It depends on who is selling
The wheel has come full circle for those administering the National Insurance Scheme. When the scheme came into being in 1969 the voices of criticism were loud. In the first instance those opposed to the scheme insisted that it was an unwanted tax on the worker.
On the other hand, the then government was concerned that many people at the onset of old age, needed some measure of financial support. It was therefore necessary that they contribute to those years while they were still active.
If it was a tax on the worker, it was also a tax on the employer because he or she had to pay a matching contribution. Since in those days the government was the largest employer, it was the entity that was making the greatest contribution to the scheme on behalf of the workers.
And in keeping with tradition many workers grumbled when the contributions were deducted but because it was compulsory it was only a matter of time that those contributions to the NIS became a non issue. And to help the Scheme was the fact that new workers into the labour force automatically became contributors.
The government has changed; the critics have now embraced the NIS and the beneficiaries are singing its praises more than four decades later. Of course there have been instances of fraud and these will continue. More recently, with a large sum of cash on hand the Scheme set out to invest, knowing that it always had to keep ahead of expenditures.
There was one very costly investment which saw NIS losing some $1.2 billion and if one were to calculate the interest that should accrue to this sum the loss would have been significantly greater. The Scheme was also used to fund the construction of the CARICOM Secretariat headquarters at Turkeyen, to make loans to some private investors and more recently, to help fund the construction of the Berbice River Bridge. These are interest-bearing investments
All of the latter investments occurred during the tenure of the initial critics of the Scheme. When questioned about that reaction to the establishment of the National Insurance Scheme the very critics, with a wry smile, would simply say that such was the game of politics.
However, the harsh reality, politics or not, is that there seems to be no consideration for the long term good of any project once that project is fashioned by someone other than the ruling party. It is for this reason that the decision to expand the revenue base by seeking to target the ranks of the self-employed is noted and appreciated.
It is no secret that the drive to expand the revenue base is due to the money lost in a questionable investment. Further, the time has come when expenditures exceed revenue. Last year, the earnings from some of the investments helped cushion the impact of this untenable financial situation.
Just three weeks ago some of those who sought to avoid contributing to the Scheme during their active years are now ruing the day that they never contributed. Now that they have retired and must rely on a pension that is proving to be inadequate, there is no cushion to be had from the NIS.
As we examine the people being targeted on this occasion, we cannot but help note that many of them are in high risk jobs and need the protection more than anyone else, which NIS offers. Hire cars are more likely to be involved in accidents and the drivers hurt. Just a few hours ago one driver died after a horrific collision. Without NIS coverage there can be no survivors’ benefit.
The government is now seeking to make NIS registration mandatory. For one to secure a licence to operate hire cars and minibuses one would be expected to produce a document that shows NIS compliance.
Certain workers in the hospitality industry and other categories of self-employed people will be targeted by a new legislation. There is one hiccup, though. It has to be the need to ensure that such people’s contributions are properly recorded. Many are reporting problems with the computation of their benefits.
But this is another matter.