Wed | Aug 23, 2017

No need to cut public sector - O'Neil Grant

Published:Monday | January 4, 2016 | 1:00 AM

The International Monetary Fund (IMF) estimates that Jamaica's wage bill will reach 9.7 per cent of GDP in 2016-17, way beyond the 9.0 per cent of GDP that has been agreed with the Jamaican Government.

While stating that cutting the wage bill is a "challenging goal", the Government, in correspondence with the multilateral, says it is currently identifying measures to supplement those already embodied in the wage agreements that include attrition and voluntary separation.

For O'Neil Grant, president of the Jamaica Civil Service Association (JCSA), massive job cuts should not be the approach taken to lower the wage bill.

Grant asserts that the Jamaican public sector is less than 10 per cent of the labour force and that the average size of the public sector globally ranges between 13 and 15 per cent.

"If we were to cut the public sector by 15,000 jobs come April 1, what is going to happen? First and foremost, most of the persons that you are going to be removing are going to go on some sort of welfare, because you are now going to be increasing unemployment," he said.

In its latest country report on Jamaica published in December, the IMF said that without high-quality and durable measures to lower the wage bill, the authorities will either have to further squeeze non-wage current spending or underexecute their planned increase in capital spending.

"They agreed that, starting next fiscal year, there will be a systematic effort to modernise the public sector with an overall reduction in public-sector employment through: divestment of public enterprises and government units; enhancing efficiency through shared services; beginning to modernise select ministries," the IMF said.

 

SUSTAINED EFFORT

 

Jamaica, under its current programme with the IMF, has fiscal policies geared towards reducing public debt, meeting programme targets, and following the fiscal rule that has been adopted.

"Achieving these goals will require a sustained effort to modernise and streamline the public service so that it can more efficiently deliver services to the public. Our authorities remain committed to lowering the wage bill to nine per cent of GDP," the Jamaican Government said.

But Grant is not convinced that the IMF is calling for wholesale job cuts.

"I have read the IMF statement carefully several times and I have not seen where the IMF has suggested that we should cut the public sector. What the IMF is saying is that we should rationalise and transform the public sector to boost efficiency and effectiveness," he said.

As it relates to the high wage bill associated with the public sector, Grant posited that "it is a symptom of the problem of little or no economic growth".

The JCSA president indicated that 60 per cent of the public service is employed in the critical ministries of health, education and national security.

Grant reasoned that any cut to the public sector would have to focus on these ministries, a prospect which he said would not be sensible.

"So when I ask people to analyse what is it we are cutting when we say cut, where are we getting the numbers from, at what cost are we cutting, can we afford to cut the health sector in an unscientific way? And when you analyse it, I say to people that you can't," he added.

andre.poyser@gleanerjm.com