Public-sector job cuts stay off the table
Dr Peter Phillips, the finance and planning minister, has dismissed suggestions revolving in the public domain that Government is currently considering plans to wield its axe on the public sector.
Emerging last week from an unusually early two-day Cabinet retreat, where public sector transformation was a key item on the agenda, Phillips stressed that no chopping block has been set up to slash the public sector.
Responding to Gleaner queries during a post-Budget press briefing on Wednesday, Phillips stressed that an adroit strategy has been set in motion to keep public sector wages at the anticipated nine per cent of gross domestic product (GDP), which is a condition of the arrangements with the International Monetary Fund (IMF).
"We don't have any cuts on our agenda," said Phillips.
"What we have is, first of all, to maintain the public sector wages not exceeding nine per cent wages to GDP," he added.
At the same time, Phillips said his ministry was utilising strategies to carve a sector, hit hard by several wage freezes in recent years, without throwing members under the redundancy blade.
"We are also taking account of the fact that we will need to begin wage negotiations with the public sector workers through their representatives in the course of this fiscal year," said Phillips.
He added: "We all know that it would be unreasonable to expect them to maintain the same levels of wage restraint, given the commitment that they have made over time."
But Phillips was obviously cautious on the way forward and urged public sector workers to exercise restraint.
"We also know that they have an interest as does the rest of the country in ensuring that, as we go forward, such claims for wage improvements do not destroy the foundations of the economic programme," he said.
Asked how he planned to maintain existing public sector numbers and the nine per cent-of GDP ratio, Phillips said he was pushing for growth.
"The more the economy grows, more resources are available to secure the nine per cent and allow for improvements in wages."
Phillips said changes occurring in the public sector through retirement, resignations and improvement in efficiency, have also assisted in maintaining the wage-to-GDP ratio.
"There are lots of opportunities to ensure that we maintain this," said Phillips. "We have, without layoffs, managed to have a steady downward trajectory of the wages-to-GDP ratio over the last two years," he added.
Phillips divulged that the Cabinet retreat was precipitated by several factors. He said provisions of the new fiscal rules, incorporated in amendments to the Financial Administration and Audit Act, require the implementation of a new budget calendar.
"It requires, first of all, the Government to pass a Budget before the start of the next fiscal year which begins on April 1, 2015," said Phillips. "That is to say it must be passed before March 31, 2015."
The finance minister said there was also the need for a new fiscal policy paper to be presented to Parliament that outlines first-quarter performance.
He disclosed that the new arrangements also call for the provision of projects of the fiscal performance of the Government for the remainder of the current and succeeding financial years as well as the midterm.
"As a consequence of all this, including the fact that we will have to pass the supplementary budget before the end of this current calendar year, the Cabinet went into retreat over the past two days (Monday and Tuesday)," said Phillips.
This, he said, was intended to take stock of recent developments and to chart the course for the remainder of the financial year as well as to determine the basic parameters for the next fiscal year.