The Tribune

By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunermedia.net

PRIME Minister Philip “Brave” Davis suggested increasing National Insurance Board contribution rates is on the table for the government.

He is expected to announce the way forward for NIB during his contribution to the budget debate in the House of Assembly tomorrow.

“We cannot afford for National Insurance to fail,” he told reporters yesterday.  

Asked if he planned to announce an increase in contribution rates, he neither confirmed nor denied.

 “Let me just say: We cannot afford for National Insurance to fail,” he said.

 “We have heard the actuarial report. We’re taking that into consideration and, yes, I will be speaking to it in more detail when I speak again in the debate.”

 Pressed further on whether contribution rates will be increased, he replied: “If I’m advised by all of the experts that to do nothing, National Insurance will fail, then I said to you I will not let it fail. Do I have to say more?” 

 Recommendations for a rate hike were outlined in the 11th actuarial review of the National Insurance Board, which predicted the fund could be depleted by 2028.

 State Minister in the Office of the Prime Minister Myles Laroda, who is responsible for NIB, has repeatedly warned of the fund’s dire state.

 In April, he told Progressive Liberal Party supporters at a meeting that the fund is “basically running on fumes” and can only be stabilised when the contribution rate is increased by 1.5 per cent for the third or fourth time in the future.

 Mr Laroda said that while extending the retirement age, cutting benefits, or combining these two options have been considered, only increasing contribution rates will address the problem.

 “When (NIB) started out, you were collecting benefits on $400 a week; now it’s almost $700 a week,” he said. “You were paid out to a few thousand pensioners; now you’re paying out to 43,000 pensioners. We’re paying benefits even though you did not increase the amount that was due into the fund. And so the reality is something has to be done if this is going to be saved.”