Public servants to be paid most of revenue gained from economic growth

Although it is estimated that this country will see additional revenue of some EC$17 million on the basis of economic growth in 2016, almost all of this money will go towards paying public servants’ salaries, wages, pensions and National Insurance Services (NIS) contributions.{{more}}

“The anticipated increase in revenues, almost all of it is taken up with the increases we are giving to the public servants and to pay for pensions and NIS. That’s why some people say the public servants, generally speaking, that they are the preferred group in the country”, said Prime Minister Dr Ralph Gonsalves, during his budget wrap-up last Wednesday, February 24.

Gonsalves said that last year on Independence Day, October 27, during his address at Victoria Park, he announced the increase in salaries for public servants at 2.5 per cent tax free, retroactive from January 2015, and another 1.5 per cent on January 1, 2016.

He said he made the point that Government was projecting growth of 3 per cent and public servants should get an increase out of this growth.

However, according to the Prime Minister, the anticipated 3 per cent growth, because of “more uncertainty in the last few months of the year in the global economy, caused [them] to revise downwards our projection from 3 per cent to 2.2 per cent.”

He said that now, the Government anticipates growth of 3.3 per cent nominal GDP, but inflation at 1.1 per cent.

“We are very conservative on that because last year, you had a fall in the inflation rate of 2.6 per cent. That being the case, you say the real growth will be 2.2 per cent and from our experience in our economy, we assess that we can raise an additional EC$17 million on the basis of the economic growth,” said Gonsalves in Parliament.

He added that the possibility of raising EC$20 million exists, but “we have the number at 17 (million EC dollars) from economic growth.

“I want the public servants to know this and I want the whole public to realize this; they are getting EC$17 million estimated from economic growth…the increase this year, over last year, for wages and salaries and pensions and NIS, will be EC$13.4 million that’s what we looking at.”

In 2015, the Government paid EC$26 million every month for salaries, wages, emoluments, allowances, pensions and NIS contributions. In 2016, according to Gonsalves, they will pay monthly, EC$28 million.

Gonsalves noted that it is a fact that the budget is filled with criticisms and self-criticism, but the fact remains that the revenue measures have been carefully calibrated.

He stressed that the opposition New Democratic Party (NDP) and other persons who are criticizing the Budget do not have to find the money to make these payments, while it is a fact that there are public servants in some Caribbean countries who, at times, do not get paid.(LC)