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The Barbados National Insurance Scheme (NIS) currently covers all employed and self-employed persons in Barbados and offers five main types of social security benefits from three separate funds.
The National Insurance Fund covers short-term benefits, long-term benefits or pensions and employment injury benefits, while the Unemployment Fund and Severance Fund cover unemployment benefits and severance payments, respectively.
As a result of the weak performance of the Barbados economy in recent years, contribution income for the various funds has declined, while benefit expenditures have increased. Despite this, the National Insurance Fund and the Severance Fund continue to perform extremely well and are generating major surpluses.
Over the 2009 to 2013 period, the National Insurance Fund generated a combined surplus of over $1.15 billion, and the Severance Fund a combined surplus of over $105 million (See Tables 1 & 2 for annual performancefrom 2009 to 2013, and up to the end of October 2014).
At the recently concluded 14th Actuarial Review, the consultant actuary was of the view that no adjustments were needed to these funds. As is to be expected, the Unemployment Fund has felt the brunt of the recession.
As the unemployment rate has increased, contribution income to the Unemployment Fund has declined, unemployment benefit expenditures have increased, and as a result, the fund has experienced deficits (see Table 3). This happens whenever there is a prolonged period of low employment.
The Unemployment Fund was also impacted in an accounting sense by the transfer of $10 million to the Re-Training Fund. These funds had never belonged to the Unemployment Fund but had been lodged there over many years until the legal and other work for the Re-Training Fund was completed.
The nature of an Unemployment Fund is such that during periods of strong economic growth and low unemployment, the fund should generate surpluses which are then invested to provide a cushion for the inevitable recessions, with high unemployment and deficits on the fund.
Therefore, despite the deficits being experienced, the Unemployment Fund has been able to fully meet its commitments by drawing down on the investment assets that have been built up for that purpose.
At the recently concluded 14th Actuarial Review, the consultant actuary noted that while the NIS has two funds to deal with periods of increasing unemployment, one of the funds, the Unemployment Fund, was experiencing deficits, while the other, the Severance Fund, continued to generate surpluses.
It was, therefore, recommended that in order to reduce the draw-down of the investment assets of the Unemployment Fund and shore up the fund, a sum of money be transferred to it from the Severance Fund. The NIS Board sought an opinion from the Solicitor-General as to the legality of such a transfer, and it was indicated that such a transfer should not be undertaken.
As an alternative, the Board recommended to Cabinet that employers’ contributions to the Severance Fund be suspended for a period of two years and instead the contributions by employers to the Unemployment Fund be increased by the same amount for the two-year period.
This was viewed as a better option than increasing contributions by employees and employers to the Unemployment Fund, especially at this difficult time. I want to assure Barbadians that Government is committed to the preservation and continued success of the Unemployment Fund and has already made two decisions that will shore up the Fund.
Firstly, Cabinet has accepted the Board’s recommendation just described for the suspension of contributions to the Severance Fund and a concomitant increase in employers’ contributions to the Unemployment Fund for a two-year period.
The relevant legislative changes will be made in Parliament shortly and the policy implemented. Secondly, Cabinet has agreed to provide a further cash injection of $12.5 million to the Unemployment Fund. These measures will shore up the Fund and ensure that all Barbadians who have contributed and qualify for unemployment benefits will have protection during periods of unemployment.
The other four types of security benefits (short-term, including sickness and maternity; long-term or pensions, employment injury and severance) are not affected. Additionally, the investment portfolio is also sound as investments internationally, regionally and locally are performing satisfactorily.
While some may have an interest in putting a political spin on matters relating to the NIS and seek to create panic among the population, I am presenting you with the plain facts and the decisions that have been taken to ensure that the NIS remains your lifeline.
Ministry of Labour, Social Security and Human Resource Development
Working Together in Hope
We are at the end of our first full business week for 2015. By now we should have clearly identified our goals for the year and have started the process of working assiduously to accomplish them. 2015 can be a game changer for Barbados, but we must all work together as a country to see it happen. The adjustments which were introduced in 2014 to return the country to a growth path are working. If we work together as a country to be more productive, entrepreneurial, competitive and innovative we can attain sustainable growth, social and economic development.
