Prime Minister Phillip “Brave” Davis.
By KHRISNA RUSSELL
Tribune Chief Reporter
krussell@tribunemedia.net
PRIME Minister Philip “Brave” Davis said yesterday there will be no increase in National Insurance Board contributions until his administration is able to arrest the hardships facing Bahamians.
Mr Davis said despite it being a “watershed moment” for NIB, he knows many people are facing difficult times, adding it would be a last resort to place any more financial burden on their backs at this time.
Meanwhile, former Labour and NIB Minister Shane Gibson said yesterday that rescuing the NIB fund would come down to increasing contributions over a period of time in increments.
He said the fund had never been adequately contributed to since inception due to political opponents that viewed NIB as just another tax on Bahamians.
There has been much public discourse regarding the state of the fund this week after State Minister with responsibility for NIB Myles Laroda told The Tribune that the latest actuarial review predicted its depletion by 2028 unless urgent action was taken.
Following this he told reporters on Tuesday that contributions would likely increase within a year to sustain the fund, however he added that the increase had not yet been approved by Cabinet.
With Mr Davis’ outright rejection of this assertion it is not clear what the government intends to do concerning NIB. At the same time, he defended Mr Laroda as simply stating the facts of the 11th actuarial review.
“Let me say, I know what the Bahamian people are experiencing,” Mr Davis said in a video released yesterday by his Press Secretary Clint Watson. “These are difficult times and it would be a last resort for me to put any more burden on their backs.
“The actuaries over the last 10, 15 years have been predicting that the fund is jeopardised because of us not having raised the contributions to NIB.
“Recommendations were being made from 2003, 2004 to raise the contributions. Yes, we are at that watershed moment but I am not going to at this time put any further burden on the Bahamian people.
“We’ll see how we could be innovative and creative to ensure that we do not do or embrace such an initiative until we have brought the relief that is necessary to allow that to happen.”
He continued: “The minister of state in my office was just speaking the facts as what was said in the actuary report. They are recommending and they are urging that we do so and as was his duty he is bringing that report to Cabinet for us to look at and discuss.
“We will consider it but as insofar as what my views are on it, it’s not going to happen, not now, not until we have brought the relief to the Bahamian people and we have put to bed some of the issues that can’t make them sleep when they go to bed.”
When he was contacted yesterday, Mr Gibson said he was not surprised by the latest warning about the fund’s viability.
He said: “We knew from day one that the plan was being underfunded. When they first decided to start National Insurance and when the actuary told them what contributions individuals and employers needed to make to sustain the plan at that time they thought it was too high.
“As you know the Free National Movement at that time viewed it as another form of taxation and they opposed it and so because of all the opposition and them wanting the plan to be accepted, they decided to start at the rate they started at.
“Every single actuarial review if you look at them you’ll see a warning that unless the plan was properly funded that it would run out of money by a certain time. So, this comes as no surprise.”
Mr Gibson said various governments did not want to lose political favour, which was why contributions had not increased until 2010. However he said there must be an increase to sustain it.
“Every time you talk about increasing anything in The Bahamas where it will cause individuals to pay more, it’s a concern for the government,” Mr Gibson said.
“So, obviously you can’t have it in one bite, but you can have it in multiple bites where for instance you decide over the next 20 years it’ll go up one or two percent. I’m not sure but whatever it is you do it gradually over a period of time rather than trying to do it all at once.”
He also said: “If you look at it National Insurance has been the single greatest achievement of any government of The Bahamas. “
Asked about claims from some that NIB had been used as a slush fund over the years, Mr Gibson said: “No. If you look at it, NIB right now is worth $2bn. Where could you find to invest National Insurance funds in the country that would give a decent rate of return?
“National Insurance has so much money they have to put it in non-interest bearing accounts in the Central Bank just to have somewhere to lodge it and so if you look at the returns they’ve gotten over the years from government projects there has been a decent rate of return. In some cases returns as much as eight or nine percent. So any financial advisor who says National Insurance was used as a slush fund, I think you need to check their credibility.
“Now you’ll find the average Bahamian that doesn’t understand the amount of money National Insurance takes in and what they do with it they would probably make those statements.
