiste said.
“And I would say it would amount to misbehaviour in public office. You cannot just go willy-nilly and borrow. Imagine if you are the accountant or someone in charge of finance in a company, and you go and borrow money outside the authority to borrow it, you could be facing real serious, serious problems.
“And this is what our government has done…”
She said that the government extended the period in which the overdraft must be settled.
“But what is even more egregious is that they went over the limit set by they, themselves, in Parliament — high, high limit of $50 million. That’s an extremely high limit in comparison to what it was in the past….”
Bacchus-Baptiste also said that after exceeding the limit, the government without authority, converted into a loan.
“… we’re the ones going to have to pay it back, paying interest …” Bacchus-Baptiste said and raised questions about why the bank allowed this to happen.
“… it is clear that there is a limit and they’ve been borrowing more than that. And I don’t know why Vincentians are not more appalled by this, you know, because, too, if you can do something like that, so boldface, what else would you do with the people’s money?” she said.