Minister without Portfolio in the Ministry of Finance and the Public Service, Senator Dwight Nelson, says pay increases for public sector workers, under the proposed Memorandum of Understanding (MoU3), will be determined on the basis of "cost of living, comparability and ability to pay".

The projection for inflation out-turn for the 2007/2008 fiscal year is between 12-13 per cent.

Some unions have indicated their unwillingness to settle for single-digit increases under MoU3, based on the impact of the cost of living on wages.

Senator Nelson told The Gleaner, yesterday, that he had separate meetings with 33 bargaining units and 44 public sector groups since September 1 last year. The claims have been submitted to the Ministry of Finance and the Public Service for the new contract period, beginning in April 2008.

Senator Nelson said the Government would now examine the various claims and formulate responses.