Prime Minister Philip Davis returned from the Commonwealth Heads of Government Meeting in Kigali, Rwanda, yesterday and briefed the public on his trip, as is appropriate for the prime minister to do.
He also fielded questions from reporters about myriad issues that are exigent in the country.
Among the issues looming largest is the most recent National Insurance Board (NIB) actuarial review, which is dated January 2022.
Davis said yesterday the government has made no determination on whether to follow the recommendation for a rate increase to save the fund from depleting in six years.
The report stated that NIB would have to increase its contribution rate by two percent on July 1, 2022, and continue increases every two years until 2036 to ensure its financial sustainability.
If immediate action is not taken, the report warned, the state pension fund would be exhausted in 2028, one year earlier than in the previous actuarial review.
In essence, the short-term and long-term sustainability of the social safety net scheme is under threat.
However, the prime minister appeared unmoved by the urgency of the findings.
Perhaps, it is that the findings were “expected” as he indicated, or he has something remarkable up his sleeve that he is not yet willing to disclose to the public.
That he also said he has not read the report that was produced in January of this year is not a good sign that he has anything particularly effective waiting in the wings.
Save outright cataclysm, there is no circumstance under which the commitments of NIB with regard to its benefits should not be met.
National Insurance is a critical, yet often overlooked part of the retirement plans of tens of thousands of Bahamians.
The monthly stipend it provides for those who contributed is critical to the needs of our elderly population.
The modest payment given to the many people who did not contribute is the only means of survival for many.
It is also the mechanism through which most senior citizens in this country get prescription medication.
Its sustainability is a necessity, and not a luxury time can remedy.
We would give the advice to Davis that leadership dictates one does not shy away from what is necessary for the survival of the country, no matter how uncomfortable it may be.
It is far more reasonable to have workers pay more into the fund now, than to have the government meet its commitments in the future.
If that day arrives, far more painful choices than mandating a few dollars more going into the fund from each employed person every week would have to be made.
Davis appears to be suffering from the common affliction among political leaders in that they only want to deliver good news.
This is not one of those situations.
“We have to assess all of our other fiscal issues, i.e. how the economy is going to be growing, where we are going to be obtaining new revenues, how effective are our collection efforts … to determine how we address that,” Davis said.
“And if we can find a ways and means to alleviate the burden on the poor Bahamians or the Bahamian worker, we will do so.”
He previously said that NIB was at a “watershed moment”, but that he will not put any further burden on the Bahamian people at this time.
Minister of State in the Office of the Prime Minister Myles LaRoda, who has portfolio responsibility for NIB, and has clearly read the report, urged Bahamians to ultimately face reality.
“We need to be creative but we need to face the reality that unless this matter is addressed, and relatively soon, that we are looking at depletion,” LaRoda said.
“That fund will only be supplemented by the taxpayer, The Bahamas government.
“… We are going to try and find innovative ways, but that reality that the fund is just blowing through cash is a reality that we must pay attention to also.”
Davis must step into the same headspace as LaRoda.
No reasonable person can blame Davis or the current administration for the state of NIB.
What he should do is be frank with the Bahamian people and meticulously outline what is to happen and what that means in terms of how much more they will have to pay.
Nobody wants to pay more anything, but we cannot shirk doing the responsible thing simply because we do not want to do it.
NIB is too important to us all, and time is running out.