Mon | Jun 18, 2018

No massive job cuts - Phillips

Published:Sunday | December 13, 2015 | 12:00 AMMark Titus
Finance Minister Dr Peter Phillips (right) greets IMF representative Uma Ramakrishnan at the Fund's 8th review press briefing in May.


Finance and Planning Minister Dr Peter Phillips has rubbished claims that there will be massive job cuts as the Government introduces a public-sector reform exercise to reduce the wage bill as agreed with the International Monetary Fund (IMF).

He, however, admitted that some public-sector employees could lose their jobs as the administration moves to ensure wages are reduced to nine per cent of the gross domestic product (GDP).

"There are those who think that when we talk about public-sector reform that it is a code word for massive layoffs in the public sector," said Phillips, while speaking at a discussion on the economy in Montego Bay, St James, last Friday.

"Let me say here, say it definitively: we have no such plans for massive layoff or layoffs at all in the public sector.

"We will need to contain cost in the public sector. We will need to ensure that our wage-to-GDP ratio doesn't get out of line," added Phillips.

According to the finance minister, the Government will be on a path of pursuing greater efficiency.

"We will need to prevent excessive duplication of organisations. We will need to divest ourselves of many services presently being offered by the State that don't need to be offered by the State ... . We will need to outsource the delivery of many services."

In its latest country report on Jamaica, the IMF said the country would be limited to the undesirable policy options like tax increases and job cuts if it is to achieve the wage-to-GDP target.

The Fund noted that the Government has signed new wage agreements with some unions, with the wage bill for the 2015-2016 financial year projected at 10.1 per cent, exceeding the nine per cent target.




But Phillips argued that the Government is pushing for the use of the most modern information technology, which he said would make the State more efficient.

"If it takes 10 hours to process an application in Jamaica, which takes one hour in another jurisdiction, we are putting the person who is seeking that authority at a competitive disadvantage," said Phillips.

"And so we have to do all those things, but we need to do [them] in a systematic way and in ways that may result in reduced employment over time, but the fundamental purpose is not to remove people from employment, but to create a more efficient State."

Phillips argued that the performance of industries such as the tourism, BPO and renewable energy sectors are good indicators as to the confidence of investors. He said the problem with agriculture was that it was too archaic.

"The problem with agriculture is that our production systems have been archaic. Too many of our farmers have been operating on production systems which would be easily recognisable if you came from the 19th century. Take a look at us today - hoe and the machete as the major production instruments," said Phillips.

"You cannot produce efficiently in that way. So a challenge going forward is to address some of the fundamentals of a modern agricultural arrangement, not just for a couple of export crops, but the entire gamut of crops. We have managed some success over the past few years ... [as] we have managed to cut $5 billion off our food import bill," added Phillips.