“That is why years ago the government approved allowing NIB to invest overseas and you know if you do that there is a surplus of 25 percent that you have to pay to Central Bank they waived that because National Insurance had so much money that they didn’t have anywhere to invest it and so government’s investment has been very good for National Insurance over the years,” Mr Gibson said.
Comments
moncurcool 2 years ago
Here comes another spin now. Do these people talk to each other? Laroda was not reporting the actuarial, he was stating that NIB would be increased. The question was clearly directed to him about NIB increase.
Now come the spin from the OM that he was just reporting the actuarial and no NIB tax increase.
Then come the shady Gibson taking about the fund not use as slush fund and the best way to save the fund is to have incremental increase in contributions. Guess so more people like him could get a payoff.
Government needs to get out of the fund and stop borrowing from it. Period!
KapunkleUp 2 years ago
Spin is right. The keyword here is "until" in the first quote. Not surprisingly there is no comment on all the outstanding loans and missing past 5 years of financial statements.
bahamianson 2 years ago
Socialist state. Paying for public school uniforms and also lunch. What we need to promote is more responsible parenting , keeping legs closed and pants on. If you create a being , You should take care of your responsibility, not we take care of your responsibility. Sperm and egg donors need to be held accountable. Why should the goverment hold me accountable for you having countless kids? I make a choice to not have a child that I am not able to mature. Government needs to teach and promote accountability.
Sickened 2 years ago
Bam, Bam, BAM!!!! That's you hitting the nail on the head.
bahamianson 2 years ago
Thank you , sickened.
Proguing 2 years ago
Government playing good cop bad cop with the people....
sheeprunner12 2 years ago
He continued: “The minister of state in my office was just speaking the facts as what was said in the actuary report. They are recommending and they are urging that we do so and as was his duty he is bringing that report to Cabinet for us to look at and discuss. “We will consider it but as insofar as what my views are on it, it’s not going to happen, not now, not until we have brought the relief to the Bahamian people and we have put to bed some of the issues that can’t make them sleep when they go to bed.”
That in a nutshell, my fellow Bahamians, is the reason why our leaders/PMs are despicable, narrow-minded and leading us down a path of despair and destruction ........ No vision, just pandering to voters, while enjoying the trappings of the Office and not being accountable and making hard decisions.
The Tribune will then add insult to injury by getting an opinion from Shameless Shane Gibson.
sheeprunner12 2 years ago
Mr Gibson said various governments did not want to lose political favour, which was why contributions had not increased until 2010. However he said there must be an increase to sustain it.
These politicians decided to increase benefits to pander to voters without increasing the contributions since 2010 .......... And use NIB to hire their friends, family and lovers etc. The accountability falls on the Board and the Cabinet ....... they can't run from that
TalRussell 2 years ago
: - Commentary for whatever pennies it's worth: The assets of the NIB can no longer support the strain placed on it ... as even more the colony's rich lineup to collect health care payments ... whilst rich pensioners are living on, collecting monthly monies over lot longer in years...some into they high 90's ... And, regardless if they only served however briefly in the House or Senate, the state will funeral them,** ... Collectively taken together it all adds place greater strain on assets the remaining pennies left behind at NIB, ― Yes?
hrysippus 2 years ago
Pension payments in six years will cease; ,,,,, But insurance rate will not increase,,, ,,, ,This is good news for those elected.... ... ... As their pensions are not effected... .. ... .... The Politicos pensions come from the General Fund... .. ... .....The decision thus not too profound...... ... ... .. What ever happen to grassroots down the line....PM can say; "Well, I gots mine.".. . ... .. ..And what happens with I really don't care, .. .. Since I'll be retired it's not my affair,,, ,,, ,,Sigh.
Emilio26 2 years ago
Tribanon actually Shane Gibson isn't even a member of parliament anymore so therefore why are you lambasting him?
tribanon 2 years ago
ZZZZZZzzzzzzz.......
KapunkleUp 2 years ago
You are correct. Adding the ongoing budget deficits, outstanding public debt, crumbling infrastructure, government corporations always in the red and rampant corruption; there is no way NIB will last a decade without massive tax increases.
TalRussell 2 years ago
Only those comrades who would've taken a journey back in time to the early governance mandates of 1967, 1968 and 1972 under Comrade Lynden Pindling ... had caught a glimpse into why they were at the peak of brungin' about radical cross-over changes to the British colony's staunchly UBP middle class society, ― Yes?
