August 22, 2014

The NIS loan – a symptom of the economic times

Fri, Aug 22, 2014

If all the political posturing in the different contributions to the debate pertaining to the Resolution moved by Government, earlier this week, to liquidate outstanding contributions owed by the Government to the National Insurance Fund were stripped away, we would be left with just a few keys points.{{more}}

The Government failed, over a period of several months, to pay both the employer and employee contributions to the National Insurance Service (NIS), resulting in an outstanding amount of $15 million; they didn’t pay because cash was limited and other payables were given greater priority than the NIS payments; the Government has now made arrangements for the outstanding amount to be paid over a 10-year period.

Several members of the Government and Opposition made contributions to the debate when the Resolution came before Parliament on Tuesday, and except for differences as to why Government found itself in a situation of being unable to pay, at the root of it, the parliamentarians were basically saying the same thing.

There is nothing positive about an employer, any employer, being in a position where they are unable to pay their employees’ NIS contributions. The sustainability and strength of any social security system depend on the contributions of its members, and should stakeholders fail in their responsibility to their employees, the entire system could be compromised. It is therefore commendable that the Government faced its responsibility head on and took steps to rectify this grave situation, before the situation had become critical.

Parliamentarians may disagree about the degree to which the current global economic crisis and the series of natural disasters which have befallen us in the last four years have affected our economy, but no one would say that our economy and ability to cope have been unaffected by these two factors.

The last natural disaster, the floods of December 2013, were particularly brutal on our people and the economy. Twelve persons were killed; hundreds were displaced; livelihoods washed away. The proactive stance taken by the government to provide housing and other assistance for the hundreds who were displaced or affected came at a significant cost to the government, assistance from foreign governments and agencies, notwithstanding.

Officials in the Ministry of Finance must have, for the last three or four years been playing a delicate balancing act in determining how to use whatever cash came to hand. It cannot be easy to make decisions about which bills to pay and which to defer, in a national context. At least, no public servants have been laid off and salaries, so far, have been paid every month.

These are challenging times, and they would be challenging for any government, whether it be the Unity Labour Party, the New Democratic Party, the Green Party or the Democratic Republican Party. Despite that, the Government of the day has the responsibility to prudently manage the economy, not just so that they can get by, day by day, but also in a manner which lays the ground work for a healthy, sustained recovery, in as short a time as possible. It behooves us all as citizens to be as productive, creative, innovative and efficient as possible to assist that recovery, for it is clear that not much more of this strain can be bourne.