March 19, 2013

Gonsalves says loan from NIS was done properly

When the government borrows money from the National Insurance Services (NIS), they do it properly.So said Prime Minister Dr Ralph Gonsalves, as he acknowledged that the government recently borrowed EC$10 million from the NIS.{{more}}

Gonsalves was, on March 11, answering a question submitted to Parliament for oral answer, by the Leader of the Opposition, Arnhim Eustace.

Gonsalves said that the government had borrowed the money to put towards financing the building of the medical diagnostic centre in Georgetown.

The Prime Minister, who is also Minister of Finance, outlined details of the agreement, stating that the loan carries an interest rate of 6.5 per cent for 10 years, with the principal sum being $10 million. There will be 40 quarterly payments of $341,947.22

“We just didn’t use our executive authority; there is an agreement which was signed with my signature appended to it on behalf of the government and it was filed in the registry – that is how I insist on doing the business with the government and the NIS,” Gonsalves explained.

“So, when you were talking, all it took was someone from the registry to say that it happened and I spoke about it publicly; but if they didn’t hear me and someone tells them then they think that they have a scoop,” he continued.

Gonsalves further explained that it was important to invest money from the NIS and that there was an investment policy in place.

“The actuary says that when you invest, you must seek to invest at a rate not less than 6.5 per cent, because given the extent of the contributions, the contribution rate and the extent of the benefit, and as the system is maturing, if you don’t have the sufficiency of investment incomes, you are going to have a problem.

“So, the idea of keeping the money, the NIS money and putting it inside of a bank account – a savings – to get three per cent is not going to help; you have to invest it,” Gonsalves said.

There have been investments in government projects in other countries, utilising NIS money before the Unity Labour Party (ULP) administration came into office, the prime minister said.

“But as soon as you invest some money from the NIS in a government project of St Vincent and the Grenadines, is as though you have committed a mortal sin,” Gonsalves told Members of Parliament.

“I know the opposition don’t like the project; they said so publicly and everything the government tries to build they oppose – or almost everything,” he said.

But this project is important, he contended, saying that it would be to the benefit of 40,000 people from Biabou to Fancy.

“When completed, the facility is expected to take a lot of pressure off the centre and make it easier on the hospital,” he said. (DD)