When it comes to the critical issue of saving the National Insurance Fund from depletion, members of the Davis administration are worryingly singing from different hymn sheets, and are in the process failing to inspire any confidence that they have a plan to ensure the sustainability of the nation’s social security safety net upon which thousands of Bahamians depend on a daily basis.
Comments made yesterday by Office of the Prime Minister Press Secretary Clint Watson suggest he is clueless on the issue, perhaps hoping for a gullible and ignorant press corps that would swallow the nonsense he spewed on the matter.
But the issue of the National Insurance Board (NIB) and saving the fund is not one to be taken lightly, and should never be an issue subject to disingenuous, and ill-informed statements from anyone charged with communicating the prime minister’s and his government’s policy positions on serious matters impacting the Bahamian people.
Asked yesterday about the government’s plan for NIB in the wake of the latest actuarial review of the fund, which calls for urgent action, including a rate increase, Watson said the prime minister does not intend to “tax” Bahamians to save NIB and that “taxing” is in fact the “lazy way out”.
“Are we letting the fund go depleted? No,” Watson told reporters.
“The answer is absolutely no. Let me say it again so that the headlines don’t twist it. The answer is absolutely no. The fund will not go depleted. The government will look after the National Insurance Board fund. Now, what the government is doing is being creative in finding additional ways to fund the National Insurance Board without just taxing the Bahamian people which is the lazy way out.”
Bizarrely, the press secretary then claimed the government had in fact already made a significant injection of money into NIB as part of its solution to shore up the fund.
“You would have heard in the budget that there has been a significant amount of money that’s already been put back into the fund that most people aren’t even talking about,” Watson said.
Newsflash. People aren’t talking about it because it did not happen.
No one should take any comfort that the government at this point has a plan for NIB, because it does not, though the prime minister said on Monday they are seeking to be “innovative” in saving the fund from depletion in eight years, as projected by the latest actuarial review.
While Watson terms NIB payments a tax and said increasing the rate as recommended in the report would be the lazy way out, Minister of State in the Office of the Prime Minister Myles LaRoda, who has responsibility for NIB, warned in his contribution to the recent budget debate that while there are several reform options for the fund, “an increase in the contribution rate cannot be circumvented”.
Watson has opened the Davis administration up to criticisms whenever it decides to increase the NIB rate, which has not increased since 2010 when it was raised from 8.8 percent to 9.8 percent.
Prime Minister Philip Davis himself has sent inconsistent signals on NIB.
In April, he said a rate increase is “not going to happen, not now”. He said Bahamians needed to first be in a better financial position.
On Monday, after The Nassau Guardian reported extensively on the 11th Actuarial Review of NIB, which is dated January 2022 but not made public by the government, the prime minister said a rate increase was not off the table, and no decision had yet been made.
Incredibly, Davis said he had not yet read the report — signaling that NIB might not in fact be a priority item for him.
Before he takes off for his next round of travel to attend the CARICOM Heads of Government Meeting in Suriname, we hope he finds the time to read the report and that there is a communication to Parliament soon articulating the “innovative” plan to ensure the survivability of the fund.
The government must be clear in articulating its position on NIB, and must start speaking in one accord.