FinMin says public-sector pay reset coming
Finance Minister Nigel Clarke is signalling that a major reset of public sector compensation will be reflected in the next budget, which is due in a few months. With the government keeping a keen eye on productivity in the sector, Clarke says the coming budget will give “disproportionate focus to the implementation of a restructuring of public sector compensation”.
The necessary reform will have to be accompanied by technological improvements, he is insisting.
“The structure of public sector compensation today is chronically unsustainable. We are unable to attract and retain the professionals we need to run our bureaucracy,” the finance minister said as he addressed Wednesday’s session of the Jamaica Stock Exchange, JSE, capital markets conference.
Warning that if the compensation reform is not accompanied by procedural and technological improvements, he said the country risked continuing to have a public sector wage to gross domestic product, GDP, ratio that is unsustainable. He said that addressing these and other related factors would lead to a rise in public sector compensation as a proportion of GDP.
The public sector wages review is slated to commence on April 1, accompanied by the continued privatisation of more government enterprises.
He welcomed the cross listing of Massy Holdings shares on the JSE, pointing out that Jamaica was not only a place to raise capital, but it is also a place to invest.
Calling for a balance between companies’ investments and their charges to their customers, Clarke labelled commercial banks which have hiked their fees to clients as “tone-deaf” and “callous”.
But the parliamentarian who has been leading an offensive to curb bank fees, Fitz Jackson, is not buying the minister’s new-found indignation.
Clarke said on Wednesday that he had already summoned bank heads and made his position known. He expects them to be responsible about the matter, he said, noting that while banks need to recoup their investment in technology, they must be sensitive to their customers.
Clarke is of the view that the increased fees will have the effect of excluding some persons, even as the banking system strives for a greater level of inclusion among the Jamaican populace. The biggest two banks, National Commercial Bank and Bank of Nova Scotia, have announced increased fees.
But Jackson, an opposition member of parliament who sponsored a private member’s bill on banking fees in 2018, which failed after not getting the support of the government side of the House of Representatives, is dismissive of Clarke’s strong talk. For Jackson, the responses from Clarke and, before him Prime Minister Andrew Holness, are disappointing but not surprising as, according to him, no specific remedy has been advanced by either high-ranking government member.
“We all know what needs to be done for the banks not to be charging customers for making transactions against their own monies that are in the banks for safekeeping and use at their convenience,” Jackson told the Financial Gleaner.
He said he would not be surprised to see a temporary suspension of the new fees, aimed at cooling tempers while the real status quo remained in place.
Meanwhile. Clarke is talking up the resilience of the Jamaican economy and, in particular, the construction sector, noting that it helped to temper the effects of the 10 per cent decline in GDP for 2020. He said if the trajectory of recovery continues, Jamaica should soon return to pre-COVID levels.
Clarke also drew attention to continued improvements in the labour market, noting that the unemployment rate is at a historic low. According to the finance minister, with restored economic stability, the country will be in a better position to make the necessary changes that will enhance development and productivity, and drive down costs.