The Tribune

By EARYEL BOWLEG

Tribune Staff Reporter

ebowleg@tribunemedia.net

THE increase in the rate of National Insurance Board contributions will be revealed in Parliament next Tuesday, State Minister Myles Laroda said yesterday.

Prime Minister Philip “Brave” Davis confirmed last week there would be no contribution rate increase until July 1, 2024. However, his press statement did not indicate the size of the increase.

Before the weekly Cabinet meeting yesterday, Mr Laroda, whose portfolio includes NIB, was quizzed as to what the rate would possibly be.

He answered: “Any increase would be added especially to businesses, but I don’t want to be flippant but I think when I reveal those figures in the House and my contribution next week Tuesday it’s not going to be one of those where it becomes overly burdensome.”

 He added: “But we’re talking about a workforce with a few 100,000 people in it. So any increase in contributions and compliance and paying consistently we believe will be to the benefit of the board and the public.”

Mr Laroda said during a communication in the House of Assembly in March that the fund was projected to lose $98m in 2023 if contribution rates did not increase.

 In February, Mr Laroda warned if there is no raise in the contribution rate this year the National Insurance fund will lose $95m.

 He was questioned as to whether the fund could still be losing that much.

 “The numbers are what the numbers are and that was taken into consideration also. But hopefully, once we have our whole regime rolled out, we don’t expect to turn to black until somewhere within the next four to six years. And so we are in the meantime trying to enhance compliance in particular with government agencies,” he said. 

 Shane Gibson, a former Labour Minister responsible for the National Insurance Board, believes the Davis administration should raise NIB contribution rates now rather than wait until 2024, warning that next year might be no better for a rate hike than the current economic environment.

 The minister explained there were a few factors behind delaying increased rates until July 2024 instead of this year.

 He said: “One of them, the ceiling increases next year January. And so to move it earlier than that would have meant that employees would be paying on increased salary in January and then again in November within July.

 “We wanted to roll it out in July and that way the employees in particular would have enough time and so the public would also be aware of what the increase means, because it’s going to be more than one, and where their money is going.”

 “So there’s going to be an information campaign by NIB to inform the public of what the goal of the board is moving forward, not just increasing the contribution rate, but also what other services would be provided by the National Insurance Board.”

 He added: “The National Insurance Board have not turned a profit from 2016 and so what they were living off was investments and cash that was on hand and we know that’s not sustainable in particular when you’re running deficits of close to $100m.

 “As we talk about right sizing there have been in the media reports of the administrative costs. And I remind the public again that we have some 15-16 islands of The Bahamas with decent population and I use that tongue in cheek, some islands are relatively small. Yet, that doesn’t mean that those islands... the population should not have access to the National Insurance Board and so you’re talking about administrative costs. You’re talking about the offices on those islands.

 “Some of them rent paying, you have to buy equipment, you have to pay staff, there are union agreements. And so we cannot act as if this is an agency that’s just represented in Nassau. Eleuthera, for example, have five offices. It’s an island that’s over 100 miles. You can justify an office in Spanish Wells. The economy and contributions are big enough - so is Harbour Island.

 You have in the north, you have Governors Harbour, and again, in Rock Sound, each one of those offices could justify being there. And there is the cost of administration. Those buildings that are owned by the board have to be repaired, electricity, bills, supplies, and so we have to be careful when we look at administrative costs and not take it in its entirety.

 “Those of us who live in Nassau and have elderly parents or grandparents in the outer islands, say the southern islands, should the grandmother or pensioner in Mayaguana not have access to national insurance? Should they wait for somebody to come from Nassau to hear their case? And so let us be guided, as we look at figures and not understand holistically what those costs entail.”