EFFORTS by the National Housing Trust (NHT) to deal with the local housing demand is confined within a fiscal space determined by the Ministry of Finance and Planning, and subject to limitations imposed by the Government's relationship with the International Monetary Fund (IMF).
"The fiscal space is determined by the Ministry of Finance, and every year when we do our planning, they indicate to us what is the level of the fiscal space we have in terms of our housing expenditure. So we operate within the context of that number that is given to us," NHT General Manager Cecile Watson told Parliament's Public Administration and Appropriations Committee (PAAC) last week.
"So, the NHT's response (to the housing demand) is predicated on a prescribed allocation from the Ministry of Finance?" asked PAAC Chairman Edmund Bartlett.
"We do it in consultation with the Ministry of Finance," she responded.
Watson said that the NHT has taken the approach that when it comes to
the daily consultations with contributors seeking loans, "we will not turn away people".
"So, we look at the trends in the market, in terms of mortgages that are being written and we project what we would like to do," the general manager said.
"But, the NHT cannot by itself determine how it responds to the demand for housing that is out there, but rather the fiscal space provided by the Ministry of Finance," Bartlett insisted.
"I would say that is true in recent years, because of the negotiations that have been under way in terms of having an IMF programme," she admitted.
"In previous years, what would have happened would be that the NHT would look into this demand. It would have the capacity to spend based on its operational limits, and it would have spent in accordance with what demand is out there. I think in the last three years, certainly since I have been there, I would remember planning more than we were allowed to spend and having to contain our spending, based on the overall fiscal programmes of the Government.
"How recent is that?" Government member Denise Daley asked her.
Permanent Secretary in the Office of the Prime Minister (OPM) Onika Miller volunteered to answer that question in light of the fact that Watson has only been general manager of the NHT since 2010.
"Certainly, since the Government has been engaged in dialogue with the IMF, the issue of fiscal space has been something that has become more relevant to our self-financing entities and our public bodies than just being limited to central government entities, and so it would be dated certainly to the period since we have been engaged in dialogue with the IMF," Miller said.
Bartlett said that what was material was not when the procedure started, but to understand how the NHT spends its resources, within the constraint of a fiscal space that will be in place for some time.
"So, the point that we really want to make on this, which I think is very important, is that the NHT is not likely in the near future to be able to respond to the demand that is out there, as it has to respond in terms of the fiscal space that is provided by the Ministry of Finance, which will be a position obtaining for the next four years of an IMF agreement," the chairman commented.
But, the permanent secretary wanted it to be also stated that the NHT would continue to respond to the housing demand, within the context of the fiscal space.
"The NHT has always positioned itself to respond to housing demands, to ensure that it tries to serve all the best interests of all its contributors, but it has to operate within the confines of this fiscal space," Miller said.
"But, it is confined by a fiscal space that is not determined by itself. That's a very simple position," Bartlett concluded.