In the midterm budget debate this week, the government has outlined important progress in moving our nation forward, despite the serious and complex challenges which we face.
We came to office during a time of crisis. Yet, despite the significant debt we inherited, we knew our policies needed to go beyond rescue, relief, and recovery.
We have worked to strengthen our fiscal position even as we invest in our people and our communities, strengthen our borders, and build more inclusive economic opportunities.
We turned a stagnant economy with historically high levels of unemployment and record budgetary deficits into record-setting tourism arrivals, 15-year lows in unemployment, healthy GDP growth, and an improving fiscal situation.
We are taking on some of our nation’s most difficult issues – problems which we believe must be confronted, including energy sector reform, new measures to fight crime, and action on dismantling our shantytowns.
We are also reforming NIB – the July 2024 rate increase announced earlier today by Minister Sears will be accompanied by comprehensive reforms, to improve customer service, reduce fraud and inefficiencies, strengthen financial accountability, transform the digital infrastructure, reduce administrative costs, improve the investment strategy, and make sure NIB is there for Bahamians when they need it.
Rates will increase by 1.5% in July, an increase to be shared by employer and employee.
Bahamians know the importance of NIB, which offers important benefits, and acted as a critical safety net during Hurricane Dorian and the COVID pandemic. NIB offers short-term social security benefits, including sickness, maternity, funeral and unemployment, long-term benefits, including retirement, invalidity, survivors, old-age pension, and industrial benefits, including medical care, injury, disablement, and death benefits.
Social security and insurance funds such as NIB in countries the world over are facing the same challenges we are, due to changing demographics, with fewer workers making contributions.
An Actuarial Review of NIB recommended increasing the contribution rate not just this year but every two years, for years to come. Those recommendations were repeated today by Minister Sears. These continued rate increases would be required in a worst-case scenario. A decision has yet to be made beyond the initial 1.5 % announced to commence on July 1, 2024.
As we move forward with comprehensive reforms, policy-makers will continuously evaluate the efficiencies gained, and consider the best path to delivering sustainability.
We advised last year that a rate increase would be implemented this July, in order to provide advance notice. We are aware of the burdens of the high cost of living, made worse by a global inflation crisis, and policy decisions will continue to reflect consideration of what is in the best interests of the Bahamian people.
