An agreement has been reached on Monday between the Board of Directors of the state-controlled National Insurance Scheme (NIS) and the ruling New National Party (NNP) Government for a restructuring of the debts owed to the Insurance body.
In making the announcement at the weekly post-Cabinet Press Briefing at the Ministerial Complex on Tuesday, Minister of Economic Development, Trade, Planning, Cooperatives and International Business, Oliver Joseph said that the agreed restructuring will allow government an extended period of time to pay whatever monies are owed to NIS.
The senior government minister told reporters that at the beginning of the Structural Adjustment Programme (SAP), government had suggested to NIS, that it be given a haircut on the debts owed to the institution but after meeting with stakeholders it was decided that a restructuring of the debt would be more beneficial to everyone.
“In other words, yes we owe you, we know how much but we ask for a longer period of time to pay out the debt … so there is no hair cut in that formula but it is the restructure over a longer period of time,” he said.
The trade unions on the island along with the Grenada Employers Federation (GEF) were said to be strongly opposed to the “haircut” proposal from the Mitchell-led government.
Minister Joseph described the agreement reached as “a very important decision” because it will benefit the entire nation.
“What we are seeing now is that more and more people are thinking about Grenada, not just about their own benefit but how will Grenada benefit. All the stakeholders, the NIS, the TUC who represents the labourers, the workers who were very concerned about the haircut and the restructuring (have) all come to the understanding that the restructuring will be in the best interest of all because the restructuring will ensure that NIS funds (are) protected, that workers benefits are secured because that is the concern that if you restructure, when it’s time to get my pension, would I get my pension,” the Minister said.
According to the Economic Development Minister, this is a major achievement for the NNP regime as paying less debt to NIS means extra money for social programmes.
“For many countries, debt has become a burden because up to 40% of the revenue goes towards paying debt, in interest payment. So if you have a longer time to pay debt and you pay less bills, the savings will be to the benefit (of) the entire country,” he said.
The government minister did not release the specific details of the accord signed with NIS.
The Keith Mitchell-led government in St. George’s has been forced to enter into a Structural Adjustment Programme (SAP) closely watched by the International Monetary Fund (IMF) to deal with a severe fiscal deficit facing the National Treasury.