All Barbadians must work together if the country is to achieve its goal of sustainable economic growth. It is not just the responsibility of the government. Every Barbadian even the children have a role to play.
In every sector of the Barbadian society we must endeavour to be the best we can be. In hospitality, we must deliver superior service. In the retail sector, we must make our customers want to return and do business with us. In the healthcare sector, our ability to provide world renowned convalescent care should be a talking point. Our thorough and efficient financial services should be sought by persons from all areas of the world. In agriculture our limited land space should be craftily cultivated so that we can contribute more to our nutritional needs. Our manufacturing industry should be regarded for its creativity, ingenuity and quality which we consistently deliver at high standards. Even within our schools our children should be so keen to excel and develop their varying talents so that they too can contribute to growth and development of their country Barbados and beyond.
A holistic and team approach is what is needed to move this country forward. It should not be, what the government is doing or what is the opposition doing but what are we doing. All Barbadians and those who love this country need to work together.
We must be aware of the potential damage which we can inflict to our efforts to move this country forward when by our words and action we try to pull it down. In 2015 let us try to change our outlook on life by spending time highlighting those things which are positive. Instead of predicting and spreading prophesies of doom and gloom restock your vocabulary with words of hope and encouragement. This positive mind set and outlook will help us to seize the opportunities which are within our grasp for the taking. Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.
As we look around the country we can see many bright spots and rays of hope. This winter tourist’s season is out performing the previous years. At the end of November 2014, arrivals from the UK had increased by 9.1% over the same period in the previous year. We have secured increased airlift from the USA and Canada with the introduction of the Delta flights and Air Canada utilizing larger air crafts for this route. A trip to the Carlisle Bay area or Oistins over the weekend and one can see first-hand that Barbados is having a bumper winter tourist season. The opportunities for growth and development are there at our fingertips. We have to be confident and bold enough to make use of it.
The resilience of Barbadians can be seen in the villages and in the market place. Persons are utilizing their talent and skills to create employment opportunities through cottage industries. This determination will help us to achieve our goals.
As the year 2015 continues to unfold a number of major investment projects are poised to get started. These projects, such as the re-opening of the brand new Sandals Casuarina and the start of major hotel development projects will bring about employment opportunities and much needed foreign exchange to the country.
If we focus on the positives which are happening around us we would acknowledge that Barbados has survived the economic storm. By embracing the opportunities and working together to enhance our competitive edge this country is poised to reap sustainable economic growth and development.
In this year, let us put away the negativity and focus on the positives. Be optimistic and use our creativity and ability to move us forward. Let us continue to work together as a nation to build a stronger country. For 2015 do not talk defeat. Use words like hope, belief, faith, victory.
Together We Shall Overcome; Cheers to the New Year
It is always a hopeful time as we Barbadians gather with family and friends to celebrate the end of one year and the beginning of another. The year 2014 was indeed a difficult and challenging year for Barbados both for its citizens and those who hold the heavy mantle of leadership. Undoubtedly these challenges tested the wherewithal of Barbadians to a large extent and during the year we as a people faced these challenges with a sense of courage and resilience that demonstrated the fortitude and magnitude of the Barbadian spirit and our ability to overcome adversity.
This spirit and sense of determination must continue to be the hallmark of Barbadians as we enter 2015, and must serve as a constant reminder to all of us that no matter the challenge presented that each and every one of us, as Barbadians, has within us the ability to rise above them and flourish. It is this spirit that throughout our history has taken Barbados from strength to strength, and which shall continue to allow it to prosper for years to come.
