Cozier raises questions over surplus

Richard Cozier. (FP)

Mon, July 09, 2012 - 12:00 AM

Banks Holdings Ltd’s chief executive officer Richard Cozier has cautioned against investing the majority of the National Insurance Scheme surplus cash in non-income-earning assets.

Speaking last Wednesday during a post-Budget breakfast discussion hosted by the Barbados Chamber of Commerce & Industry and PricewaterhouseCoopers, he said surpluses should be invested in a way that would allow one “to ride out the troughs that will come over time”.

The panellist, who was speaking in the absence of Barbados Private Sector Association head John Williams, said he was confused about this part of Minister of Finance Chris Sinckler’s presentation.

“There was a $10 million threshold then there was $1 million going to one fund, then there was a $5 million.

“I wasn’t sure if they’re independent millions coming out or if they’re cumulatives, but it seems as if there was a lot of surplus and the surplus [was] in some cases going to income-earning assets but in some cases [it was] going to non-income-earning assets,” he said.

According to Cozier, the “funny thing” about surpluses is that what is a surplus today can be a deficit tomorrow.

In his presentation, Sinckler said the National Insurance Board would be directed to establish a Hotel Refurbishment, Energy Efficiency and Food Production Fund as part of its investment portfolio.

“The fund will initially be capitalized with $18 million of the NIS surpluses. For the next twelve months, in every month where the NIS earns a surplus of more than $10 million, $1 million of that surplus will be directed to further capitalization of the fund,” he said.

Sinckler noted that for the next five years, in every month where the NIS earns a surplus of more than $10 million, $4 million of that surplus will be directed to further capitalization of the fund.

In addition, he said some of the funds will be used to assist the University of the West Indies, Barbados Community College, Samuel Jackman Polytechnic, Sixth Forms, and Special Education Projects in Barbados. (NB)