‘Madness!’
Hill wants idle multibillion-dollar pension funds to aid development
GOVERNMENT SENATOR Aubyn Hill has said the up to $360 billion in pension funds in Jamaica should be put to use to help with the economic development of Jamaica.
“We have to do significant changes to affect poor people’s lives through the pension money that is in this country. We have $350-$360 billion in pension money in Jamaica,” said Hill during his contribution to the debate last Friday on a bill to amend the Income Tax Act to extend the benefits on the junior market of the Jamaica Stock Exchange (JSE).
“Two billionaires – one named Michael Lee-Chin who was my boss at the National Commercial Bank, and the other one, Mr Denis O’Brien from Digicel – set up companies in Jamaica. They are millionaires – billionaires – got bigger out of investment in Jamaica, and our ordinary pensioners, by our rules, couldn’t invest in their companies. “That is madness!” Hill, who is the chief technical adviser to Finance Minister Audley Shaw, added: “We have pensioners. Their money is sequestered in largely government paper. They are restricted as to what they can invest, both in local and overseas investments, to get benefits for their later lives. That is a form of madness.”
OTHER CONCERN
Meanwhile, Mark Golding, leader of opposition business in the Senate, raised concerns about a provision in the bill that would require companies delisted or suspended before the expiration of the 15-year JSE membership, to repay all income tax that were waived for the incentives received.
“This is like a nuclear bomb that would drop on that firm if it were de-listed or trading in its shares were suspended. This could arise long after the incentive period is ended, because the 15-year period is longer than the 10-year period of the relief. The suspension is in and of itself a sufficient penalty to induce the company to rectify what has gone wrong.”
He added: “The causes of suspending of trading can be very broad, can be something very onerous, something very dangerous, or something undesirable for something less so. In this instance, there’s a liability to pay all of the tax that would otherwise have been paid had they not been listed on the junior market. That could be five years of tax at 100 per cent and five years of tax at 50 per cent. Where is the firm going to get all that liquidity to pay all that tax?”
The former justice minister also tried to explain that while the previous administration, of which he was a part, wanted to reconsider the tax benefits under the JSE, Jamaica’s performance under the International Monetary Fund programme resulted in a change in that position.
Early into his tenure, Shaw assured that the benefits for those listed on the junior market would continue.
The junior market was launched in 2009 to encourage and promote investment in entrepreneurship, employment and economic development.
The bill was approved.