Edmund Campbell, Senior News Coordinator

Opposition Leader Bruce Golding has accused the Government of breaching the $650 billion ceiling of the Loan Act.

The charge came yesterday, during a debate in the House of Representatives to increase the maximum amount that can be borrowed by the Government to $700 billion. The legislation was subsequently passed.

Mr. Golding argued that it was pointless having a law which sets the maximum amount to be borrowed while Government ignores the law. Further, he said Parliament "retroactively legitimised" the breach.

Mr. Golding told his colleagues that 75 per cent of the country's debt was owed to commercial banks, both locally and overseas. He said these entities could not offer debt relief, similar to that provided by the multi-laterals. However, Dr. Davies made it clear that the Government was not seeking debt relief.

He said the Government was committed to honouring its debt obligations.

In his remarks, the Opposition Spokesman on Finance, Audley Shaw, said the Financial Services Commission's (FSC) actions against Olint, an entity which offers attractive interest rates, were unacceptable. He warned the Government not to suppress entrepreneurial drive by using the power of the state.

Mr. Shaw contended that, in a free market economy, persons should be allowed to take risks and benefit from the gains or suffer the consequences of risk-taking actions.

Responding to Mr. Shaw's comments, Dr. Davies said the FSC's actions against Olint were consistent with the law.