CHAIRMAN of Parliament's Public Administration and Appropriations Committee (PAAC) Edmund Bartlett has said that the public sector must lead the way in the handing over of the various Pay As You Earn (PAYE) contributions to be able to address the issue in the private sector with a clear conscience.

"The public sector must fulfil its obligations because it puts us in a very awkward position to say to the private sector you must comply when we the public sector are not complying," Bartlett said Wednesday while addressing the committee.

The PAAC chairman's observation came following a presentation to the group by Cecile Watson, managing director of the National Housing Trust. Watson, noting that the Fund had gone full tilt to ensure that employers turn over their employee deductions, said the Trust is still owed by the Government.

"For the public sector, there are some arrears (in NHT payments) outstanding as well. We have been working with the Government to remain current and they have to a large extent; most agencies are current in their contributions. Where we have some challenges are previous years when no payment was made in terms of the employer contributions and we are working through that process with the Office of the Prime Minister and others to see how we can go about collecting those arrears," she explained.

She said the proposed changes under the Government's tax amalgamation project, which will see employer's filing one annual return, will help in this area.

"...There is one annual return that not only deals with the NHT component but the NIS (National Insurance Scheme), HEART, etcetera, helps because there is also a criminal element to it for failure to accurately report so, therefore, you can no longer do NHT and not the others, and there are multiple agencies that are following up to ensure that the payments are made," Watson noted.

In the meantime, she said the special reduced rates announced by the Government in the recent budget and came into effect earlier this month will not affect the NHT's performance targets.

Prime Minister Simpson Miller, during her contribution to the budget debate, had announced that effective September 1, 2012, contributors of the NHT who qualify for loans at three per cent interest will now only repay at one per cent, while contributors who qualify for loans at five per cent will now pay only three per cent. These special reduced rates will apply for three years. In addition the state granted the National Housing Trust (NHT) tax-free status in respect of General Consumption Tax (GCT), stamp duty, property tax and transfer tax for the next two years, as a means of providing affordable housing for low income workers, particularly persons who earn less than $10,000 per week.

"In terms of the impact on this year's performance, we are anticipating that this will enable us to book the number of loans we are expecting to book in this year. The Trust has housing expenditure of $25.3 billion this year and it is our expectation that in doing so we will skew more of our offer towards those in the lower income sector. So these policies really are intended to ensure that the benefits we put out there are taken up by the lower income workers," Watson told the committee.

However, she said the Trust had not measured the impact currently as "it is only one month so far", but said "there has been a lot of interest in these policies".

According to Watson, the impact on the Trust's mortgage collection projection will also be "minimal".

And the NHT managing director has assured that the agency's pool of contribution refund funds is safe.

"We have about $65 billion in terms of refunds and we have them invested in different ways, it is not all cash but it is accessible. The refund pool is part of our capital reserve, it is untouched because we have that obligation to our customers, some people don't apply for refunds for years and we have to ensure that when they do come we have those funds," Watson told the Committee.