| A Partnership for National Unity (APNU) is currently bracing for word on when the GovernmentFormer Finance Minister Carl Greenidgewill have to use taxpayers’ dollars to bail out the ailing National Insurance Scheme (NIS).This is according to APNUs point man on finance, Carl Greenidge, who says that the party is expecting that the administration will make the request sometime this year by way of a Supplementary Provision from the Contingency Fund “or early next year.”The Former Finance Minister said that based on information available, the Scheme at present is in grave financial difficulty, which is a phenomenon its Head, Dr Roger Luncheon, seems not to be au-fait with.This assertion was made by Greenidge in light of recent comments made by Dr Luncheon where he suggested that the Scheme is not in any financial danger.Under the legislation that governs the National Insurance Scheme, should it fail to meet its obligation when it comes to payments, then it has to resort to the treasury by way of advances that must be repaid.The scheme’s affairs and its management have long been criticized and its 2010 report stated that by this year the expenditure will surpass its revenue.Greenidge says that the time has come for a serious, structured reassessment of the Scheme “to have it evolve to reflect the current environment in which it operates.”The APNU finance expert says that the opposition will be calling on the Finance Minister to provide answers to the House as it relates to the Government’s plan to resuscitate the scheme.He lamented the fact that the actuarial reports over the years have all been making relevant recommendations as it relates to resuscitating the Scheme, but they have not been taken on board by the Cabinet.Greenidge said that given the circumstances, they expect to see a bailout package being requested in the short term, but the Scheme will have to ensure that decisions are taken to ensure the industry’s long term viability.Chartered Accountant Christopher Ram recently hammered the hierarchy of the Scheme and was very critical of the $6B invested by NIS in CLICO (Guyana),Wholesale NFL Jerseys, which has since been impaired as a result of the company’s liquidation order.Ram opined that the Government has allowed political considerations to undermine the proper management of the Scheme ignoringChartered Accountant Christopher Ramthe recommendations contained in the reports of the actuaries for the 2001 and 2006 reviews.He emphasised that under Dr. Luncheon’s stewardship, the failure to act on the recommendations of the actuaries, compounded by the collapse of its investment in CLICO, has left a $6B hole in the Scheme’s balance sheet,NBA Jerseys China, and no income from more than 20 per cent of its investment.Ram also expressed concerns about the manner in which the sale to the NIS of a building previously owned by CLICO (Guyana) to the tune of $600M has been dealt with, and whether there was any element of a subsidy in the price of $600M paid for a building which up to recently was valued at more than one billion dollars.“Any under-sale could constitute a fraud,Cheap Jerseys,” Ram cautioned.That aside, the Chartered Accountant explained that in a liquidation of any entity, monies acquired from the sale of assets are supposed to be placed in a pool and distributed equitably among persons owed by the entity, ranked according to their status – preferred,Wholesale Nike NFL Jerseys, secure or unsecured.He noted that things like unpaid employees’ earnings, their PAYE and NIS, rates and taxes and corporate taxes for one year are called preferential,Cheap Sports Jerseys, meaning that they must be paid first.It was stressed that instead of following this process,Nike NFL Jerseys China, the building was transferred to the NIS and the value used to clear a small part of the debt owed by CLICO to the NIS.“This illegality is a backdoor contribution to the Scheme at the expense of ranking creditors, which may even include the Guyana Revenue Authority,” Ram pointed out.Kaieteur News understands that whenever the NIS investment is raised at the Board, it is “hurriedly brushed under the carpet.”Finance Minister Dr Ashni Singh, on Friday last during the budget presentation failed to make mention of the NIS investment in CLICO (Guyana).To date,China Jerseys, the Government of Guyana is the only government in the region that has refused to investigate CLICO’s domestic operations.Dr Singh in his Budget presentation reported that in 2011, the task of resolving the domestic chapter of the Caribbean-wide CLICO saga continued.“I am pleased to report that following the granting of a liquidation order by the Court, some 7,744 policyholders were paid a total of $4.1B.Ram & McRae in its response to the Budget Speech, countered by showing that $3.6B came from government funds and itself constituted phase one of a bailout.The Finance Minister said that the repayment process will continue, and the liquidator intends to garner additional funds through the sale of company assets and legal actions with respect to the parent company and other regional subsidiaries.This leaves the cash-strapped NIS, still banking on the State guarantee for the safe and timely return of its investment. |
