THE GREAT NHT ROBBERY

Gordon Robinson, Contributor

iRecently, PNP apologists have been pointing to the regular transfer of funds from Petrojam to the Consolidated Fund as a precedent and justification for the latest raid on National Housing Trust (NHT) funds which, as I've often written, I consider illegal.

As usual, in the mad rush to promote the politically expedient, inherently flawed two-wrongs-make-a-right argument, not even the argument itself has been accurately crafted. Even if the transfer of funds from Petrojam to the Consolidated Fund had been analogous to what is intended for the NHT, it would have been as wrong as is this abominable mortgaging by the NHT of its contributors' future for at least five years.

But the attempted analogy has no foundation. The reality is, Petrojam is not a statutory body in possession of a fund created by legislatively enforced contributions from citizens for a specific purpose (namely, housing solutions for the 'most vulnerable') as is the NHT.

One at a time:

• NHT is a statutory body; Petrojam is not.

The NHT is created by the National Housing Trust Act. Accordingly, it can do nothing unless so authorised by that statute. Any authority purportedly given to the NHT by an act of Parliament must not be inconsistent with any provision of our written Constitution.

Petrojam (Petrojam Limited) is a limited-liability company with two important shareholders. The shareholders are Petroleum Corporation of Jamaica (PCJ), itself a statutory corporation with wide powers wholly owned by the Jamaican Government; and Petróleos de Venezuela, a wholly owned subsidiary of the Venezuelan government.

• NHT has no shareholders; Petrojam has two shareholders.

The consequence of this is that whereas NHT has no basis whatsoever for paying money to the GOJ or anyone else save pursuant to its statutory remit, Petrojam's board of directors may, as is the case in every limited-liability company, declare that dividends be paid to its shareholders. PCJ is a statutory corporation with a statutory mandate to engage in commercial activity for its owner, the GOJ. Its revenues are GOJ's revenues.

• NHT holds trust funds; Petrojam does not.

The NHTA creates a 'trust' into which 'contributions' from employees, employers and 'voluntary contributors' [see NHTA, Section 11 (1) (c)] are paid. Petrojam operates a commercial oil refinery.

NHT 'contributions' don't belong to it; Petrojam earns its own revenues.

Employees' contributions are refundable after seven years (Section 21). Employers' contributions are made on behalf of employees (Section 12). These are the sole sources of Trust funds. Petrojam's funds are earned, not contributed.

Why are otherwise intelligent persons twisting themselves into knots to defend this indefensible rape of poor people's assets? Do they fear political alienation? Or are their thought processes subject to political imperatives? Do they prefer the embrace of the political herd and the apparent safety of an unrocked boat to the lonely life of the righteous?

Jah is my health and my

strength.

So whom shall I fear?

He is a shield upon my right and

my left hand

so whom shall I be afraid?

Jah is my Keeper

So, for a limited-liability company, Petrojam, to declare a dividend to its shareholders, is standard operating procedure. If one of the shareholders pays the dividend to its sole owner, GOJ, which elects to pay same into the Consolidated Fund to be used for 'fiscal consolidation', that's well within its power.

This brings me to the Consolidated Fund, a constitutionally created creature. Section 114 of the Constitution provides:

"114. There shall be in and for Jamaica a Consolidated Fund, into which, subject to the provisions of any law for the time being in force in Jamaica, shall be paid all revenues of Jamaica."

Immediately, it can be seen how a dividend earned by Jamaica as the owner of a Petrojam shareholder finds itself into the Consolidated Fund as revenues earned by Government or to which Government is entitled. No problem.

How do funds get there?

The question is: How do refundable contributions by employees, paid to NHT in trust for a specific national and individual benefit, as well as matched employers' contributions handed over to the Trust 'on behalf of' employees, arrive in the Consolidated Fund?

Because employees' contributions to the NHT are refundable, they're not tax deductible. But, by Section 13, employers' contributions, which are non-refundable, are expressly denoted 'expenses' to be deducted from income in calculating income tax liability.

"13.(1) For the purposes of Section 13 of the Income Tax Act, employers' contributions under this act shall be treated as expenses wholly or exclusively incurred in acquiring income."

In no way can these funds be described as "revenues of Jamaica". Since the employees' contributions are refundable, they are not taxes, nor do they belong to anyone but the contributors themselves. Because contributions are refundable, they aren't "expenses". They are simply enforced savings handed over to trustees for safe investment in prescribed situations and for specific purposes, until such time as they may be refunded.

