By LYNAIRE MUNNINGS

Tribune Staff Reporter

lmunnings@tribunemedia.net

SHANE Gibson said the proposed National Insurance Board rate increase is inevitable and that rescuing the fund comes down to increasing contributions.

In recent weeks, there has been much public discourse regarding the state of the fund after the State Minister with responsibility for NIB, Myles Laroda revealed that the government will soon announce its decision on whether NIB contribution rates will increase or not.

Meanwhile, Prime Minister Phillip “Brave” Davis insisted that the government has not finalised a decision, deeming it a last resort to place an additional financial burden on society’s poor working class.

However, the Nassau Guardian reported last week that Cabinet had greenlit a rate increase which is believed to take effect on July 1.

In an exclusive interview with The Tribune yesterday, the former Labour and NIB minister said the fund has been underfunded for a “long time”, calling the rate increase long overdue.

With the contribution rate not increased since 2010, Mr Gibson said various governments did not want to lose political favour, however, he noted that there must be an increase to sustain the fund.

“There is nothing else they (the government) could do,” he said yesterday.

“The only two ways you get the money is to yield on your investments and the contributions you collect, right? Even if every single employer and every single employee was compliant, you would still need to increase the rate in order to take care of your future obligations.”

He continued: “And so if you listen to those critics, they will be very vague and say, ‘Oh, the prime minister promised that he would do everything to make sure it doesn’t happen.’ He (the prime minister) needs to look at alternative ways, but he looked at alternative ways, but there are no alternative ways.

“I’d say this is something not just that this administration was faced with. Every administration from the time National Insurance was implemented was faced with the same question as to when do you increase the rates and how to increase them.

“If you don’t increase it, then it will be even more detrimental to all who will look at collecting long-term and short-term benefits over the next couple of years,” he added.

When he was contacted yesterday, Mr Gibson called the rate increase a “painful exercise”, saying the pain will be greater if the government fails to implement the increase.

He also noted that the fund has never been adequately contributed to since inception, hence its current viability.

With many residents opposed to the increase, due to the agency’s discrepancies, Mr Gibson said the good outweighs the bad.

He said: “I have heard and seen personally of a few bad experiences that persons had with National Insurance. But I’ve seen many, many, many, many good experiences, and the good experience far outweighs the bad experience. And you cannot make a policy based on a few bad decisions. You have to make policy decisions based on what is overall best for the position.”

While acknowledging the failures of NIB, Mr Gibson said these circumstances should not deter the government or residents from supporting the rate increase.

“I do agree there are some issues at National Insurance that need to be sought out in terms of timeliness of payments and tracking information properly and contributions,” he told this newspaper yesterday.

“There are several issues that need to be dealt with but that should not stop the rate from going up because it has nothing to do with the rate going up because if the rate doesn’t go up the experience will be even worse.”

There have been ongoing discussions as to whether the government will decide to increase NIB contributions.

This newspaper exclusively reported in April that the 11th actuarial review of the National Insurance Board predicted the fund could be depleted by 2028.

That report had reduced the fund’s potential depletion timeline by one year, as the 10th review had made a prediction of 2029. It also recommended NIB increase the contribution rate by two percent and continue increases every two years until 2036.