Audley Shaw yesterday said the Government had no choice but to continue the $11.4-billion drawdown from the National Housing Trust (NHT) to help prop up the national budget, as to do otherwise at this time, given the Administration’s $1.5-million tax break commitment, would have been fiscally irresponsible.
Shaw, the finance minister, was fielding questions at a post-budget press conference held at the Ministry of Finance at Heroes Circle.
Reminded of his party’s characterisation of the then People’s National Party (PNP) Administration’s decision in 2013 to take $11.4 billion from the NHT over four years as a “raid” on the NHT, Shaw said: “At the time when I spoke, my party had not yet conceived the idea of this game-changing personal income tax reform, so having conceived the idea and having given birth to it, we had to make the conscious decision that we couldn’t do everything one time… we couldn’t cease to take the drawdown from the NHT this year, in line with the second phase of the personal income tax give-back. It is firmly our intention to phase that out, but it is just that we couldn’t do everything one time. It would have been fiscally irresponsible”.
The PNP Government, amidst howls of Opposition protest, pushed a controversial NHT (Special Provisions) Bill through Parliament in March 2013 to legalise the drawdown of $45.6 billion over four years.
Speaking at a ground-breaking ceremony for housing developments in Westmoreland last Friday, Prime Minister Andrew Holness said the NHT is not a housing agency but a financial institution, and that steps will be taken to improve its structure.
Yesterday, the finance minister emphasised this position, pointing out that the NHT commands vast resources and has to be re-scoped “along maybe more traditional prudential lines”.
“There are a number of things that can be done — (there are even proposals that) the resources are so vast that some of it can be used to secure additional loans that can be dedicated to special things. It’s not an announcement, but it is a thinking of the Government that instead of taking resources annually as we have been doing — part of the future of a housing trust is to see how maybe we can use some of those resources creatively deployed (to get) low-cost funding, then we can maybe target the substandard housing that exist. We have to find a way to channel funding into decent housing for every Jamaican. These things are in active consideration,” he further outlined.
Minister Shaw also addressed questions about the possibility of the NHT moving to use a credit rating system in its application of benefits. “That’s a detail that we have to look at. It’s something that can be examined. It ought to be. Here again, it comes back to personal responsibility — if they know that they are going to be subject to credit rating, then people will start drawing up their socks,” he stated. The NHT is expected to spend $25.5 million on housing this year.
At the same time, he stressed that this move to redirect funding from the NHT into the consolidated fund is not just about the NHT, but public bodies as a whole. He pointed out that there are surpluses of almost $200 billion owned by various public bodies that are idling in bank accounts.
“This Government has made a decision that we are going to carry out a careful forensic study of all of those funds with a view over time to bringing back some of those funds into the central government operations,” he said, noting that a careful study is to be done with careful review by the International Monetary Fund. “It’s going to be transparent, it is going to be objective. This is not going to be about taking some money here and there, it is going to be in the context of a proper review,” he said.
The finance minister noted that this pooling of funds is already taking place with some $1.9 billion in surplus identified across three public bodies — the Culture, Health, Arts, Sports and Education Fund, the Tourism Enhancement Fund and the Jamaica Civil Aviation Authority — which will be accrued to central government.