Daraine Luton, Staff Reporter
Prime Minister Bruce Golding makes his contribution to the 2008-2009 Budget Debate in the House of Representatives yesterday. - Rudolph Brown/Chief Photographer
MIDDLE-INCOME Jamaicans who benefit from National Housing Trust (NHT) mortgages will pay up to 33.3 per cent more in interest rates on loans, Bruce Golding announced in his debut Budget Debate presentation as prime minister yesterday.
The revised interest rate structure, which takes effect on June 1, will see mortgages in the five per cent interest rate band moving to six per cent, and those in the six per cent, range moving to eight per cent, the prime minister told the nation during a marathon presentation in the House of Representatives.
NHT beneficiaries who earn between $10,001-$20,000.99 will now move to the six per cent band, and persons who earned $20,001 and over per week, will, move to eight per cent.
The increase in NHT rates comes days after Opposition Leader Portia Simpson Miller pleaded with Golding not to raise interests.
Simpson Miller told Golding during her contribution to the 2008-2009 Budget Debates last Thursday that the NHT was not in trouble.
Yesterday, however, Golding tabled a document entitled 'The Financial Viability Model: Proposals and Projections', which indicated: "For the year ending March 31, 2008, the financial projections for the National Housing Trust show the organisation registeringan operating deficit of over $500 million."
The trust's financial viability model forecasts surplus reaching $2.6 billion at the end of the 2012-2013 fiscal year. The trust had recorded a surplus of $528.1 million in the 2006-2007 fiscal year.
Golding, arguing the non-compliance of the past administration to pay over NHT deductions to the trust has contributed to its financial position, revealed the trust is owed $20 billion by Government.
The prime minister also blasted the former People's National Party government for using the Trust's funds to build houses under the Inner-City Housing Project (ICHP) and Operation Pride projects.
Use of funds
"I believe it is wrong to use NHT funds to provide houses for persons who have never contributed to the Trust, while many who have contributed are still waiting for a benefit," Golding said.
More than $2 billion in NHT funds has been spent on the ICHP of approximately $5 billion committed for the project. Another $3 billion of the trust's funds has been spent on Operation Pride projects.
The increase in the rates for NHT beneficiaries will result in increased revenue of approximately $2.63 billion over the five-year period, the document said.
In a swift response, Simpson Miller said the Opposition would be studying the NHT annual report and would be cross-referencing it with Golding's presentation.
"We are going to be double-checking what the annual report says and what Mr Golding said about the solvency of the fund. The annual report does not suggest that there is a solvency problem," Simpson Miller told The Gleaner yesterday.
|Interest rates ||No. of accounts ||% Value of portfolio|
|0% ||20 ||0.0|
|2% ||18,950 ||21.0|
|4% ||20,532 ||25.6|
|6% ||29,340 ||41.1|
|8% ||4,628 ||12.3|