As of today, pensioners and other holders of Government paper will start getting monthly payments as Government seeks to reduce its national debt.
Minister of State in the Ministry of Finance Ryan Straughn made the disclosure when he introduced the Debt Holder (Approval of Debt Restructuring Amendment) Bill 2019 in the House of Assembly today.
“From today, over the next 42 months pensioners, as well as other bond holders specifically, will receive monthly payments to allow that debt that the Government of Barbados owes to be paid down. All of this as we seek to put cash back into the economy and give the pensioners better certainty as they manage their affairs. It is important and different to what transpired. Under the previous system interest would have been paid semi-annually,” Straughan said.
The Minister explained the payments are a follow on to lump sum payments made last year and that the action was in keeping with what the ministry had promised in the mini-Budget of June last year.
“One of the key things with respect to the provisions that are before the House today relates to debt restructuring. After the exchange offer in October of last year the Ministry of Finance undertook to prepay pensioners.
He continued: “As you are aware in November of last year we would have given a cash payment of up to $20 000 to pensioners. In effect altering the terms of what we would have offered in October. At the end of March this year we made an additional payment of up to $30 000. So that anybody who would have held Government paper up to $50 000 would have been liquidated with cash.”
The economist lamented that the cost of servicing debt is taking a toll on the economy and asked fellow parliamentarians to vote in favour of passing the bill as the plan to make monthly payments would bring ease to pensioners.
“Our debt service was too high. The cost of servicing that debt was unsustainable. These provisions we are asking the House to put on a legal foot with respect to the prepayment clause. Pensioners on a fixed income would get as much relief as Government can afford to give them, ” the MP for Christ Church East said.
Straughn further explained: “The debt of the country is one of those areas where you have to be constantly addressing in order to keep the economy stable. These commitments I believe will provide greater levels of stability. We will be well on our way to reducing the debt to GDP to 60 per cent over the next 14 years.”