Progressive Liberal Party (PLP) Deputy Leader Chester Cooper said yesterday to raise National Insurance Board (NIB) contribution rates at this time, or to even suggest the notion is in play, is a terrible and reckless idea.
He was responding to recent comments by Minister of National Insurance Brensil Rolle that now may be the time to seriously consider the decades-long recommendation to increase NIB contribution rates.
Copper said, however, that given the state of our economy at this time, consideration of such a move is outrageous and unconscionable.
“The healthy sustainability of our national social security fund is always of great importance. Too many depend on NIB to ever let it become imperiled. However, raising NIB rates would take more money out of the pockets of those who are still actually working and further deplete the resources of companies that have suffered great losses through the pandemic,” he said in a statement.
“Some of those companies have not been able to operate for many months, yet maintained NIB payments for employees who were not terminated.”
Up to December, NIB had paid out $97.5 million in unemployment benefits.
Despite the strain on the fund due to joblessness related to the COVID-19 pandemic, NIB Director Nicola Virgill-Rolle said in October that the fund remained strong at about $1.7 billion. She also estimated that in 2020, NIB expected to only receive 70 percent of the $290 million in contributions it typically gets annually.
Cooper said to raise NIB rates before economic recovery would send a shock to the system that would reverberate throughout the economy.
“To speak of it so cavalierly would also give companies that were considering new hires great pause. Even while recognizing the perilous economic situation for so many Bahamians in these difficult times, the current administration is levying increased taxes on the poor in the form of taxes on web shop winnings,” he said.
“It has also increased fares and fees on Bahamasair that will make it more expensive for Bahamians and visitors to travel to the Family Islands, which will impact their economies. There has also been an announcement of looking at increasing fees and the frequency of billing at the Water and Sewerage Corporation.”
NIB has taken on a considerable burden and increased applications for assistance since the onset of the COVID-19 pandemic, as it took on the role as distributor for government’s unemployment assistance program, for which it has paid out nearly $92 million since the program’s start in April.
NIB has revealed it has paid out three times more over the ten months since the pandemic reached in The Bahamas than it does in a typical year.
Cooper said there are multiple, more painless pathways to ensuring the sustainability of the national insurance fund.
“We need an examination into the state of affairs of NIB and public disclosure of such.
“We need to know if the government is paying its share of the employer contribution in a timely manner to NIB and what amounts, if any, are outstanding,” he said.
“The Progressive Liberal calls for the release of updated actuarial reports to verify that the state of NIB is sound for the future of the social safety net.”
Dr. Virgill-Rolle resigned as NIB director last month, however agreed to stay on until March.
Cooper said the fact that the director has now exited for the private sector will surely not help matters at the board.