B_I_D___ 2 years ago
Spin Dr's for sure...remember the snake tongue...current PR tactics...some fool makes a statement of policy change, everyone goes ballistic, Davis says no. But remember, this is the same person who was saying he would reduce VAT...neglected to tell you he would put VAT back on breadbasket items, which is killing the end user and the person who takes the biggest hit in the VAT model. They are quite happy to say one thing...but neglect to tell you the rest. It's the rest that is gonna bite you in the asp...Davis is a criminal defense attorney, so remember what his mind is capable of doing.
John 2 years ago
We have a lot of foreign workers that have jobs in this country. And they have high paying jobs. And, by law, they are required to contribute to the NIM fund, at least to the ceiling established by the Ingraham Administration. And many of these workers return home or are reassigned, leaving The Bahamas without making any claims with NIB. So the problem is not that NaiB is not getting enough funds, but what is being done veith those funds. If minimum wage is increased by some 30 percent this year , that translates into a 12 percent increase in NIB contributions , And as NIB phased out its non-contributor pensions and other such benefits, the financial position of the board should strengthen. Also more Bahamians are becoming more educated ( never mind then with thrirD average talk) and gaining more technical and financial experience globally. Once these people become employed and start to contribute, then the heavy drag of less skilled and less educated persons who make smaller contributions should lighten . And government needs to amend the laws of NIB to allow it to use a relatively small amount of its funds in , at least, medium risk investments, rather than have hundreds of millions sit idle in non/ interest bearing bank accounts. The banks loan out these funds and make money and NIB makes zero, Appoint persons to the NIB board who has financial and investment experience.
SP 2 years ago
You people swallow anything hook, line, and sinker! When will people learn the PLP and FNM couldn't be trusted with a bag of rotten fish.
Myles Laroda was simply told to float the information in the media to get a public response and the response was so negative the PM put a short-term end to the initiative.
However, the purpose of Larodas' announcement was just to plant a seed, which was done. So we can expect Davis to follow through with a bombshell announcement on increasing NIB taxes in the medium-term.
It's called the game of "politricks" underhandedly used by the PLP and FNM to mismanage the country's affairs and mislead the electorate for decades with the blessings of so many brain-dead loyal followers!
tribanon 2 years ago
This time will be very different. Try as they may to get blood from a stone, the corrupt and cruel Davis and Cooper led PLP administration will surely fail in doing so. Most Bahamians are now just plain tapped out and struggling to pay for food, let alone all of their many other essential needs. The misery index for so many desperate Bahamians has never been higher. Our nation and our people are in uncharted dangerous waters.
tribanon 2 years ago
It's now way too late to prevent the inevitable financial collapse of the National Insurance Fund caused by the gross incompetence and greed of successive corrupt FNM and PLP administrations alike.
From its inception the administrative costs of running the National Insurance Fund have been outrageously excessive due to its grossly over-bloated headcount combined with greedy crony consultants of every kind constantly sucking on it, not to mention the heavy toll taken by outright and unchecked fraud.
And of course, the National Insurance Fund's bank accounts will continue to be wrongfully used whenever possible by successive corrupt PLP and FNM administrations as a "go to" cookie jar to make all sorts of wasteful and inappropriate investments with total disregard of the NIB's fiduciary obligations and projected liquidity needs for our aging population.
So along comes the very same people, who for decades have played a big role in the impending collapse of the National Insurance Fund, people like Davis and Gibson, trying to now convince those of us who have been making our National Insurance contributions for many years, that we are somehow responsible for its impending collapse by not contributing enough. Talk about audacious gall !!
No matter what the very cruel Davis may now say, he will very soon be seeking to have employers and employees bail-out this defunct Ponzi scheme by way of higher, in fact exorbitant, additional contributions, combined with significantly reduced retirement benefits. But in these extraordinarily difficult times, Davis and Shameless Shane Gibson are gravely mistaken if they foolishly think blood can somehow be had from a stone.
The Bahamian people are completely tapped out like they have never been before, thanks in great part to decades of corrupt government activities of the kind Davis and Gibson are well familiar with.
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