Employers' contributions, on the other hand, are expressly designated as "expenses" for the purposes of the Income Tax Act. Accordingly, there can be no doubt that these are not taxes. A payment can't be a tax-deductible expense and a tax at the same time. Furthermore, these employers' contributions, payable "on behalf of" employees, are equally trust funds in the hands of the trustees as are the employees' contributions themselves.

At no time can these funds be placed into the Consolidated Fund. In order to do so by act of Parliament (as has been crudely attempted), it would first mean a vulgar confiscation by Government of these purpose-designated contributions in contravention of the property rights enshrined in our new Charter of Rights.

Furthermore, this alleged amendment is an attempt to convert a 'contribution' into a tax. This because, once the monies have been paid into the Consolidated Fund, they can no longer be refunded to the contributors. Accordingly, the sums, formerly belonging to contributors, now belong to the Government. That process is called taxation. But this is logically and legally impossible in this case, as no ordinary legislative instrument can properly convert refundable contributions into taxes.

Furthermore, a tax can't be imposed by ministerial order. Certainly, to use a hackneyed phrase, "no new taxes" can be imposed by ministerial order or by way of amendment to the NHTA, which is not of itself a money bill. Can you imagine what would happen if ministers could awake every morning and draft a ministerial order imposing a new tax?

Jah is my light and my salvation.

So, whom shall I fear?

He is my guide throughout this

Creation.

So, of whom shall I be afraid?

Jah is my Keeper.

Jah is my guide in my resting

and my rising.

So, whom shall I fear?

What makes this desperate, craven amendment 'act' of Parliament even more despicable is that it ignores so many tenets of proper legislating laid down for the protection of the public from rampant, out-of-control governments. For example, the NHTA has already been passed in order for contributions to be collected, invested, held in trust and spent on the improvement of Jamaica's housing stock. A statutory body was thereby created for the express purpose of Parliament delegating to that body the responsibility to carry out the sacred purposes of the Trust.

Those powers, functions and duties can't be abdicated or subdelegated to anybody else, least of all a Cabinet minister with political power closest to his heart. Only the NHT board members can decide what is to be done with Trust funds and only they will be ultimately liable to contributors for any breach of trust. No matter who demands that they hand over the trust funds for 'fiscal consolidation', they must stand their ground or resign.

Jah is my Keeper.

Jah is my guide when the

Philistines come down upon I.

So whom shall I fear?

He is my guide when my enemies

come to devour I

So whom shall I be afraid?

That which has been delegated cannot be subdelegated (Delegatus non potest delegare). The NHT board's duty can't be subdelegated by the NHT board and this fundamental rule of law can't be circumvented or subverted by Parliament itself attempting to make the subdelegation.

Significant contribution

In response to the serious concerns widely expressed regarding this callow attack on law and order, our prime minister had this to say in her Budget presentation:

"Mr Speaker, I could not complete my presentation on the NHT without commenting on the significant contribution that the NHT has been called on to make to the national economic programme over the next four years.

"There have been varying responses to the NHT's contribution. However, Mr Speaker, the Trust has recognised that it is contributing to the very survival of Jamaica in these difficult times.

"Without a stable Jamaica there will be no NHT, and without a Jamaica in which our contributors can repay their mortgages, there will be no viability for the NHT."

Really? Seriously? That's all you've got, PM? Apart from the sensational yet false spectre of Jamaica in the throes of death, are you really trying to tell me that if my commercial bank should recognise a fiscal threat to Jamaica's stability, you would then have the power to 'call on' it to hand over my life savings and those of my fellow depositors to Government for 'fiscal consolidation'?

Who decides the threat level? You? A finance minister? A Cabinet?

If a finance minister can decide what's to be done with citizens' savings, why do we need an NHT board or a board of directors of my commercial bank? Regular income for party hacks? Or do directors' fees come with obligation; duty; responsibility?

And, if yes, to whom? To the bank/company/statutory body? To minister? To party? To God? Or to country?

Jah is my keeper.

Jah is my guide from the

pestilence of darkness.

So whom shall I fear?

He is my guide from the

vampires of hell?

So whom shall I be afraid?

Jah is my keeper.

Jah is my health and

my strength.

So whom shall I fear?

He is a shield upon my right

and my left hand.

So whom shall I be afraid?

Peace and love.

Gordon Robinson is an attorney-at-law. Email feedback to columns@gleanerjm.com.