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$138 billion wage bill

Published:Wednesday | March 31, 2010 | 12:00 AM

Government's wage bill for the coming year will rise as high as $138.35 billion, more than one-third of which will be paid out to teachers and other groups under the education ministry's portfolio, a review of the National Budget shows.

Stripped of the more than $10 billion budgeted for travel and subsistence allowances and another $1.38 billion is for project-related pay across the public sector, compensation packets amount to $127.1 billion.

The wage bill is the second-largest item in the budget - debt servicing is paramount - at 27.7 per cent of the total Estimates of Expenditure for 2010/11, or 40 per cent of the operational or recurrent portion.

In other words, the Government pays itself 40 cents out of every dollar spent to deliver services to Jamaicans.

The majority of the wage bill, $91.8 billion, goes to educators and education technocrats, followed by the police, nurses and doctors and others in the health sector, but these groups are unlikely to face any serious cuts in the pending public sector retrenchment.

Instead, the cuts are likely to be strongest among the civil service grouping, which numbers approximately 38,000 in a public sector corps of about 117,000.

No real progress is expected on the plan before December, and it is now expected that the cuts won't begin until fiscal year 2011/12, an International Monetary Fund document suggests.

The objective of the cuts is to reduce the wage bill from its estimated 11.75 per cent of GDP to around 9.5 per cent over the medium term to FY 2013/14.

The Government up to February spent $104.4 billion on wages and salaries, which are expected to round off the current year, which closes today, at about $125 billion, based on the more than $10 billion average paid out monthly by the treasury in the current quarter.