Thu | Jan 17, 2019

'IMF stance surprising' - Fund chided for supporting 'raid' of NHT

Published:Friday | February 15, 2013 | 12:00 AM

Gary Spaulding, Senior Gleaner Writer

Minutes after a team from the International Monetary Fund (IMF) cancelled a meeting with the Jamaica Labour Party (JLP), the parliamentary Opposition described as "surprising" the IMF's reported endorsement of the Government's tax package that was unveiled on Tuesday by Finance Minister Dr Peter Phillips.

Both Opposition Leader Andrew Holness and Spokesman on Finance Audley Shaw refused to mince words yesterday, as they reacted sternly to the reported decision by the IMF to influence the decision by the Government to not only impose a new tax package of $15.9 billion on Jamaicans, but to raid the National Housing Trust (NHT) of $11 billion per year over a four-year period as well.

"I am surprised at the IMF that they are supporting this kind of scandalous raid on a trust fund," declared Shaw during a press conference at the JLP's Belmont Road headquarters in New Kingston yesterday.

"I am surprised that the IMF is prepared to join with the Government in this tax package that has no rhyme or reason except to attack the productive sector," the opposition spokesman added.

"I am surprised that the IMF appears to be supporting this, it is scandalous and I am telling them that they better look at it again."

Shaw also expressed "surprise" that the IMF had "partnered" with the Government to "raid" the NHT instead of pushing for a sustainable tax-reform programme to advance the economy.

Possible legal battle

Holness also came out swinging, as he issued a stern warning to the Portia Simpson Miller administration that it might be dragged before the court for illegally raiding the NHT.

He served notice that his team was awaiting word from a battery of attorneys it has commissioned to examine the legality of the Government's decision on the NHT.

The opposition leader also urged the Government to seek legal advice from the Attorney General's Department before touching the NHT funds.

"We questioned the legality of it and we are examining it now and we make the public call that the Government should also seek the advice of the solicitor general on this matter," said Holness.

"We are of the view that it is illegal, either they change the law or they abandon that course."

Asked if any reason was proffered by the IMF team for the sudden cancellation of the meeting, Holness said "no".

"I do no wish to speculate," Holness told journalists. He, however, expressed disappointment with the cancellation as well as the move by the IMF.

For his part, Shaw described the plans by the Government to dip into the NHT as the "most phenomenal and the most monumental raid of a trust fund in the history of this country".

"I have to ask whether the board has approved this," he said. "And I have to ask whether it is a giveaway or a loan to the Government of Jamaica and if so, what are the terms?"

Added Shaw: "I have to ask the question whether the attorney general of Jamaica has approved this scandalous deal and I have to ask the question how will it affect the ability of the NHT to fulfil its mandate."

Shaw contended that in dipping into the fund to extract $11 billion yearly, the Government was actually depriving the fund of 50 per cent of its equity. "To get up in Parliament and suggest that it will have no negative impact on the NHT, who does the minister think he is fooling ... ?"

He said 50 per cent of the equity amounts over four years to approximately $1 billion per year.

"On one side, you're building equity by $1 billion per year and on the other you take out 11 billion," he scoffed.

According to Shaw, the NHT is responsible for all 60 per cent of the housing solutions in Jamaica today, while there is a demand for at least another 500,000 housing units in the country.

"Instead of redirecting the resources of the NHT to deal with that demand, the Government has opted instead to raid the NHT in order to support the Budget," complained Shaw.