Money owed to NIS more than $15m – Eustace
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August 19, 2014

Money owed to NIS more than $15m – Eustace

Leader of the Opposition Arnhim Eustace has claimed that the outstanding contributions owed by the Government to the National Insurance Service (NIS) amount to more than $15 million.

Speaking on the New Times radio programme yesterday, August 18, Eustace said he doubted that the $15 million the Government is seeking to raise as a loan from the National Insurance Fund will liquidate the outstanding contributions owed by Government to the NIS.{{more}}

Prime Minister and Minister of Finance Dr Ralph Gonsalves will present to the House of Assembly today, a resolution which seeks to raise a loan from the National Insurance Fund “in an amount sufficient to produce as nearly as may be the sum of $15 million to liquidate outstanding contributions owed by the Government to the National Insurance Fund.

“I have information which suggests it’s more like $23 million and not 15,” said Eustace. “I want the Prime Minister to clear that up when we meet in Parliament tomorrow.”

He also claimed that the Government owes another $3 million to several statutory corporations, and that there are many business owners in the private sector who have also not paid up in full on their NIS contributions.

“So the figure is even larger in terms of money that should have been in the NIS account,” he pointed out.

Eustace went on to say that several persons have aired their concerns to him about the seemingly “poor” state of the Government’s finances.

“The NIS is a reflection of that poor performance by the Government in financial matters,” he asserted.

“It is because of their poor performance that the NIS is now in deep trouble… An institution which is so critical to our lives is being squeezed.”

Last week, it was made public that the Prime Minister will, today, move a resolution for the Government to enter into a loan agreement of $15 million with the National Insurance Board.

This proposed amount is required to liquidate “outstanding contributions” owed by the government to the National Insurance Fund.

According to Section 44 of the Finance Administration Act, no money shall be raised on the credit of the Government except under the authority of that Act or another Act of Parliament or of a resolution of the House of Assembly.

Eustace explained that workers contribute 4.5 per cent of their monthly salaries under the NIS, which is supposed to be matched by 5.5 per cent by the Government.

He accused the Government of using the monies owed to the National Insurance Fund to finance other ventures.

“Just imagine, they taking money out of your whole contributions, they don’t pay it… they keep it to do other things in government.”

He added: “When they borrow this $15 million now, you – the same tax payer – have to pay it. That means you are paying back the same 4.5 per cent that you paid already… that is what it boils down to!”

Eustace then questioned the interest rate at which the Government would be borrowing from the National Insurance Fund, and if the late fees incurred for non-payment of NIS contributions had been factored into the loan amount.

He also questioned how the members of the Board had allowed this situation to develop.

“Why has it happened? You have no guts?”

He recalled that when he had been the chairman of the NIS board, then Prime Minister Sir James Mitchell requested a loan of $15 million from the institution “for bananas.”

“I said to Sir James… that is not possible. The banana industry at that current time can’t repay that loan now. And he agreed… he looked elsewhere for his loan.”

Eustace lamented the situation, describing it as a “total mess”, and called on the Prime Minister to “make this right.”

“You have a responsibility to the people of St Vincent and the Grenadines to look after their interests, and run the institution with proper management and integrity so that you can meet your obligations to the average man.”

SEARCHLIGHT contacted chair of the NIS Board Lennox Bowman yesterday, but he declined our invitation to comment on the loan agreement with the Government or the comments by the Leader of the Opposition.