NASSAU, The Bahamas – Bahamasair and the Broadcasting Corporation of the Bahamas (ZNS) – two major government corporations – each owe the National Insurance Board (NIB) approximately $2 million, not including interest.
This was revealed in the House of Assembly this week by the Hon. Kenneth Russell, Minister of Housing and National Insurance, as he made his contribution to the debate on the government’s $1.5 billion 2007-2008 Budget.
Minister Russell stressed that over the next fiscal period, the National Insurance Board will seek to improve its accounts receivable by collecting the significant unpaid contributions from two government entities Bahamasair and ZNS.
Minister of Housing and National Insurance Kenneth Russell
The Minister also disclosed that NIB is overstaffed by more than 100 persons, with a 25 per cent increase in non essential within the past six months increasing “the already high administrative costs of the NIB.”
He noted that since January, 2007, NIB “has hired on instruction” approximately 90 persons. NIB’s staff count is now approximately 500.
“These hires are all permanent and pensionable employees with security of tenure of jobs,” Minister Russell stated. “Among these are 60 clerks and 13 janitresses/tea ladies/handymen.
“NIB’s target staff level is 380. The National Insurance Board needs to implement hiring policies that are based on transparency and need, rather than immediate short term political benefit. These policies will require the adherence of all.”
As a statutory body, the NIB “should operate at arms length from government but be accountable to the Minister and ultimately Parliament.”
He said mindful of the lingering and ill effects of the “unacceptable practice” of the former administration in “padding” the corporation with staff just before elections, and in an effort to contain expenditure, over the next year the NIB will:
Improve the level of compliance collections;
Improve efficiency through the use of technology including imaging and web based initiatives for customer contact;
Improve customer service through the implementation of the performance management system, focused training activities and by empowerment via the delegating of authority to the line managers; and Reduce administrative cost.
Minister Russell, the MP for High Rock, Grand Bahama, announced that NIB has a number of contracts for services that were not based on competitive bids.
“It also has contracts for services that are no longer needed,” he said. “From this point going forward, NIB will introduce transparent and competitive bidding policies for these services effective 2008. And it will cancel contracts for those services no longer needed or where irregularities exist.
“NIB will continue with some of the building projects approved and will strive to complete others presently underway.
In instances where the contractors are not able to deliver a quality product or where there have been unacceptable delays, work will be halted and reviewed and contracts awarded to those best able to complete the job.
“There are already a number of projects where the Ministry of Works has evaluated progress and performance well before I became Minister of Housing and National Insurance, and has indicated that it is prepared to step in to prevent NIB assets suffering the same fate as homeowners in Pride, Liberty and Emerald Gardens Sub-divisions.”
He assured Parliament that the NIB is not now in crisis.
“With expenditure increasing at a faster rate than income and given the implications of population ageing on further costs, immediate attention and explicit policy positions on strengthening long-term sustainability are warranted,” Minister Russell said.
Ignoring the long-term projections of this and previous actuarial reviews, however, will exacerbate future financial challenges and weaken our social security system, he added.
“I am informed that most National Insurance programs in the region are plagued by high administrative costs, poorly diversified investment portfolios, political interference and lack of transparency, rules that do not allow the program to automatically adjust to economic changes, pensions that are only loosely tied to actual contributions and extremely low participation rates among the self-employed.
“We must move to ensure then that these global developmental issues do not stifle the growth of the fund or render the NIB impotent to deliver expected services, “Minister Russell said.
