Touting the flexibility of the Barbados Optional Savings Scheme (BOSS), Minister in the Ministry of Finance and Economic Affairs Ryan Straughn has encouraged public servants to invest in the bonds in keeping with what they can comfortably manage to put aside on a monthly basis.
As debate concluded on the Bill to enforce the scheme this evening in the House of Assembly, Straughn, Christ Church East Central MP, said: “I would encourage public servants to take out their ‘black leads’ and determine for themselves how much they want to save. The same way they would go to the accountant in their department and ask for salary deductions to meet their mortgage and car payments, insurance and any hire purchase accounts they have, they can do the same with this programme, and as their circumstances change, they can choose whether they want to invest more or invest less.”
He stated that bonds will be issued every month from July to December this year, and interest payments will be made in January and June 2021.
Straughn explained: “Members of Parliament, including the Leader of the Opposition, senators, contractors, ambassadors and the Ombudsman, all members of the public service at all levels, including retired officers, can participate in this venture.
“For those earning a net income of $36,000 per year, participation is not immediate but they can opt into it and the interest rate for those earning between $36,000 and $50,000 is seven per cent. For those earning between $50,000 and $100,000, it will be set at 12 per cent, and those earning over $100,000 will attract an interest rate of 17 per cent. We will cap the bond issue each month at $8.5 million. Now we understand in some cases people may want to augment their holdings; if so we will prorate it to make sure that $8.5 million is distributed as equitably as possible.”
In addressing the current unemployment levels, Straughn noted that his Government diverted funds from the severance fund to increase the amount in the unemployment fund when it came to office in 2018. As of yesterday, “there were 48,222 unemployment benefit claims, and unlike the situation in 1991 when ten thousand Government workers were sent home, these people were laid off in most cases through no fault of their own. We have already paid out some $49,700,000 in unemployment funds”, the finance minister said.
He also mentioned the bonds the previous Freundel Stuart administration issued in 2014, noting that the bonds forming part of the BOSS initiative were completely different in nature.
He said: “At that time, what the Government did not tell you was that the island’s credit rating was going down, and the Central Bank was printing $50 million per month to pay public servants’ salaries, and they also did not say whether they had any plans to pay back those bonds. This year, some $44 million of those bonds will be repaid to the people who bought them.”
Straughn added that Government’s reserves, which had gone down to $440 million when his party assumed office in May 2018, had now risen to the point where they were $7 million shy of $2 billion.
