Billion-dollar funding cut for SLB

DESPITE AN increase in the education tax, primarily to finance the Students' Loan Bureau (SLB), funding to the State-lending institutions has been cut by $1 billion in the revised Estimates of Expenditure, which has been tabled in the House of Representatives.

The cut is a result of what the finance ministry describes as a reduction in the amount originally budgeted to be transferred to the SLB from the Consolidated Fund on account of additional education tax collections.

Parliament, last April, approved that the tax be increased by 0.5 per cent to 3.5 per cent for employers, 0.25 per cent for employees, and 2.25 per cent for self-employed persons.

The increase taxes was expected to yield $2.8 billion, which was to help address the financial shortfall at the bureau. The Government had allocated a grant of $2.915 billion for the SLB this fiscal year, of which $2.8 billion was to be provided by the education tax. However, only $1.8 billion has been realised.

"We did not shorten. Whatever we collected, we paid over," Devon Rowe, the financial secretary, told Parliament's Public Administration and Appropriations Committee as it reviewed the revised Estimates last week.

Committee member Audley Shaw questioned how the projections could be so far.

"PAYE has not been down that drastic. Why is education tax down that drastic? Is that a compliance issue?"

PAYE collection as December was $2.6 billion less than the $48.7 billion projected, while in the case of the education tax, $13 billion of the $14 billion projected for the April to December period was collected.

Rowe said the SLB's lending programme is being supported by funds from multilateral entities. He also said the bureau has intensified its debt-collecting programme with a view to getting delinquent debtors to repay their loans.

Monica Brown, executive director of the SLB, has said it would need $4.9 billion to be disbursed as tuition loans this school year.