LOSING $45 billion to the Government over the next four years means the National Housing Trust (NHT) will be offering fewer solutions to its contributors over the period.
Board member Lambert Brown said as much to the Jamaica Observer in an interview on Friday in which he defended what he termed "the Trust's decision to assist in the country's economic recovery".
At last Tuesday's sitting of the House of Representatives, the Government approved a raft of revenue measures, which included a $16-billion tax package and the lifting of $45.6-billion from the NHT over four years for budgetary support.
Asked if the drawdown of the funds was going to affect the number of houses the Trust builds, Brown answered in the affirmative.
"It must. We concede that, but it is only part of the issue," he said. The other part of the issue, he reasoned, had to do with the current state of the economy and the ability it afforded people to buy houses.
"We could build thousands of houses this year and nobody could buy them. It would be sitting down there as an inventory upon us. We'd have to be paying maintenance, security [and a host of other costs]," he said, adding: "We have to look at the bigger picture... We have to look long-term."
Brown, who is also a Government senator, said although the drawdown would have some impact, it would not be significant.
"We may not be able to spend as much as we spent last year on housing, but we're going to spend significantly on housing this year, next year, the year after, and the year after and hopefully with improvement in the economy, we'll be in a better position," Brown said.
The transfer of funds will be done in equal tranches of $11.4 billion per year, but at least one civil society group has come out in opposition of the move. Arguing that only beneficiaries can authorise monies to be taken out of the Trust, Citizens Action for Principle and Integrity (CAPI), which is headed by former Jamaica Labour Party caretaker for North Trelawny Dennis Meadows, has threatened to take the Government to court.
But Brown is confident the NHT board's decision can stand up to legal scrutiny.
"We invite anybody who wants to challenge this to seek a legal declaration in the courts. We have done the legal studies and we are satisfied with what we're doing," he told the Sunday Observer.
"The country faces a national crisis and the Government as regulator allows it to call upon government agencies to assist it. In this situation the board has taken a decision to contribute to solve the national emergency economic crisis. If this is not solved, then there'll be thousands of workers without jobs, unable to pay their mortgages to the housing trust, unable to get houses in the future, unable to buy houses. So the trust has taken, in its wisdom, a decision to really look at all the monies, how it spends it. We're going to still focus on building houses, especially for the poorer section of society. We're going to run the Trust much tighter, but the national economic emergency has to be addressed," Brown maintained.
Without the NHT's intervention, he reasoned, the $45-billion the Government needs would be borne by taxpayers.
"Think of it, the taxpayers of this country would have to bear $11 billion more each year in taxes if the surplus from the Trust -- for a short period, not for eternity -- hadn't been used towards contributing to solving this economic crisis. So, rather than make the dollar run away, rather than make interest rates run away, we contribute from our surplus to be able to put the country in a better position," he said.
In a release to the media late Friday evening, NHT Chairman Easton Douglas sought to assure contributors that they would not be at a disadvantage as a result of the new arrangement.
He said the discussions between the Government and the NHT were still in progress and that it was "far too early to say definitively how the programmes of the Trust will change over the period".
He stressed, however, that the Trust's mandate will not change as it will "continue to play its part as a major player in the housing construction industry, but will focus its efforts on the lower income earners and the improvements of community living conditions for our contributors.
"We will also seek to support initiatives which create jobs in the construction industry," Douglas said.
Meanwhile, a well-placed NHT insider, who spoke with the Sunday Observer on condition of anonymity, said it would have been better if the NHT had loaned the Government the money. "Perhaps what they should have done is give the money as a loan because now, what are we getting in return?"