Jamaican gov’t to spend $8.9 billion on added salary payments this month

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Jamaican gov’t to spend $8.9 billion on added salary payments this month
State minister in the Ministry of Finance and the Public Service Rudyard Spencer delivers a statement to the House of Representatives on Wednesday. At left is state minister in the ministry, Fayval Williams. (Photo: JIS)
State minister in the Ministry of Finance and the Public Service Rudyard Spencer delivers a statement to the House of Representatives on Wednesday. At left is state minister in the ministry, Fayval Williams. (Photo: JIS)

(JAMAICA OBSERVER) – The House of Representatives on Wednesday approved $8.9 billion in additional salary requirements for government employees, the bulk of which will cover the first year of a new wage agreement which is still under discussion with some unions.

Minister of Finance and the Public Service Audley Shaw explained that the retroactive payments, which cover the first 12 months of the 48-month offer that is still being negotiated with public sector teachers, nurses and the police, made up most of the $9.7-billion net increase in the budget for fiscal year 2017/18 which ends on March 31.

Shaw and junior minister Rudyard Spencer came under fierce attack from Opposition Members of Parliament, as they explained the need to settle the public sector wage issue by the end of the fiscal year, on the basis that increases over four years, 2017-2021, which have already been accepted by the majority of public sector trade unions, was the best that the Government could do at this time.

This followed a report being tabled by the Public Administration and Appropriations Committee (PAAC) of the House of Representatives, which spent the morning reviewing the second supplementary estimates tabled by Shaw on Tuesday.

Chairman of the PAAC, Dr Wykeham McNeill, pointed out that the committee had taken note of the fact that the payment of the five per cent increase offered by the Government, and accepted by the major trade unions which are members of the 11-member Jamaica Confederation of Trade Unions (JCTU), was being done despite the failure of the teachers, nurses and police to sign the agreement.

However, he pointed out that the Ministry of Finance had explained to the committee that, despite the fact that the major trade unions only represented 49 per cent of public sector workers, some of the other unions had agreed to accept the payment while pursuing improvements in other areas of their claims.

The situation became inflamed, however, following a statement from Spencer, who noted that, in order to maintain the targeted wage-to-GDP ratio and remain fiscally responsible the Government could not accede to the requests from the teachers, nurses and police for an increase above what had been offered and accepted by the JCTU member unions.

“Our teachers have asked for an increase of $60,000 per annum in the book and software allowance. If this were to be granted, it would cost $1.7 billion,” Spencer informed the House.

“While we acknowledge the need for more resources for the teachers, there simply is no more room to absorb any further increase at this time, given the imperative to get to nine per cent of GDP (in the Government’s wage bill),” Spencer insisted.

He said that the Government was asking the teachers to exercise patience and tolerance of the Government’s current position, “as we work to build a stronger, more robust and resilient economy. This would allow us to provide more in the future”.

Shaw told the House that the $8.9 billion additional salary requirements were met as follows: $4.7 billion from the contingency provisions included in the budget from last April; $2.4 billion reallocation of funds which had been allocated to various ministries, departments and agencies of Government; and $1.8 billion from revenues.

He added that the supplementary estimates, in addition to meeting the five per cent increase for the first year of the proposed four-year agreement, also included $2 billion in outstanding payments owed to medical doctors and consultants by the Ministry of Health; $215 million owed to medical technologists at the National Blood Bank; $1.5 billion to the local authorities to address the $8 billion owed to the Jamaica Public Service Company Limited for streetlights; $1 billion for islandwide road patching; $1.7 billion to clear electricity arrears owed by the Ministry of Education, Youth and Information; $500 million to the Jamaica Urban Transit Company for operations; and $484 million to pay for debt arrears for judgements against the government.

The overall capital expenditure was increased by $1.4 billion to $50 billion, including $2.8 billion to the Ministry of Economic Growth and Job Creation related to the completion of the new head office of the Ministry of Foreign Affairs and Foreign Trade in downtown Kingston.

Shaw said that the increases in the supplementary estimates would be met from higher than projected revenue inflows.

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