PM urges public servants to be reasonable in demands

Prime Minister and Minister of Finance Dr Ralph Gonsalves is hopeful that teachers and other public servants will see the difficulty that their demand for one month’s tax free salary will pose for the Government.{{more}}

Gonsalves, who was addressing a town hall meeting in New York on Saturday, said the difficulty revolves around the capacity of the Government to meet the request of the public servants.

The Finance Minister said in percentage terms, the one-off payment works out to a wage increase of eight and a half per cent.

“Admittedly, it’s a wage increase which is one-off and which is not cumulative. In other words, if there is an increase next year, that eight and a half per cent would not be added to the base upon whatever increase comes next year,” Gonsalves told the audience, adding that the eight and a half [per cent] will not be part of any pension arrangements.

Gonsalves said both sides would, however, admit that between 2001 and now, the salary increases they have received, plus the reclassification, would have given them in real terms, an increase of the order of 40 per cent over 2001.

“The nominal increase would be higher, but we take account for inflation, which would be about 30 per cent, 33 per cent. So the teachers and public servants, in relation to actual salaries since 2001, have done fairly well, because you have to factor in the reclassification,” he said.

Gonsalves said it will not be true to say that there has been no increase over the last four years, as teachers have said, noting that there was an increase up to 2011.

He said 60 per cent of public servants receive an annual increment between two and two and a half percent and that SVG, along with St Kitts and Nevis, are the only two countries in the Organization of Eastern Caribbean States (OECS) that give annual increments.

“Grenada has suspended theirs. Antigua done away with theirs long time, St Lucia and Dominica,” he said.

Gonsalves also spoke about other benefits which public servants receive, including the 100 per cent mortgages first instituted by the Government through the National Commercial Bank.

He also noted that teachers and public servants receive two pensions, including a State pension which is a non-contributory pension and the contributory pension through the National Insurance Services (NIS).

He said there are several countries in the region where teachers and public servants do not receive a state pension and only receive a pension through the NIS.

“Now, I say all of this not to say that the teachers do not deserve an increase. I am not saying that. I’m just saying that there’s not a capacity of the Government to pay it. The Government has come through a real difficult period as a result of the global meltdown of 2008 and continuing.

“And we have suffered between 2010 and now from five natural disasters, three of them quite big, amounting in the aggregate to over $600 million in loss and damage. The last one in 2013, $330 million, amounting to 17 per cent of GDP.

“As always, I will try to do my best with teachers, but I simply cannot as Minister of Finance be responsible, if I were to take $25 million for a one-off payment…

“So, in a particular month, I have to find another $25 million. And then, I will have debt service, paying between $12 and $15 million. So, you can see the difficulty in a situation where you are struggling not to run a deficit on your current account.

“I hear some teachers say, well ‘yo borrowing money for the airport, why he can’t borrow money to pay us’. Of course, borrowing for a capital project with a long period of amortization and if it is for a capital project to create wealth, it’s an entirely different situation than borrowing money for recurrent purposes. I mean, I think most people will accept that,” Gonsalves said.

The Prime MInister said when teachers come to him, he has explained why he cannot grant their request. He said were he to provide the $25 million, he would have to not just trim certain programmes, but cut them all together.

“And I listed the programmes which I will have to cut, including: the home help for elderly programme, which is about $1 million. I’ll have to cut public assistance, which is about $18 million, by at least half to make any impact. I’ll have to cut the Youth Empowerment Service (YES) which is $3 million and employs 500 young persons. I’ll have to cut the SET programme, college graduates and university graduates who are not yet employed, costing a $1 million and a half.

He also mentioned the housing programme and the amounts budgeted for post-secondary training at the community college and the University of the West Indies.

On top of those costs incurred, Gonsalves said every year he spends $6 million in the economically disadvantaged loan programme and that there are teachers, public servants and their children who have benefited from such programmes.

He said he hopes that teachers and public servants will see the extent of the difficulty that their proposal will pose for the Government.

“The Government cannot afford 25 million. You may not accept the explanation, but if you do not accept the explanation, you bring for me another body of facts to refute what I am saying… I believe that most of the teachers and public servants do not think it is reasonable to ask for $25 million…,” he stated. (KW)