(SNO) – Opposition Leader Philip J. Pierre has accused the government of spending more money than it makes and has shown not to be enthusiastic with the terms under which the government was able to borrow $100 million from the National Insurance Corporation (NIC) to settle two bonds that matured last week.
Pierre, today (August 6, 2018) at a press conference, told reporters that pensioners will be making a one percent profit from government’s borrowing of $100 million from the NIC, seeing that the money was loan to the government at an interest rate of one percent.
He compared that to the 7.25 percent interest rate government was able to sell its most recent set of bonds.
Pierre wants to know who are the persons or companies that have brought bonds from the government, lamenting that the names of such persons or entities should not be shrouded in mystery.
The opposition leader then attempted to take the wind out of Minister Ubaldus Raymond’s sails when he (Raymond) applauded the Ministry of Finance for being able to sell the recent batch of government bonds at a 7.25 interest rate.
Raymond, who is the minister responsible for finance in the Office of the Prime Minister, yesterday described as “good news” government’s ability to negotiate its latest bonds at a 7.25 percentage rate, a quarter of a percentage point less than the previous set of bonds it issue.
Minister Raymond noted that the 7.25 percent interest rate secured for the new set of bonds was done in an environment where interest rates were growing, therefore to have secured that number showed the confidence of investors in his government and in the economy.
But Pierre dismissed Raymond’s boast, saying that government was able to secure a 7.25 percent interest rate on its bonds simply because “interest rates are doing a particular thing”.
The leader of the Opposition stated that the government can pay the NIC the $100 million it borrowed at the August 26 stipulated date, if the government manages to sell its new set of bonds, however this will not be new money coming to the country, it will just be a transfer, and that the country will get nothing out of this transaction.
Pierre called on Minister Raymond to be open and frank with the citizens of the country by telling them that the country has been running on an increasing deficit.
“When the UWP came into power on June 2016, the deficit on current accounts had been reduced from nearly nine percent when we took it over in 2011 to 3.4 percent. The government always prefers to pretend this does not exist. By their lavish spending they (government) have increased the deficit to nearly seven percent. This means that the government is spending more than it is getting. Without that money they could not retire the bonds,” Pierre said.