No 30 per cent wage increase for public sector
It appears that public sector workers will not get anywhere close to the 30 per cent increase in wages, over two years, they have requested.
"In the context of low inflation, in the context of the payment of increments, we are certainly expecting that the view of what would constitute a reasonable settlement will have to undergo some adjustments as compared with previous years and periods in the history," Finance Minister Dr Peter Phillips said during yesterday's sitting of the Standing Finance Committee of Parliament.
Phillips said given the commitment to nine per cent of GDP by 2017, "there is obviously an objective limit on the amount that can be afforded by the Consolidated Fund".
"We need to bear in mind that we have an obligation under the law to nine per cent wage to GDP," he added.
Despite an allocation in the contingency section of the 2015/16 Budget for $11 billion in salary increases, Finance Minister Dr Peter Phillips has told a parliamentary committee that some $6 billion of that amount is for back pay and a final tranche of a one-off payment.
Phillips said the provision in the contingencies represents "our expectations of what will be due following the wage settlements".
"It is important to make the point: one, we are talking about an inflation outturn of approximately five per cent for the fiscal, and we expect inflation to be substantially lower even in the next fiscal," Phillips said.
He said with public sector workers due a 2.5 per cent increment, that will be "a significant increase in terms of the purchasing power".
"It is also the case that we are negotiating, and we are hoping to have a substantial portion of those negotiations, if not all, completed even before the start of the next fiscal year so that we can make good of those payments during the course of the year," he added.
Audley Shaw, the opposition spokesman on finance, said there is a need for better clarification with respect to wages and salaries for public sector workers.
He said the expectations of the public sector is that the agreement being negotiated now will result in increases given to public sector workers from the Budget.
"My broad issue is whether there is any real accommodation in the new road of negotiations with the public sector," Shaw said.