As 2015 dawns upon Barbados the future is bright and the horizon is set high. However sadly and unfortunately, some external and internal forces are giving their best efforts to shroud this light behind a cloud of dark despair for their own selfish gain and advancement; this must never be allowed to happen. The citizens of Barbados have always possessed keen the ability to see situations clearly and correctly, and to form sensible conclusions. Even more critical to their ability to survive is the fact that Barbadians have proven themselves able to discern the wolves dressed in sheep’s clothing and furthermore to expose them for what they are. With these keen senses of Barbadians fully alert, the constant efforts of these forces shall be thwarted and are destined to failure.
The leadership of the DLP remains, as always, extremely competent to shepherd Barbados through 2015 and beyond. The recent Financial Statement of the Honourable Minister of Finance demonstrates this and further illustrates that the brave decisions taken by this government and the tough economic policies adopted have not been in vain and have set Barbados on a path for sustainable economic growth and development. As such there is much to be looked forward to in 2015 and can be neatly though not exhaustively summarised as follows.
Firstly, the anticipated increase in tourist arrivals is set to see hundreds of jobs created in the tourism sector. Secondly, the renewed vigour of the international business sector is set to bring to bring foreign direct investment and more economic returns. Thirdly the restructuring of the sugar and farming industry is set to usher in a new wave agricultural practices and food security for the island. Finally, the Crop Over festival shall continue to be a cultural extravaganza which shall promote Barbados for further increased tourism benefits.
As accustomed we must band together in a spirit of harmony and good neighbourliness throughout this year. Particularly we must be acutely aware of each other’s needs and where there is lack in these needs being met, a helping hand must be extended by those of us in a more fortunate position, to ensure that no Barbadian languishes and falls into despair. Concurrently, this government remains committed to aiding the most vulnerable of society with the provision social services and amenities accessible to Barbadians. With certainty it can be said that the social safety net within Barbados remains intact albeit with the necessary alterations to preserve its existence for future Barbadians. Education, healthcare and other essential services remain readily accessible to all Barbadians for little to no cost; a fact that we can still boast and be proud of when compared to other fellow Caribbean neighbours.
Let us ring in this new year of 2015 with hope in our hearts, courage upon our chests, and smiles upon our faces. Barbados has made steady progress in its return to economic growth and shall continue so to do. With the leadership of the DLP and the ingenuity of ordinary Barbadians combined, together we shall overcome. Cheers to the New Year!
Happy New Year from the members of the Young Democrats.
THE RT. HON. FREUNDEL J. STUART, Q.C., M.P.,
PRIME MINISTER OF BARBADOS
Once again we join with Christians across the world to pause and reflect on the miracle that occurred in the manger at Bethlehem two thousand years ago, when a little known virgin gave birth to a baby boy, Jesus Christ. That miracle has changed the course of human history for all time.
The coming of Christ into the world, with the message of peace on earth and goodwill towards men, symbolized the bringing of hope to a world desperately in need of it. The birth of Christ had been prophesied long before it actually happened. Wise men, we are told, gladly followed a star which they had seen in the east and brought their gifts to Him who had been born King of the Jews.
King Herod was not amused by the news of the coming of Christ as King or by the fact that the world would now benefit from the hope of which His birth was so powerful a symbol. He sought, therefore, to end the life of the young child and, in his zeal to do so, ordered that all male children under the age of two years should be put to death.
So, Herod, in his time, tried to remove the child whose birth ushered in and embodied hope for the world. Herod died about two thousand years ago but his moral and spiritual descendants have steadfastly carried on his work down through the ages, and have tried to extinguish the flame of human hope wherever it has existed. Our time and our place are no exception.
My simple message to Barbadians this Christmas is that the passing of time has not lessened the importance of the event which took place in that manger at Bethlehem two thousand years ago. The hope which the birth of Christ brought to the world is still available to sustain us as we confront the many challenges of life from day to day.
King Herod did not succeed in destroying that hope although he caused much damage to innocent children in trying to do so.
Those in our day who are possessed of the spirit of Herod, and for whom the existence of hope is a challenge to the kind of order which they would prefer to create, must not be allowed to succeed either.
