D.F.C. and Social Security; big issues in House
There was little advance spin in the run up to today’s meeting of the House of Representatives, but that didn’t mean the issues before the legislature weren’t important. News 5’s Janelle Chanona reports on the debate.
Michael Finnegan, Area Rep., Mesopotamia
“Because I know that the Prime Minister that heads this government is a man that is of compassion.”
(Dean Barrow makes to get up, Finnegan chuckles)
Anthony “Boots” Martinez, Area Rep., Port Loyola
“I want to wish you, I want to wish the staff of the National Assembly, I want to wish Mrs. Sylvia Flores a happy Mother’s Day, I want to wish members of my constituency a happy Mother’s Day. And I wish that the Honourable Prime Minister…he says, “go Belize, go, set us free, I hope the Prime Minister would set the U.D.P. free.”
Janelle Chanona, Reporting
Today, things were on the lighter side of life in the House of Representatives as the elected members met for the first time to conduct business since the March fifth elections.
But things got heavy fast… The number one issue? A one hundred and forty million U.S. dollar attempt to refinance the Development Finance Corporation, D.F.C.
Ralph Fonseca, Minister of Finance
“We propose to raise these funds by issuing two sets of bonds in the capital markets through the following institutions, Citi Bank, Trinidad and Tobago, U.S. forty million dollars, Bear Stearns and Company, Inc., U.S. one hundred million dollars. The proceeds of these bonds will be used to refinance shorter term notes issued through earlier mortgage securitization traunches, and will also be used to improve the maturity structure of debt incurred to finance housing development and key agricultural projects across the country.”
Dean Barrow, Leader of the Opposition
“Basically what is happening is that D.F.C. is broke. All the bad loans that D.F.C. made to favourite Belizeans, Belizeans favoured by the ruling party, which are not being serviced, all the bad investments in terms of projects like Los Lagos from which there are no returns. All this means that D.F.C. cannot pay its current indebtedness. So what this is, is really borrowing to pay off the current indebtedness and so in effect, it is postponing the inevitable. Once again the new loans will have a grace period of about two years and thereafter the whole vicious cycle starts all over again. Also, the terms and conditions of the loan, the minister is saying in introducing the motion that the terms and conditions are more favourable than the terms and conditions of D.F.C.’s current indebtedness. Well that has to be nonsense, because these are commercial loans that they are making, D.F.C. is a development institution, which basically ought only to borrow from concessionary sources.”
Ralph Fonseca
“That is a very clear example of the difference in thinking between the U.D.P. and the P.U.P. The U.D.P. way of thinking is, do nothing; let things just happen. He went on to expand on that by saying that D.F.C. should only borrow where concessionary financing is available. Well if concessionary financing is available to easily, why is it that when they were in office, two times, they did nothing with D.F.C. Every time they left, the net asset value of D.F.C. was the exact same as when they came, every time. Why, if concessionary financing is so easy to get, why did they not go out there and get a couple hundred million and get things going, or did they not want Belizeans to have houses, or did they not want Belizeans to have their own farms. Or did they not want the average Belizean to be able to compete in the tourism industry. Or did they not want Belizeans to study. Or do they just not understand, or are they just talking for talk sake.”
Dean Barrow
“I know there is an audit in process by Deloitte and Touche of the D.F.C. We want access to that audit when it is completed. And we are serving notice Madam Speaker that Deloitte and Touche, we don’t want any garbage in garbage out, the values on assets that the D.F.C. will supply, must be scrutinised properly by Deloitte and Touche. I believe there is a compliance section of the head office in New York. I, as Leader of the Opposition will be writing to the compliance section of Deloitte and Touche, telling them that this is a matter of paramount national importance and they must make sure that Deloitte and Touche carries out that audit properly, we want pair review of that audit.”
Prime Minister Said Musa
“It is not throwing good money after bad. In fact, what it is doing is managing the money, refinancing D.F.C. if you like, without the government or D.F.C. for that matter, taking on additional debt. It is taking on new debt, but this debt will be used to pay off old debt and in the process we will be able to make some savings, but most importantly, we will be able to improve the cash flow of the Development Finance Corporation.”
