The relationship between government and the state-controlled National Insurance Scheme (NIS) is again at centre stage of national issues.
THE NEW TODAY is not referring specifically to the current New National Party (NNP) of Prime Minister Dr. Keith Mitchell but all governments since the scheme was first established in 1983 by the left-leaning People’s Revolutionary government (PRG) of Maurice Bishop.
Several of the regimes have turned to NIS over the years to tap into the workers contributions in order to bail them out of the financial difficulties and mess that they created.
The 2008-13 National Democratic Congress (NDC) of Prime Minister Tillman Thomas got the fund to buy a number of state assets in order to raise money to pay the wages of civil servants.
In addition, some governments have tended to use the contributions deducted from the wages and salaries of civil servants for their own purposes and not hand them over to NIS as required by law.
However, none of the governments have bombarded NIS to get it to give a “hair cut” on the millions owed to the institution.
This was the proposal that was put to NIS by the NNP regime and generated a lot of discussion in the country in the past few months especially among some of the trade unions like the Public Workers Union (PWU) and the Grenada Union of Teachers (GUT).
The current rulers are under pressure financially and there is no sign of ease up in the situation in the near foreseeable future.
As the grave situation continues to unfold, it is clear to this newspaper that several Grenadians either do not care or continue to remain ignorant of the dire financial situation facing the country.
The government is, however, doing a good public relations job in telling the people what it wants to tell them and keeping away certain things that it feels they ought not to know anything about.
This past week, the Labour representative in the Senate asked government to shed light on a number of pertinent issues as it relates to the finances of the nation and a lot of people have chosen to remain ignorant.
The questions can be put into this context:
(a) Can the Minister of Finance inform the workers of the nation on the likely impact the new arrangement with the NIS will have on the benefits of workers over the next five to 30 years.
(b) How the government intends to service the huge national debt of some EC$2.7 billion dollars despite the “hair cut” agreement reached with the US bondholders?
Two other important questions were submitted by Sen. Roberts to the Minister of Finance that should not be allowed to go unanswered since they have serious implications on the finances of the nation.
These are: – (1) Mr. Finance Minister, is the haircut going to be applied to both principal and interest or only to the principal?
(2) Is it the case that most, if not all, of the principal written off as part of the “hair cut” will be recovered through higher interest rates on the remaining debt?
How does the government hope to pay the debts when it can barely generate a primary surplus? Do they intend to raise additional revenues through taxes or grants or some kind of donation in kind?
The government needs to also give an explanation on the proposal as regards a percentage from the sale of passports to be given to the creditors. What exactly is being contemplated?
The government has a right and duty to bring all the information of the “hair cut” deal worked out with the creditors to the attention of everyone on the island.
There is a school of thought that Grenada might now be worst off due to the “hair cut” arrangement and might have been in a much better situation if it had not defaulted on the loan payments.
About three years ago, some local economists like Dr. Wayne Sandiford, Greg Renwick and Dr. Patrick Antoine were keen to make statements on the finances of the State but are now totally silent.
Our economists are doing a great disservice to the country by not getting the relevant information from the Ministry of Finance and working out the financial figures to do an independent analysis for the people.
Why is this so? They will have to offer their own explanations to Grenadians all in the fullness of time or forever keep their mouths permanently shut and locked down.