The establishment of an Unemployment Fund has merit, but needs a larger support base and careful planning, said Minister of Information, Melford Nicholas, at a post Cabinet press briefing on Thursday.
These remarks by the Minister came over a week after the announcement of the three-month closure of the Sandals Grande Resort in Antigua which will result in more than 700 workers being temporarily sent home.
They also came after the Antigua and Barbuda Workers’ Union and the political leader of the opposition United Progressive Party(UPP), Harold Lovell called for the establishment of an unemployment fund to assist people who have lost their jobs for varying reasons.
“It is not at this stage that the government is saying no to those conversations, but it is not one that can be blindly imposed,” said Nicholas.
He added that wide consultation among “stakeholders” is needed in order to achieve a wholesome outcome.
“I don’t believe that 700 workers alone could support the fund,” said Nicholas, “Such types of funds would require a much bigger social pool.”
He said that in response to the workers of Sandals, the government has asked for a reduction in the period of closure and also whether or not the employees will be able to take vacation time already accrued.
He further stated that other modalities to ease the loss of revenue during the closure are best taken up with their respective unions and other entities involved.
Minister Nicholas also said that there is nothing inherently wrong in establishing an unemployment fund, but its cost may be an additional challenge to economic sustainability.
“Obviously, these types of programmes have a cost associated with it …it will be an increased cost for labour and could have the effect of making Antigua a little less competitive,” he cautioned.
He cited the recent example of a fund at the Social Security Scheme which had to seek the legislative help of the government due to the inability to meet pensioners’ requirements.
“If the Social Security Scheme at this stage has found itself in a crippling way after being in place for more than 40 years, then clearly the establishment of an unemployment fund has to be done with careful consideration,” he advised.
Hurst also offered remarks in response to the UPP’s call for an unemployment fund, stating that it was never implemented during that party’s 10-year tenure even though it was proposed in the party’s 2004 and 2009 manifestos.
(More in today’s Daily Observer)