Dionne Rose, Business Reporter

Minister of Finance and Public Service, Audley Shaw. - File

AUDLEY SHAW, finance and public service minister, committed the Golding administration to an overhaul of the public sector during the next fiscal year, but stopped short of saying whether this require the slashing of thousands of government jobs, which some experts say is important for long-term fiscal stability.

"I want to put you on notice in terms of the departments within my purview in terms of my ministry, we are not going to be left out of it," Shaw told new members of public sector boards at a workshop at his ministry last week. "We are going to take a forensic look at the entire enterprise of the public sector in Jamaica."

Justified job losses

Wayne Jones, the president of the Jamaica Civil Service Association (JCSA), said he would support a rationalisation project if it was to enhance efficiency, but warned that job losses would have to be justifiable and proved.

"It cannot be the first activity," Jones told Wednesday Business. "It has to be the end result."

Early in the decade, with Jamaica running a fiscal deficit of over seven per cent of gross domestic product (GDP) and with the government wage bill - the second largest budget item after debt-servicing - galloping analysts argued for the need to chop at least 20,000 public sector jobs.

Instead, the then People's National Party (PNP) administration and public sector unions arrived at a compromise. In exchange for maintaining jobs, unions agreed to a freeze on wages for three years. The agreement was renewed, but instead of maintaining the freeze of the past salary demands were moderated.

Core issues not addressed

While this had slowed down wages and salaries as a proportion of the budget, many experts still insist that that has not addressed the fundamental issues of a bloated and inefficient public sector, which was among the issues that the year-old Jamaica Labour Party administration promised to address.

But like the previous government, Shaw - who has to manage a deficit of over four per cent of GDP and a difficult global market for credit - insisted that reform was not only about cutting jobs.

"To be more efficient, we have to look at where we can merge entities, where work is being duplicated now, how can we cut the duplication," he told the seminar at his Heroes Circle offices a week ago.

Back to central gov't

The minister said the process would also see some of these entities returned to central government.

"That is a work that is going to be done very very aggressively, rolling out into the new fiscal year next year," he said.

The JCSA's Jones said that such a proposal was not entirely new.

"The previous PNP administration commissioned some study, which showed that we had well in excess of 200, probably closer to 250 or so, entities that were not necessary," Jones told Wednesday Business. "Many of them are paper companies, they are just there on the books."

Jones also argued that public sector inefficiency was not merely the fault of workers and that the response to the problem, which he claimed was too often the case, was not the creation of new entities that starved existing ones of resources.

"It is not that the people don't want to do better, but their hands are tied - in fact, they are tied behind them," said the boss of the civil servants' union.

"They don't get money, they have to wait on a warrant from the Ministry of Finance, which very often does not come and even when the warrant comes ... the money is not there yet," said Jones.

dionne.rose@gleanerjm.com