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Finance Ministry to sort out non-payment of deductions

Published:Wednesday | October 29, 2014 | 12:00 AMMcPherse Thompson
Finance and Planning Minister, Dr. Peter Phillips

The government will be moving to address the vexed issue of non-payment of salary deductions to various institutions, within the next six months, as part of the measures critical to meeting targets under the International Monetary Fund (IMF) extended fund facility.

The measures also involve addressing what the Government said were longstanding human resource issues of the health sector, including rationalising the practice regarding employment and deployment of doctors to reduce the huge overtime bill associated with the current process.

According to the fiscal-policy paper for 2014/15, tabled by Finance and Planning Minister Dr Peter Phillips in Parliament recently, those actions were being pursued within the context of the Government's cognizance of the risk posed to the IMF's economic-support programme by the challenging wage situation and inefficiencies in the public sector.

The largest chunk of the Government's non-debt expenditure of $306.61 billion, for fiscal year 2014/15, is $161.7 billion allocated for wages and salaries.

BAD DEBTORS

The fiscal-policy paper did not elaborate on the manner in which the Government will address the non-payment of deductions, and the Finance and Planning Ministry officials were not reached for comment.

The Union of Technical, Administrative and Supervisory Personnel said, in September, that the non-payment of deductions has resulted in many public-sector workers being subjected to higher repayment interest rates on loans from financial institutions.

The union said it has caused many civil servants to become bad debtors and that creditors have taken some to court over the debts.

Among those affected are workers

at the South East Regional Health Authority (SEHRA). In August, SEHRA's acting chairman, Dr Andrei Cooke, was reported as saying the payments are being made, but the organisation was having problems paying over deductions to various financial institutions on time.

Cooke said then that they would be working with the health and finance ministries to address the longstanding issue.

In addition to addressing the expenditure issues, among other things the Ministry said would be undertaken to ensure the economic programme stays on track, is a review of the Government's divestment strategy "with the intent of identifying and putting more public bodies on the divestment block," the policy paper said.

LARGE DEFICIT

According to the fiscal responsibility statement, over the signature of Dr Phillips, the performance of public

bodies, for the first quarter of the current fiscal year, fell below the budget level.

The overall balance for the group was a deficit of $4.6 billion compared with a targeted deficit of $2.3 billion.

For the review period, selected public bodies recorded a deficit of $11.2 billion with Petrojam, the state-owned oil refinery, identified as the main contributor to the shortfall, reporting a negative variance of $9.65 billion.

However, the policy paper notes that large positive variances by National Housing Trust and Clarendon Alumina Production served to reduce the negative effect of Petrojam's outturn.

The policy paper said despite challenges being experienced by some public bodies, expectations are that the surplus overall balance target of $297 million, for fiscal year 2014/15, will be met.

It added that some public bodies are expected to perform better than budget and, therefore, mitigate the negative impact of those facing challenges.

mcpherse.thompson@gleanerjm.com