Money was also at the heart of the next hot topic…a bill proposing to increase Social Security benefits and payments had its first reading today.
Ralph Fonseca
“At present, the rate of contributions is seven percent of insurable earnings, which is far below the rates in most of the Caribbean countries. For example, in Anguilla, St. Kitts and St. Lucia, the rate is ten percent. In Antigua the rate is eight percent, in Dominica it is ten percent. In the British Virgin Islands it is eight point five percent, while in Trinidad and Tobago it is eight point four percent. In addition, our several actuarial reports have consistently recommended an increase in the rate of contribution, particularly for the sustainability of the long-term branch of the Social Security scheme.
“In view of these compelling factors, we have decided to fortify the long-term branch by increasing the rate of contribution from seven percent to eight percent of insurable earnings. The additional one percent will be shared equally between the employer and the employee. This means that up one hundred and thirty dollars of insurable earnings per week, the employer will pay six and a half percent and the employee will pay one and a half percent. After that amount, both the employer and the employee will share equally. I must also mention Madam Speaker that in keeping with the usual progression of salaries and economic realities of today, we have decided to further expand the insurable earnings ceiling from three hundred and twenty dollars per week to six hundred and forty dollars per week.”
Dean Barrow
“You can’t just slide by us an increase in Social Security contributions by way of regulations that will not be debated. Regulations I know…regulations are not debated.”
Ralph Fonseca
“Point of order Madam Speaker, point of order. This is anticipation, we were very clear…we just heard the Leader of the Opposition complain that he didn’t have enough time to discuss the restructuring of D.F.C. because he only got his papers yesterday, he just finished crying about that. Now he was down town defending whatever in the courts in Belize, he missed the presentation that I made and now he wants to debate the Social Security reform process, which was introduced today into the House, and which will have ample time going through committees and will have ample time for debate here. This is precisely what I said in my introduction, that’s why the introduction was so lengthy. It explains in detail that at the time of the debate the S.I.s would be laid on the table so that those could also be debated at the same time. That set the framework and he is not able to talk about Social Security today.”
Dean Barrow
“…to talk about Social Security, I’m just not able to talk about the bill Madam Speaker, because that is up for debate. The fact that it has been announced that there will be an increase in Social Security is a matter that I can raise. I’m not getting into the bill, and regulations will not, regulations are never…In fact, I will make it plain Madam Speaker that I think he is speaking from ignorance.”
Knowledge of the constitution, or lack of, was topic number three, the George Herbert/Liston McCord case.
Janelle Chanona
“There are still sentiments that what happened was unconstitutional. How can you explain finally to the Belizean people that that was not the case and this wasn’t a situation where the U.S. was saying do this or else.”
Prime Minister Said Musa
“My understanding is that the request did come from the United States Government for their extradition, but that it came within the context that they had been holding discussions with these people. And in that context, the case was made that they voluntarily were prepared to submit to the U.S. jurisdiction, and that is the position as reported to me and that is the position I am standing on. If that is so, then there has been no violation of the constitution because people are entitled to waive due process in the extradition proceedings.”
Janelle Chanona
“But since that time, we haven’t heard personally from Mr. McCord or Mr. Herbert that they did in fact waive their right in that regard, so…”
Prime Minister Said Musa
“They have disputed that as I understand it and so have the families. But I’m saying, what the position of the government is. We have been assured that they will be afforded the due process in the United States courts. I think it is also important to bear in mind that we’re dealing here with a crime, a trans-national crime and the rules of the game have somewhat changed in terms of the drug trade, which has become not only a billion dollar industry, but an industry that is fuelling increased criminal activity in all our countries in the Caribbean, whether it be in fuelling firearms proliferation, murders, theft, you name it, money laundering, it’s a major issue.”
And no doubt, all three of these issues will continue to simmer for quite some time. Reporting for News 5, I am Janelle Chanona.
