“The Government insists that the extraction of these funds will not affect the NHT’s ability to provide houses and mortgages to its named and uniquely numbered contributors. That is nonsense!”


The Government’s decision to expropriate $44 billion from the NHT must be seen in the context of the rock and hard place between which it finds itself and the imperative of reducing the fiscal deficit to satisfy the requirements of an IMF programme.

The alternative would be drastic cuts in public expenditure that it finds unpalatable and/or heavier tax increases that are not only just as unpalatable, but unrealisable.

It is to be noted that, despite some $45 billion in new taxes imposed over the last five years (not including the recent $16-billion package), revenue collections have increased by less than 30 per cent while inflation (already built into most taxes) has been around 50 per cent. It is clear that the economy has little or no capacity left to cough up more taxes, the inefficiencies in tax collection notwithstanding.

However, this extraction of funds from the NHT must also be seen in the context not only of the NHT Act, on which the courts are now being asked to pronounce and which the minister of finance has declared his preparedness to have Parliament amend if necessary, but also of the moral obligations implicit in the management of NHT funds.

The NHT, as its name asserts, is a trust fund. Every cent of contributions that flows into the Trust is made by or on behalf of a person with a name and a unique number. Its purpose is to offer housing benefits for those named and uniquely numbered persons.

The Government’s role, exercised through the board of directors it appoints, is to manage those funds in an efficient way to ensure the maximum benefits to those named and uniquely numbered persons.

Some have posited that the income earned from investments made by the NHT constitutes a “surplus” that the Trust, ie, the Government, is free to disburse as it chooses. I adamantly disagree. This income belongs proportionately to the

named and uniquely numbered persons whose monies were so invested.

It is no different from income earned from investments made by a company that properly belong to its shareholders and is not a “surplus” to be dispensed by its managers at will.

The Government insists that the extraction of these funds will not affect the NHT’s ability to provide houses and mortgages to its named and uniquely numbered contributors. That is nonsense! The $44 billion that is to be paid over to the Government is money that would otherwise be available to provide houses and mortgages to its named and uniquely numbered contributors.

At an average cost of $4 million per housing solution, it means that 11,000 families that could have received benefits over the next four years will not now do so. The thousands of jobs that the provision of these housing solutions would have created will not now be created.

This is not the first time that a Government has raided the NHT for funds. $5 billion was extracted in 2005 to fund the Education Transformation Programme. Other funds were extracted to finance the Inner-City Housing Programme to provide houses for persons in dire need, but the majority of whom had never contributed a cent to the trust fund and were therefore not among the named and uniquely numbered contributors.

Repayment of the mortgage loans in this programme has been a predictable disaster. I am on record as being in opposition to the use of NHT funds in both instances.

It is grossly unfair to the named and uniquely numbered NHT contributors, who see these NHT deductions recorded on their pay slips every week, fortnight or month but who, despite repeated applications, have never been able to secure a benefit from the NHT. Many are told that they don’t qualify. How then does the Government qualify?

Having said all that, we must return to the fiscal dilemma confronting the Government, the implications of which could have bizarre consequences for everyone, including the named and uniquely numbered NHT contributors.

The NHT represents an attractive store of cash. It receives $21 billion in annual contributions and earns an additional $10 billion from investments (including mortgage collections). Despite its obligations to refund employees’ contributions after seven years ($3 billion annually), it is cash-rich. A Government faced with a fiscal crisis will inevitably look to this cache of funds to bail itself out.

There are ways in which this can be done without violating the fundamental moral obligations the Government has toward the NHT. One way would be for the NHT to provide a loan to the Government. This would be repayable with interest and the NHT would then book it as an income-earning investment, thus not affecting its balance sheet.

It is understandable that the Government would not be able to accommodate this option as it would simply add to its debt stock — a no-no for the IMF agreement.

There is another way that would have been painless. The NHT is in the business of providing housing which requires land. It would have been a much better way for the Government to provide land in exchange for the $44 billion. The NHT maintains a land bank to facilitate its house-building programmes.

There are fast-growing urban centres across Jamaica (eg SpanishTown, OldHarbour, May Pen, Christiana, Spaldings, Santa Cruz, Savanna-la-Mar, Montego Bay, Ocho Rios) with large numbers of NHT contributors who are and will increasingly be in need of housing. In most of these areas there are large tracts of unutilised Government-owned lands that could be transferred to the NHT, at market or even discounted value, in exchange for the $44 billion.

There are other non-housing-related Government-owned assets that could make up any shortfall and be treated by the NHT as investment assets. This approach would still reduce the ability of the NHT to provide benefits in the four-year period, but these benefits would be available in the future, the Government’s cash need would have been met, the NHT balance sheet would not have been affected, and the trust implicit in the operation of the NHT would not have been violated.

This is the method that was used to allow the NHT to fund the building of new barracks for the JDF. It is a template that could have been used to find a more appropriate solution to the current fiscal crisis.

An inescapable concern that this action evokes is whether, over time, the NHT will be treated, more and more, as a supplementary Consolidated Fund. And how long will it be before the NIS Fund is brought within the same grasp?

What implications does this have for pension reform, where we are contemplating a segregated fund into which public sector workers will be required to make payroll contributions to finance their pensions but which will be within Government’s reach to address fiscal crises that will arise from time to time?

Bruce Golding

Former Prime Minister



Filed under Uncategorized


  1. Nice to hear from Mr. Golding. When the JLP warned the people of Jamaica about the PNP the majority of the voters did not listen, so now they watch as the PNP does what it is best at, destroy Jamaica.

  2. Chevx

    This is just unsatisfactory I tell you..I cannot believe that the citizens, the contributors are just gona sit and watch them quitely as the “thief” the money that we work and sweat so hard for..but as the VW advertisement promotes..”No problem mon”..This action sicks me..

  3. beewolf

    Wonderful to actually be reading an article from the former Prime Minister. If the government can hand over crown lands to China Harbour Engineering Company they could do the same for NHT. I also think it is improper for the parliament to change the law so that the government can legally dip in the investment of the the named and uniquely numbered NHT contributors.The permission should only be given by such named and uniquely number NHT contributor.

  4. karl chung

    Good to see you back again .

  5. Laing

    should have never resigned

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