Opinion: What does the Finance Minister want with his amendments to the VNPF Act?

There are many worrying elements in the amendments to the Vanuatu National Provident Fund Act currently before Parliament.

The Bill was drawn up before the glare of publicity surrounded Finance Minister Moana Carcasses Kalosil through the claims made by the now-defunct website Talemaot. These claims have daily been substantiated by admissions from the Minister or ministry.

It is, for example, quite clear now that a number of managers in the VNPF are receiving salaries of Vt 700,000 a month. It is also clear that the fund made a loss of Vt 152 million in 2011 in spite of the hiring of people of allegedly greater talent than ever before being offered these huge salaries. And it is also clear to everyone that had all funds been deposited with an ordinary savings bank, they would have earned more for members, rather than produced a loss.

Speculation on ‘cattle-under-coconuts’ plantations as subdivisions is the height of lunacy, as is now clear. Bouffa is being kept as a ‘cattle-under-coconuts’ plantation by the Provident Fund. So why was it bought in the first place? One cannot help but think of personal gain to an individual or individuals.

A hasty reading of the amendments to the VNPF Act  in the Bill presently before Parliament has the most appalling requirement that the Minister and Governor of the Reserve Bank of Vanuatu will determine the actual investments of the Fund.

Previously, Investment Policy Guidelines provided the only avenue for Ministerial advice regarding investments. With the amendment, however, the Minister and Reserve Bank representative will decide how the funds of the VNPF are to be invested in the future. And there is no elaboration as to who decides whether the guidelines are being followed. There is no provision for any consultative process, between the minister and board — let alone the Minister and members.

Having got rid of Section 16B of the VNPF Act in one amendment, we then go on to a new guideline (let’s call it that) which states: “Subject to the provisions of this Act, the monies belonging to the Fund that are not required immediately to be paid as benefits or expenses of the Fund are to be invested pursuant to section 16A with the approval of the Minister and the Governor of the Reserve Bank of Vanuatu.” There you have it. They will decide.

There are some small (?) worrying things in the amendment like “operational losses within the VNPF.” There should never be any in such an organisation as the VNPF. More importantly, they should certainly not be allowed to create a buffer against operational losses.

There are other bigger, worrying things, especially the many references to fund managers. Fund managers have brought down many investment corporations such as Trio Capital in Australia. Its infamous Canadian fund manager lost $180 million in just two projects whilst making A$1.3 million himself for his part in the theft. Have VNPF fund managers all received the Vt 700,000 salaries?

Wendy Himford was particularly clear on the role played by governmental greed in the Chiefs’ Nakamal public meeting to discuss the Provident Fund’s plight on Tuesday. She accused Ministers of using Chinese aid and the Provident Fund to accomplish their own greedy ends.

It was also quite clear from the Tuesday meeting that no Provident Fund member wants any Minister to have anything to do with their money — nor his expensive employees’ money, nor the Minister’s friends on the VNPF Board.

The Amendment Bill must be withdrawn before Parliament sits.

The alternative is likely the Fiji Momi Bay experience. The Fiji National Provident Fund was hoping to sell its Momi Bay resort for F$ 80 million but the highest bid was $41 million three years ago. The property was passed in at auction. F$106 million had been ploughed into the ‘investment’ before then.

In Fiji 10,836 pensioners are only getting between 11 and 25 percent of their entitlements annually on reaching the age of 55 and this was said to be going to drop to below 10% a year ago. Whether or not windows are smashed at VNPF, we must not have this kind of experience here. And we must not let ministers promote it.

Opinion by Bob Makin


2 Comments on “Opinion: What does the Finance Minister want with his amendments to the VNPF Act?”

  1. dmog says:

    I feel that your comments, Mr. Makin are totally unfair. You are trying to attack and involve Mr. Carcasses just because of the proximity of elections and the necessity of a campaign. However as a journalist you should stick to the facts and the facts only. Otherwise your papers are irresponsible pamphlets, that can lead to unrest.

    Would there be a need for Minister Carcasses to be criticised, it is not for his interference with the board but for his liberal approach of trusting, almost blindly in my view, public service and board to do their job. He simply wants the educated ni Vanuatu to take the lead and support them, without interference really.

    I never seen in your papers any attacks against the former Director of Finance for example. I have never seen any attack on these investors who sold assets to the VNPF nor their lawyer.

    This amendment ha been prepared, lobbied, brought by the Board and the Management. It has been approved by every senior public servant. The Minister of Finance is simply the spokesman for what they feel is needed, that is to be put to the decision of the people’s representatives.

    It is not a reform that is a vital one in the Green program. It is simply administration of the affairs when you are in charge of a ministry. Even I do not necessary feel it is a good one, and we all think today it should be withdrawn, it is not at all fair from your side to present things like this without even trying to search the true facts. This gives a discredit to your blog.

    You wouldn’t like to be treated like this. Don’t treat others this way.


    • Gilles,

      First off, you seem not to understand the difference between hard news reporting and opinion. The article you are responding to is clearly marked as an opinion piece.

      In response to your other points — has the Fund membership been officially advised by newsletter (or the new information service) that the Fund has gone right out of gilt-edged securities and into speculative ventures like cattle-under-coconuts (originally planned as housing for VNPF members with no study undertaken), and resorts? If so, I stand corrected. The Fund must trust its membership. Surely Ministers should maintain a watching brief for their voters to ensure this. They should at least advise them of policy U-turns when they occur. When did these happen? Facts please. And how was the Membership informed?

      We don’t really need ministerial blind trust. What we need in every minister is wisdom and honesty. We don’t get a lot of it. The Chiefs’ nakamal meeting didn’t feel there had been any of it on their behalf.

      I have never seen any publicly promotion of the investment policy ‘volte face’ from GMs and CEOs and DGs. The public does not think these people are given a free reign, whether they’ve worked for TVL or not. Mostly people see these senior civil servants’ work being interfered with by Ministers of whatever party.

      Are you on the board, Gilles? If so, as what? The VNPF website does not list the Board membership. And I repeat… Has the Board informed us members by newsletter of its policy decisions? Or did mine just get lost in the post?

      I’m putting my finger in the hole in the dyke on this matter. And I did predict the Amendment Bill would be withdrawn.