Finance Minister Invites Suggestions for Management of Education Fund

Finance and Planning Minister, Dr. Omar Davies, has invited suggestions from the Opposition, special interest groups and the public at large, regardingthe management of the Education Transformation Fund.
Dr. Davies invitation formed part of his response in the House yesterday (May 10), to Opposition Leader, Bruce Golding, who last week said the Government’s proposal to consolidate statutory payroll deductions into one block of funds, while plausible, should not be used as an opportunity to “arrogate to itself the right to allocate funds to what it considers to be the particular priority in the nation at a given period”.
Mr. Golding, who was speaking in the 2006/07 Budget Debate, also cautioned the Government against dipping into the pool of funds held under the National Insurance Scheme (NIS) and the National Housing Trust (NHT), at will.
Dr. Davies, in closing the Budget Debate, said: “The fact is what is being proposed is not to ‘rob’ the NHT but to legally reduce the percentage of wages allocated to that institution and to direct these additional resources to another fund created to facilitate transformation in education”.
The Minister told the House that “no firm decision had been taken concerning the new levels which will be assigned to the NHT, or the new levels to be assigned to education and training”.
“At present, a combination of HEART and Education Tax means that approximately six per cent of the total wage bill is available for education and training. If this figure could be increased by one and a half percentage points, 25 per cent above present levels, this would certainly provide a good start for the build up of the fund needed to transform education,” Dr. Davies said, noting that at the same time, the NHT would still have more than adequate resources to discharge its obligations, even on an expanded scale.
Dr. Davies said the decision to examine the existing pool of funds to which contributions were already being made, to determine whether the additional resources in the education system could be found, was one of two choices, the “first would be to impose a significant new tax package, adding at minimum about one per cent of GDP per year for the next several years”.
This, he said, had been rejected as the “administration is firmly of the view that those who are presently paying taxes are ‘maxed out’ and one could not reasonably seek additional resources from that group”. “The proposal being made is not to touch the institutional operations of any of the existing organizations- NHT, NIS and National Health Fund (NHF), there may be need for changes to formalize the Education Transformation Team. The only significant change would be to adjust allocation of this folio of 16 per cent of the wage fund to increase the amount available to education,” Dr. Davies explained.
Although aimed at different objectives, Pay As You Earn (PAYE), NIS, NHT, HEART and Education Tax deductions contributed by employers amount to 10.5 per cent of the total wage bill, and employees contributing 5.5 per cent, giving a total of 16 per cent of the wage bill.