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Having earned annual interest of just $7 from one of his bank accounts, Prime Minister Dr Keith Rowley yesterday called on the business sector, NGOs and customers of commercial banks to invest in Government’s National Investment Fund (NIF), which he assured will generate higher returns on their investment.
As Rowley made the call during his contribution to the Corporation Tax Bill in Parliament, he also slammed commercial banks in T&T for their service charges passed on to customers.
Responding to Opposition MP Bhoe Tewarie, who stated that the NIF would not create an appetite for investment from the public, Rowley said the establishment of the fund was not a “willy-nilly” decision since they obtained the best advice from experts.
The public offering was made by Finance Minister Colm Imbert recently in a bid to recover $16 billion still to be repaid to the Government by CL Financial, which collapsed in 2009. The government bailed out the company to the tune of $23 billion. The assets of CL Financial are valued at $10 billion, while the fund is expected to generate $4 billion through the public offering.
Yesterday, Rowley said when they thought that the People’s Partnership had fixed the CL Financial issue they did not and a such the PNM was now seeking to recover $15 billion of taxpayers’ money from the bailout.
“The minute we mentioned NIF there were those who jumped out in front and was saying it would fail,” Rowley said.
He said there are people in the country, Opposition included, who object to everything the PNM puts forward.
“They have a negative outlook to it and some of them want it to actively fail,” Rowley said.
Looking at the commercial banks, the PM said citizens owned $103 billion in cash.
“Mr Speaker, a small amount of that is mine. I have a small account in a bank…very small, but small enough that I expect to earn something on it. When I get my bank statement I see that on my substantial amount of money in the bank I earned $7 in interest.
I can’t even buy gas to go and collect the $7. I am sure there are many people who would be hearing me say this now…who have significant sums in the banks earning next to nothing,” the PM said.
Rowley said some customers get zero interest.
“I am told the way these banks behaving, after they deduct charges you have to pay them to hold your money in the bank. That is why we expect that persons who are owners of this money will take the opportunity to put it in a situation to earn something on it.”
In light of this, Rowley said it would be wiser if the public, NGOs and businesses invest in shares of some CL Financial companies through a public offering - the NIF.
“In the public sector deposits in the commercial banks, there was $6.9 billion. That is taxpayer money in the public sector. State enterprise sector, $6 billion they have there. The private financial institutions, $10 billion.”
The businesses, Rowley said, amounted to $10 billion, while the private sector businesses had $25 billion and NGOs and sole traders accounted for $3.8 billion. He said some citizens had US$18 billion “in cash” at local commercial banks waiting to invest.
“And citizens of Trinidad and Tobago as individuals have $51 billion in T&T. And you want to tell me that we give them this opportunity to invest to the tune of $4 billion and they will turn their backs on it because we have done the wrong thing?”
Rowley said they had already advised people that even though they have “a small cacadah” to invest via the fund “to get good returns. I have every confidence that the bonds that the Minister of Finance will make available in the coming weeks, that the people of this country will not be advised by others but will be advised by those who wish this country well and they will participate in this bond.”
He said those who invest in the bonds will collect a return of 4.5 per cent over a five-year period without being taxed.
The 12-year bond, Rowley said, will guarantee 5.7 per cent return, while a 20-year investment will generate 6.6 per cent, saying there was a greater need for people to save and to contribute to T&T’s overall development.
Caroni East MP Dr Tim Goopeesingh, in response, described Rowley’s contribution as a “tirade of pavement talk and hogwash”.
Gopeesingh said when CL Financial collapsed nine years ago Rowley was part of the then government, pointing out that he (Rowley) has to take the blame for the CL Financial fiasco.
“The Prime Minister now owes us an apology for the debt he has cost this country for being part of that government,” Gopeesingh said.