PM Mottley hits back at DLP’s NIS debt repayment call

Prime Minister Mia Mottley on Tuesday night delivered a biting response to the Democratic Labour Party (DLP) call for the Government to repay the $1.3 billion debt to the National Insurance Scheme (NIS) written off during her administration’s 2018 debt restructuring programme.

Declaring that repayment would only add three years to the life of the under-pressure NIS Fund, she insisted that the Government did what it had to do to protect the economy and the Barbados dollar after inheriting high debt left by the DLP.

“Let’s get real!” she declared as she used the St Andrew Speaks town hall meeting at the Alleyne School to address recent complaints from various groups about the $1.3 billion debt write-off and calls for repayment of the money.

Mottley emphasised that those criticising the Government had contributed to the NIS’ current state of affairs which her administration was trying to fix.

“I hear all of this talk from a handful of people coming from a certain section of the society, as if all of a sudden those who in George Street are lily white and hands clean – ‘Why don’t you pay back the debt?’ You mean the debt that wunna lick up? You mean the debt that wunna carry right up to the sky? You mean the debt that even if we paid it back and find a way of putting it on the backs of Bajans today, who are still recovering from a pandemic, that you are only going to lengthen the lifeline of the NIS by about three years?

“That sound like something any sensible government would do? Let’s get real…. The reality is we did what we had to do to stabilise, first and foremost, the dollar,” the Prime Minister asserted.

She said that although restructuring of the debt was a painful process to undertake at the time, the previous DLP government left the incoming administration with no choice, given the poor economic situation.

“Every month, the last government could not balance its books; every month, the last government had to pay more money than it was earning and, hence, somebody had to print the money, and it was the Central Bank and it was NIS. Nobody said anything when we were talking about it; everybody was just content to let it go long. And we came in and mercifully, within one week of coming into office, we said to the IMF [International Monetary Fund], we said to the creditors, we cannot do this, we are choosing to default on the debt,” Mottley said.

“This government did not put money in Apes Hill, this government did not put money in Paradise, this government did not put any money in those things that you and others are considering nebulous. All we have done is to seek to stabilise the system.”

The Prime Minister asked Barbadians to disregard talk of repaying the $1.3 billion for the time being, pointing out that the NIS’ fundamental issues have been systemic.

Calls for the repayment followed the announcement of changes to the NIS, including moving the pensionable age from 67 years to 67 ½ in 2028 and then 68 in 2034; and increasing the number of contributions needed to be eligible for pension, from 500 to 750.

“For us to simply say pay back the $1.3 billion, who is going to pay back? It would have to be the taxpayers, and to make the taxpayers pay back and only lengthen the life of the Fund for three years, when the fundamental problems of the funds are structural….

“In 2007, the actuary predicted that we would have 30 000 more contributors than we have today, by 2020. Do you know what 30 000 contributors are? That is why I tell you that the population has actually declined…. It is a structural problem,” the Prime Minister contended.

Speaking on the state of the NIS, Mottley emphasised that the Fund’s current predicament is not unique, noting that other countries have had similar longstanding issues with an ageing population and slow population growth.

“Why is almost every developed country’s social security scheme in trouble? Because the planning that we did and the modelling that we did in the middle of the 20th century have not quite worked out. In Germany, major problems they have. Almost all of the developed countries and a large number of the developing countries face the same problem we have – a declining and an ageing population. So what you have is more people are living longer. A man before, when NIS started in 1967, was expected to live to 67 or 68…. That man is now living till 78 or so years old,” the Prime Minister said.

shamarblunt@barbadostoday.bb