Bowen says it’s Treasury Bills

After criticising the former Tillman Thomas administration for selling state properties to the National Insurance Scheme (NIS) to pay salaries a year ago, the scheme has now come to the rescue of the nine month old Keith Mitchell-led administration.

The Board of Directors of the island’s lone Social Security institution met on Monday to approve a request made by government to purchase approximately EC$20 million dollars worth of Treasury Bills to make payments to public sector employees.

There are reports that the funds will be used by government to pay salaries for the period November and December, as well as outstanding back pay to public officers.

During Tuesday’s weekly post-Cabinet briefing, Minister for Communications and Works, Gregory Bowen confirmed the reports that were widespread in the country that the cash-strapped administration had turned to NIS for a financial bailout.

Bowen told reporters that the Ministry of Finance under the guidance of Prime Minister, Dr. Keith Mitchell, had approached the NIS Board of Directors on the purchase of government Treasury Bills.

“The Ministry of Finance has approached the NIS Board and it’s primarily to pay the back-pay really and really to have a reserve, because you know they have two salaries payments in December and it’s really to ensure that you know you have that, because it will be one issue if you pay the back pay and then you owe or you short change people on their salaries…”, he said.

“…Remember back pay is over $40 million plus to be paid over three years. We have already paid a sum for this year and we have to pay this sum at Christmas and so we are simply ensuring that the cash is there to do this,” he added.




Minister Bowen was asked why did the NNP regime go to the NIS for this money in light of claims made by Prime Minister Mitchell in past years that he had never borrowed funds from the scheme.

He said: “Well if you have to sell Treasury Bills …and you have to pay interest rates, the best person that you may give the opportunity to is NIS.”

When asked the difference between the NDC and the NNP-led governments going to the NIS for monies to pay public officers, the senior government minister said: “No, the NDC never was faced with paying of back-pay ($40 million), an increase in the wage bill from $15 to $28 and $30… You must remember we have back pay as well. If you did not have the back pay, and we must now give the unions, some form of credit for facilitating this, they could have asked for the $40 plus $50 million now.

“We had an agreement that we’re going to pay it over time. We are saying we should not default on this so we should have cash readily available to supplement what we’ll be collecting from taxpayers so that we pay them and we pay them on time.

“The NIS has finances to invest and they have to earn something for their workers, so we could have left them out and we could have gone to the OECS Exchange Market and we could have gotten the same financing,” Bowen responded.

According to Bowen, the nine-month old Mitchell government felt it was better to do the transaction with NIS and allow them to get the interest payments rather than do it on the regional market.

 

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