So, this Christmas, as you exchange your gifts, both material and spiritual, with friends and loved ones; as you spend quality time with your family and with those for whom you care; as you indulge in your chosen forms of recreation, reflect on the fact that central to that event in the manger at Bethlehem during the reign of Herod the King, was the kindling of that flame of hope, which lightened the darkness of generations of people down through the ages; and reflect on the duty you owe to yourselves and to generations to come, not to let that flame of hope ever flicker to extinction.
After all, it is hope and the inspiration it begets that has helped us over the years to meet and to surmount life’s many obstacles, and to create the Barbados we now have, and of which we are so proud; and it is hope that will endue us with the determination to meet current and future challenges!
Christmas teaches us that hope will win in the end!
I should like on behalf of the Cabinet of Barbados and on behalf of my own family to wish all of you at home and abroad a blessed Christmas and a healthy, happy and bountiful New Year.
THIS CHRISTMAS GIVE MORE THAN A WRAPPED GIFT
“Maybe Christmas, he thought, doesn’t come from a store. Maybe Christmas… perhaps… means a little bit more.” – Dr. Seuss- How the Grinch Stole Christmas
Seasons Greetings from The President, Executive & General Councils of the DLP and all its members. We sincerely hope that this message greets you in good health and prosperity.
Maybe, the Grinch was right, maybe Christmas does not come from the store and perhaps means a little more. Are we giving the wrong gifts? The cost which is attached to some gifts is valued far less than those intangible gifts which have no cost attached to them. Should we then look to the true meaning of Christmas when giving gifts.
As we draw closer to Christmas, shopping for gifts for family and friends, something that has become a part of lives of most of Barbadians. This brings the question as to what to buy for family and friends. Weighing the dollar value of gifts but not bearing in my mind the true value of these gifts. When a gift is chosen and given to a person, the desire of the giver is to bring happiness to the recipient based on that person’s needs and/or likes. Easy to accomplish? Not always—in fact, it is the very reason that shopping at Christmas time maybe time consuming and tedious. Then the issue of affordability enters the picture. When the “perfect” gift is found, is it something that you can afford to buy?
Yes, according to Matthew 2:1-12, “wise men” came from the East to visit Jesus, bearing gifts of gold, frankincense and myrrh. Does this imply to Barbadians and the wider world to give gifts worth the equivalent of those of the Wise Men? Or, is this symbolic of giving much more. Maybe this in itself has nothing to do with the dollar value of the gift.
So for your consideration this Christmas of 2014 give some gifts to others of an intangible nature that will outlast material gifts long after Christmas is past. These are gifts that everyone can give and are suitable for every age and for every type of person and cost absolutely nothing. These gifts are keeping with what our forefathers gave, which built a strong Barbadian society and which they later used these gifts as a stepping-stone and a foundation to build a strong and viable economy.
Firstly, there is the gift of love. So for Jesus came as God’s gift of love to every one of us! “For God so loved the world that He gave His only begotten Son….” John 3:16.“Love one another…” (John 13:34). God’s love is unconditional and when we give the gift of unconditional love we bring immeasurable blessing to persons. We are to be channels of God’s love to others. So this Christmas give the gift of love to your country and its people. Love that would make you never wanting to see your country or its people hurting because of you or any other Barbadian seeking to achieve their own personal gain or political motive. Love, so unconditionally, that you will sacrifice your political and other allegiances and put country first and ensure the prosperity of all Barbadian people is assured, as God did for us through the birth of Jesus Christ.
Also, there is the gift of encouragement. We all need encouragement from time to time. We may find ourselves being “down” for a variety of reasons—whether responsibilities at work, family situations we’re dealing with, finances or other issues. As a result, this season encourage our leaders, family, colleagues and friends because when someone comes along and encourages us we are greatly blessed and uplifted. Again, it is God’s will that we give this gift. In Hebrews 10:25 it is written “…let us encourage one another….”
