Watson: NIB ‘tax’ to save fund the lazy way out

Office of the Prime Minister (OPM) Press Secretary Clint Watson said yesterday that “taxing” Bahamians to ensure the financial sustainability of the National Insurance Board (NIB) would be taking “the lazy way out”, and claimed the government recently put a “significant” amount of money into NIB in an effort to save the fund from depletion.

“We’re making sure that the fund is not depleted, but we’re doing it through a prudent way of fiscal management to ensure that the Bahamian people can rest assured that that fund will continue and be around for years to come,” said Watson during a press briefing at the Office of the Prime Minister.

“But it will not be at the risk of their financial stability right now during a difficult time. It’s called good management. That’s what’s going to happen. Are we letting the fund go depleted? No. 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. What the government is doing is being creative and finding additional ways to fund the National Insurance Board without just taxing the Bahamian people, which is the lazy way out.”

Watson was responding to a question regarding the government’s plan to save the fund from depletion.

NIB’s latest actuarial report, which was reported on extensively by The Nassau Guardian this week, recommended the contribution rate be increased immediately, noting that, on the current path, NIB’s reserve for the Pensions Branch will be exhausted in 2028.

The report said that a significant increase in the contribution rate from 9.8 percent to 16.9 percent would be required to pay the full benefits in 2029.

On Wednesday, Free National Movement Chairman Dr. Duane Sands said the government would need to reprioritize its 2022/2023 budget to offer assistance to NIB to ensure its financial sustainability if it decides against following the recommended increase to NIB’s contribution rate.

Responding, Watson said the opposition has always been “very big on talk but very slow on action”.

“It’s the opposite of the Davis administration,” he said.

“The Davis administration is keen on taking action. When you hear that there is this talk from the administration about the NIB fund and most of the talk that you’ve heard so far is the prime minister saying he is not going to put any tax or burden on the people right now. It’s not the right time.

“It doesn’t mean that’s the end. It means that’s not the avenue. I’ll say it again: because he has said right now he will not tax the Bahamian people any further does not mean that it’s the end of that discussion. It means there is a different avenue and that is exactly what the prime minister is doing.

“The prime minister and his Cabinet are working on new opportunities of streams of revenue and new opportunities to be able to ensure that the fund is rebuilt right now without having to tax the Bahamian people.

“Now, if he chooses to do that later on, that will be a discussion then. Right now, he has said that he has to be able to ensure that the Bahamian people can manage.”

When asked about the report, Prime Minister Philip Davis said on Monday his administration hasn’t made a decision yet on whether to increase the contribution rate. In April, he had said no rate increase would take place at this time.

Watson said yesterday that Davis will not just “increase the fund and put taxes” on Bahamians and cause them to suffer.

He said Davis, who took office in September, was elected because he governs with compassion and understanding for the people.

“That’s not the avenue he chooses to go down right now, but it doesn’t mean that he’s not working on a solution to be able to fund the National Insurance Board,” Watson said.

“He is working on a solution. They are working on a solution. As a matter of fact, you would have heard in the budget that there has been a significant amount of money that has already been put into the fund that most people are not even talking about.

“People are taking the opposition saying, ‘Oh, what are they doing about it?’ But reporters have to be reminded that in the budget there was mention that monies have already been placed back.”

In his budget communication in May, the prime minister said the government had made a $5.3 million rent payment to NIB.

It was not clear what significant injection into NIB by the government Watson was referring to as there is no evidence of it.

There are three mentions of the NIB in the 2022/2023 budget: its lease agreement, buildings maintenance and rent arrears.

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Jasper Ward

Jasper Ward started at The Nassau Guardian in September 2018. Ward covers a wide range of national and social issues. Education: Goldsmiths, University of London, MA in Race, Media and Social Justice

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