Sanctions loom for contract job breaches
Minister of Finance and the Public Service Dr Nigel Clarke has signalled his intent to lobby for sanctions against the management of ministries, departments, and agencies (MDAs) who employ people on contract despite having no official position on the books.
Clarke declared his position on Tuesday while tabling the Third Supplementary Estimates in Parliament.
He said that the matter represents a “legacy problem” perpetuated by successive administrations over decades.
The Holness administration has proposed a $25.4-billion spend for the 2022-23 fiscal year, with $23.7 billion, or approximately 93 per cent, earmarked for payments under the compensation review structure.
The proposed budgetary increase pushes the overall Budget for the fiscal year to $998.2 billion.
Clarke argued that for decades, MDAs have engaged in “the very unworthy practice” of hiring persons without the requisite approval.
He told his parliamentary colleagues that the finance ministry is seeking to embark on a companion measure of terminating contracts in accordance with the binding terms. He said where gratuities are required, they will be paid, and persons will then be employed in a permanent post where applicable and advisable in the public service.
“Now we’re not going to make these changes only for it to happen again,” Clarke asserted.
“It has to be accompanied by an amendment in our regime that allows for sanctions to be levied against persons, within the public service, who commit taxpayer dollars without the requisite approvals and not in accordance with Jamaica’s laws and regulations,” he added.
Clarke said that thousands of contract workers are expected to be impacted, with a significant number, including doctors, coming from the Ministry of Health & Wellness.
Additionally, Clarke said that there is no room in the Budget to meet the demands of some public-sector groups, including the police, teachers, and doctors, which have yet to sign off on the proposed changes under the compensation review system.
“Where we are now, we have listened; we have changed; we have added and adjusted the levels of compensation. Where we are now is what the country can afford,” said Clarke.
He noted that with wages at 11.4 per cent of GDP, the Government runs the risk of “crowding out necessary investments” in human capital development and social and physical infrastructure.
Clarke said the proposed increase to the Budget was developed within the context of revised revenue projections indicating an expected improvement of $25.4 billion, primarily from tax revenue which is expected to rise by $28 billion. That arises from a higher growth estimate as well as taxes projected from the additional spend on wages.
The finance minister said grant inflows are also programmed to increase by $1.1 billion, while capital revenue, non-tax revenue, and bauxite levy are programmed to be below the prior estimates.
The additional expenditure, he said, is to facilitate payments under the compensation restructure.
He said expenditure on recurrent programmes is slated to increase by a net amount of $2.7 billion.
“Contributing to this net increase are allocations of $1.8 billion as a one-off payment to travelling officers in relation to financial year 2021-22, $1.6 billion in subvention to the University Hospital of the West Indies to assist with compensation payments, and $300 million to supplement the increase to existing government pensioners,” said Clarke.
“Some of the increase has been covered by reallocations. Interest payments are estimated to increase by $2.0 billion, comprised of $1.8 billion on the external side, and $0.2 billion on the domestic side,” he added.
Clarke said $1.1 billion has also been reallocated to the Southern Coastal Highway Improvement Project.