Obviously, there are many more such gifts that we can give to others. These gifts are priceless and will keep on giving blessing upon blessing through the years. “Someday you’re going to find that your way of facing this realistic world just doesn’t work. And when you do, don’t overlook those lovely intangibles. You’ll discover those are the only things that are worthwhile.” -Fred Gaily from Miracle on 34th Street (1947)
At the end of life these are the gifts that will be remembered more than any others! So from The Young Democrats and Team DLP we send all Barbadians the gift love this Christmas of 2014!
Trending in the Right Direction
The much talked about and anticipated “Budget/Ministerial Statement” has come and gone. All the fuss and fanfare which the opposition and their pundits in the media tried to create out of the event was absolutely unnecessary. It was a bit dizzying to keep up with their arguments; do we need a budget or is the timing right?
We know for sure that the Leader of the Opposition was preparing a grandiose logorrhoea to deliver as yet another fail attempt to reply to the budget. Well, Ms. Mottley will have to hold that file close to her chest for a few more months. Sorry Mia.
In some quarters, the view was that the timing was not correct for a budget; while others went ahead and provided their own economic policies. However, we accept the Minister’s justification for offering a Ministerial Statement at this time and we are quite pleased with the content which was covered in that statement. The decision to do the ministerial statement and provide the public with an update of the progress of the 19 month Fiscal Consolidation programme is a better approach than to provide a budget which could derail the progress which is already being made.
The August 2013 Budgetary proposal provided a series of measures with the objective of returning the Barbados Economy to growth in 19 months or by 2015. The wise thing to do would be allow the measures to work and see where they take us and implement any necessary adjustments along the way to ensure that we stay on course.
A budget has and always will be a plan of action. There is nothing within a budget which is absolute. There are no guarantees within any budget to indicate that you will hit all of your targets spot on. In some cases you may fall below those targets or your may exceed them. The importance of a budget is to point you in the right direction. The Ministerial statement allowed us to review our progress and determine if we are heading in the right direction. From the statement it is clear that we are trending in the right direction.
Good Honest Governance
Finally, in Barbados we have a sense that there is a systematic approach to the handling of public affairs especially financial matters and we are no longer governing by rote or gut feeling. By delaying the budget until after the 19 month fiscal consolidation programme we give ourselves the opportunity to gauge the effectiveness of the programme and implement measures via the appropriately timed budget to make up for any short falls. Management of an economy is a sensitive measure and one which cannot be adjusted to suit the whims and fancies of all involved. We have had far too many budgets based on sensationalism. We need to ground our budgetary proposals on sound economic policies which will help the country to reach its social and economic objectives. Based on the direction which is being taken by the Minister of Finance and persons within his Ministry we are heading in that direction. As stated by the Minister of Finance, delaying the budgetary proposal until the completion of the 19 month stabilisation programme “will allow the ministry and its strategic agencies and partners to more properly consult on key policy initiatives that will impact on critical aspects of our economic, financial and social care sectors and our efforts for fiscal consolidation and growth.”
Thanks to the review which was provided via the Ministerial Statement we can safely say, “… based on actual performance and projections for the immediate future, we have not laboured in vain: Barbados is on a growth path once again! Our foreign reserves have stabilized, our fiscal deficit is on a downward trajectory and economic growth is returning. By any objective standard the programme is working!”
Our expenditure targets are being met. The government is on track to record savings of $68.5 M from a reduction in salaries and wages and savings of $229 M from reductions in transfers and subsidies. “The expenditure reductions are now projected to generate total savings of $290.8 M approximately 3.4% of GDP.
The revenue raising measures such as the Consolidation Tax, Municipal Solid Waste Tax and Bank Asset Tax are projected to yield 91.2M or 1.07% of GDP. Together the fiscal consolidation measures are now projected to yield a reduction in the deficit in the region of $452 M or 5.32% of GDP. Although we will fall short of reaching our target of a deficit of 6.6% of GDP we are still trending in the right direction and within acceptable limits.
