Govt arrears to NHT now $20b - To clear $2.3b this year
published:
Friday | April 4, 2008
Susan Gordon, Business Reporter
Earl Samuels, managing director of National Housing Trust, says the land swap deal has not worked. - File
The Bruce Golding administration, this year, will pay the National Housing Trust $2.3 billion in employer contributions, a leap on the $10 million paid out in each of the last two years, the current budgetary estimates show.
The size of the new allocation is puzzling to Earl Samuels, who says the returns due from Government in the current year for the employees paid from the treasury would be about half the current year's allocation.
"We are looking at in excess of $1 billion per year," he said, noting that the exact figure would rest on the size of the Government payroll.
But it is also just about one-tenth of the multibillion-dollar arrears that Government owes the NHT, after years of not paying over the statutory contributions, as required by law.
Samuels said that bill has now climbed to $20 billion, inclusive of penalties.
NHT contributions are calculated at 5.0 per cent of gross payrolls, three per cent of which would be paid by the employer, and two per cent by employees.
Samuels said he could only speculate that the additional funds in the current budget were to deal with a fraction of the arrears.
Government's payroll up to February was $79 billion, but may reach $87 billion at the end of March, given the more than $7 billion average monthly salary payments over the last fiscal year.
But Finance Minister Audley Shaw - who inherited the NHT arrears from predecessor Dr Omar Davies - has already signalled that he anticipates that wages would climb by more than $14 billion under the new public sector pact being negotiated, which would push the bill to about $92 billion in 2008/09.
The previous administration had cobbled a deal with the NHT to swap land in exchange for some of the monies owed, but Samuels said that deal has not worked out well for his agency.
The land swap arrangement remains in place, he confirmed this week, but noted that some of the land parcels were found to be unsuitable for the development of housing.
"The Government land is not working out," he said. "We can't take land we can't develop or else we will increase our liability."
The Trust has to date acquired seven parcels of land under that deal.
susan.gordon@gleanerjm.com
NHT penalty
A 40 per cent penalty is charged per annum for late submission of NHT payments from employers and self-employed persons. In addition, a surcharge of 10 per cent on penalty, plus arrears, is charged where the sums payable are outstanding for more than one year.
