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NHT's accumulated fund of $46.3b and annual net surplus of $2.8b indicate that the organisation is more than adequately capitalised.

Robert Wynter, Contributor

In part two of this article series, I concluded: When we have an efficient, right sized public sector, the bureaucratic barriers will be removed, resulting in entrepreneurship flourishing, real growth, increased job opportunities and individual citizens being facilitated in their daily lives. This is best manifested in the fact that transforming the public sector can go a far way in financing the transformation of the education system as per the Task Force report."

The Dr. Rae Davis-chaired Task Force on Education Reform report was submitted to the Prime Minister in September 2004 and laid in parliament in December of that year. While the report has been well accepted in most quarters, the main challenge appears to be the resources required for implementation. An additional J$17.7 billion (2004 dollars) recurrent expenditure and $5.9 billion (2004 dollars) capital expenditure is required on average each year for the 10 year period for transformation to achieve the National Shared Vision. The question is, therefore, where will we find this $23.6 billion annually?

In part one of the series, I stated that in MoU-1, the then projected $5 billion annual savings (in holding increases to 3 per cent) paled in comparison to the estimated $10 billion opportunity lost in (annual) savings had there been rationalisation of the public sector. This refers to central government and does not include the parastatal organisations. Rationalisation of these organisations can provide substantial savings and I use the National Housing Trust (NHT) as an example.

Annual Report and Financial Statements

The NHT's 2004-05 Annual Report and Financial Statements indicate a surplus of $2.8 billion based on $3.4b income on mortgage operations and $3.3b income on investments (primarily Government securities) and $4.3b operating expenditure. This $2.8b surplus is simply operational and does not include the non-refundable employer contribution of $3.5b and the refundable contribution (net) of $2.3b. Total loans provided during the year was $4.13b and this was limited not by demand or need but by the internal limitations of the NHT itself. NHT's accumulated fund of $46.3b and annual net surplus of $2.8b indicate that the organisation is more than adequately capitalised after 30 years of operation and really do not need any more injections from employee or employer contributions. This estimated $7b, we believe, is more valuable to the country in funding the transformation of education rather than in funding Government's debt.

The $10b annually from restructuring central government and the $7B annually from redirecting NHT deductions provide $17B which will go a far way in meeting the $23.6B required for transforming education. Several legislative changes are required, particularly in the instance of the NHT. I am not expecting the management or the board of the NHT to take such decisions, nor am I expecting any permanent secretary, statutory board chairman or CEO to take a decision to restructure. First of all, it is in their best interest to maintain the status quo and secondly, they are hamstrung by MoU-2.

While it is also in the best interest of the Cabinet to maintain the status quo, as short term job retention seems to politically outweigh long term national development, the decision must be theirs. This is where strong leadership and political will are required from the Prime Minister.

Robert Wynter is a partner in the firm Growth Facilitators. Email:robwyn@cwjamaica.com.