The Ministerial Statement provided us with a positive outlook of the performance of the Barbados Economy. Our economic indicators are trending in the right direction the 19 month stabilisation programme is working. A positive indicator for the holiday season. Best wishes for the holidays!
Spot On – Achieving Goals.
Since coming to office in 2008, this Democratic Labour Party administration has had to make tough decisions to safeguard the future of the Barbadian economy and society. This was done in an effort to ensure that the State would be in a position to provide those benefits and services which are necessary. For the decisions which we have taken, we have endured heavy criticism from certain segments of the media but most of all from the other side of the political divide. Despite the constant ridicule and lack of support from a misguided opposition, we have continued to pursue our mandate to create a Barbados which is socially balanced, economically viable, environmentally sound and characterised by good honest governance.
We do not expect the opposition to sing our praises. However, we question the balanced nature of the reporting in some segments of the media. Yes, we have endured harsh and heavy criticism at times from the media. We do not run away from this neither do we try to stifle it. While the media flex their journalistic muscle and become accustom to using it again, we would at least ask that they be fair and balanced.
Earlier this week in another section of the press, a short, four column feature was provided to highlight the savings which the “controversial restructuring of the Barbados Drug Service” had attained two years after implementation. Yes, the column gave credit to the Barbados Drug Service (BDS) being able to achieve its goal by reducing its expenditure through a reduction in the unsustainably high reimbursements paid out in the Special Benefits Service from $40 Million in 2009-10 to $10.6 million in 2012-13. Overall the BDS was able to reduce its expenditure of the Ministry of Health’s budget from 13% to 6%. Cutting its expenditure by half after introduction of the so called, “controversial restructuring”.
When this restructuring was introduced, this administration and the then Minister of Health, Donville Inniss, were vilified for the action taken. We presented the public with the facts emphasizing the necessity for the action. However, the opposition and sections of the media went on a rampage, painting a bleak picture of the doom and gloom which would befall Barbadians. Town hall meetings were convened and the call in programmes were rife with stories of certain damnation. Yet, when the article can speak to the BDS being spot on and achieving its goals, not a word of credit or vindication was offered for this Democratic Labour Party which they had so harshly abused in the past.
The action taken by this DLP administration to restructure the BDS was not only necessary, but the best available option. The recent financial statements prove this. We commend our Cabinet in particular the current Minister of Health, John Boyce, for staying focused and achieving their goals.
The reimbursements paid to private pharmacies under the Special Benefits Services rose from $21, 851,776.00 in 2003-04 to an astoundingly high figure of $40,561,950.00 in 2009-10. Can you imagine the situation if we had to pay out such high sums of money at this time when the treasury is under pressure? It would not be possible and would result in chaos and panic with persons unable to receive their medication. As they say, “a stitch in time saves nine” and “prevention is better than cure”. The intervention of the DLP administration in 2010 has successfully brought this expenditure down to a more manageable level of $10,787,176.00 in 2011-12 and further to $10,636,956.00 in 2012-13. These amounts are far more sustainable.
We are also happy to report that Barbadians have made the necessary adjustments to the policy and still continue to access their medication. The number of prescriptions filled in the Private pharmacies have declined to 864,335 in 2012-13. A drop of just under one million fewer prescriptions when compared to the 2006-07 period. Under the new policy persons still receive their medication free of charge at the BDS pharmacies, which has seen an increase of prescription volume from 659,750 in 2006-07 to 1,206,351 in 2012-13. Although the public pharmacies are filling more prescriptions, the cost is still maintained within reasonable levels as a result of changes to the drugs on the formulary and other cost saving measures. In 2006-07 the expenditure in the public pharmacies was $11.4 million this expenditure is now $13,481,501.00 in 2012-13 even though the number of prescriptions filled has doubled.
These achievements are worthy of giving credit and praise. We wish that our opposition, instead of being so childish and callous, would stay in Parliament and do the people’s work. If the restructuring was not done the circumstances would be far more dire for the people of Barbados.