Wednesday, 22 March 2023 10:55

Public Sector wage deal almost completed

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NINETY-FIVE per cent of public sector workers have now accepted Government's wage offer under its compensation restructuring programme, and will start receiving payments this month.

Finance Minister Dr Nigel Clarke announced the new development in the months-long tug of war between the Government and various public sector groups and their representatives in his closing 2023/24 budget presentation in Parliament Tuesday.

He advised the House of Representatives that the Government, having signed off with the United District Constables last Thursday afternoon and agreements reached with several bargaining groups and staff associations in recent weeks, all 105,000 public sector workers will be on board once the Jamaica Police Federation signs off. He said more than 86 per cent of rank-and-file members of the Jamaica Constabulary Force have voted in favour of the Government's offer.

"We expect that, certainly for the groups who have signed, the retroactive payments will be paid out this month. It may not come on the 25th, clearly because a lot of the agreements were just signed, but we will endeavour that the funds will leave the Consolidated Fund by the end of the month," he said.

Dr Clarke pointed out that the fiscal risk to which he had referred in relation to the need to wrap up agreements before the end of the current financial year would be averted if the outstanding agreements are made.

At the same time, he rebutted reports on statements which had been made in the House on February 14 as he tabled the 2023/24 trillion-dollar budget. At the time, Dr Clarke said, "It should be abundantly evident that there is no room in the upcoming fiscal year (2023-24) for salary payments related to 2022-23 to be made," as he outlined the levels of expenditure on wages and salaries, including provisions for the second year of implementation of the public sector compensation restructuring.

"Any of these amounts not paid this fiscal year will have to be paid over a number of years, beginning in the fiscal year that follows the upcoming one [2023/24]. Even if the first time is a no, we are not deterred; that doesn't mean we cannot get to a yes. There are only a few weeks left, we are available morning, noon and night, weekday and weekend; let's talk, let's get it done,' he said at the time.

However, on Tuesday he suggested that he was misunderstood. "What that simply represented is that funds that are not used in a particular fiscal year cannot be transferred and used in another fiscal year, especially when our fiscal rules at this time require a very modest, positive fiscal balance," he said.

Dr Clarke said that neither a supplementary budget nor securing the funds in escrow would have worked. He added that the significant expenditures passed in seven supplementary budgets over the past two years were supported by increasing revenues, consistent with the fiscal rules.

"Some say 'what about rearranging items of expenditure to fit it in', [but] the nature of our fiscal accounts is quite rigid. There is no way to forfeit a single expenditure of $30 billion into that structure without precipitating a crisis," he stated.

As for escrowing the amounts due, such as was done for Venezuela to hold the funds required to settle Jamaica's debt under the PetroCaribe Agreement with Venezuela in 2019 in the PDVSA situation, Dr Clarke said the Government can only execute warrants against expenditure approved by Parliament in the budgetary process.

"The expenditure line item for the $30 billion is compensation and, in the case of the Venezuela escrow, we were dealing with a single beneficiary. Here we would have 40,000 beneficiaries. And since the line item in the budget is compensation, the expenditure would have to meet the definition of compensation, so therefore it wouldn't be to a collective body. There was no way technically to have been able to get that done," he explained, adding that there are also other problems with an escrow arrangement.