ARE we really serious about ensuring the brightest possible future for The Bahamas?
The question is prompted by the continuing saga of unpaid student loans. It’s far from a new problem, with the task of going around, cap in hand, to borrowers now falling to Miriam Emmanuel.
It seems a thankless task. The Education Loan Authority has sent out letters, made phone calls, all inviting borrowers to “do the right thing” and pay back what they owe. It’s a simple request, really – just asking people to do the right thing. Is that so difficult?
There’s even an incentive programme, set up in February 2016, to encourage repayments. It’s all encouragement – saying please, offering incentives. It seems there are an awful lot of carrots being offered and not enough sticks.
What are the consequences of not paying? And why does it seem that not paying is a widespread problem in The Bahamas?
When you borrowed the money in the first place, it was on the condition you paid it back – it wasn’t a gift.
Just this week, as well as student loans, we have heard complaints from straw vendors saying the government is being heavy handed with its demands that vendors pay up what they owed.
Water and Sewerage Corporation chairman Adrian Gibson, meanwhile, said his corporation is now taking a no-nonsense approach to recovering debts. “If you owe the corporation, expect that you will pay. If you don’t pay, you are disconnected, simple as that.”
Simple sounding, indeed – but why was it ever any different? How did we get to this something-for-nothing culture? And what are the real costs to the country?
As the FNM sucked in its collective breath before telling the country VAT was going to have to go up, one of the other options for increasing the money in its coffers was Real Property Tax collection. Sure, the Budget had some measures on property tax, with increases on foreign-owned vacant land, for example, but it was the speech by Deputy Prime Minister Peter Turnquest that was most telling, as he told Parliament: “The Real Property Tax system has long been acknowledged to be antiquated and inadequate to its mandate and mission.”
He freely admitted a properly functioning system could bring significantly more revenue, and that underpayment and avoidance of paying property taxes was a huge problem.
We’re not talking small sums here – we’re talking tens of millions. The Budget measures Turnquest did introduce he expects to bring an extra $80m. But again, why is non-payment of what is owed tolerated? Why do people feel they don’t have to pay their bills?
It’s one thing if someone is struggling to pay – and here we feel sympathy for those whose belts are already tight. Those straw vendors struggling to pay their bills, for example, should be offered every opportunity to agree a satisfactory payment plan. But at the end of the day, pay they must.
Every time the country leaves money on the table, it means the pockets of the Treasury are that much lighter. And so we end up with the increase in VAT, where we all find our pockets lighter in return.
The case of student loans is particularly difficult, however, in that students who have just finished school and those following behind them are being denied an opportunity because those who went before them have failed to honour the deal.
It’s a simple enough deal – the government gave them money to help them in their studies, and they pay it back afterwards – but that deal has often been broken.
The student loan programme was established in 2000 – but suspended nine years later due to the high rate of delinquency as people failed to pay back what they owed.
With a trickle of money coming back in, there was a shortage of funds to offer to the next wave of students.
The incentive scheme had, by June, seen 498 borrowers pay off their loans, and they are to be applauded, but many more bills went unpaid – so much so that Miriam Emmanuel said she couldn’t say how much was still owed.
The hardly spoken solution is, of course, taking people to court to pay up – but that has been a politically unpalatable suggestion for more than one government. Back under the Christie administration, stern letters were also sent out, but without a threat of action, many too went ignored.
Mrs Emmanuel acknowledges the possibility of a legal solution – but wants one that “works for both sides”.
It’s easy to imagine that concerted legal action against thousands of loan recipients would be a recipe for disaster at the polls for whichever party initiated such action – who would vote for the party that took you to court for the bill that the other party ignored? But at some point, don’t we have to take responsibility for the bills we have run up? Look around the world and see what happens elsewhere. Students borrow money and when they start work an attachment on their earnings immediately comes into effect on the payroll to recover the loans. Why can’t that happen here? It’s just nonsense that we allow this to happen.
Perhaps we can take some inspiration from a former president across the water – John F Kennedy in his 1961 inaugural address said: “Ask not what your country can do for you – ask what you can do for your country.”
More to the point, let us ask what we can do for our country’s children. And the first thing we can do is to pay our bills.