The government will on Friday meet with two public sector trade unions to discuss a proposal for a one-time payment of one month’s salary to teachers and public service workers in the absence of a salary increase for 2011 to 2014.
The Teachers’ Union and the Public Service Union wrote to the government on Jan. 28 proposing that teachers and public service workers be paid by the end of the first quarter one month’s payment tax-free
“Just so that the public will understand what is being asked, the cost of this proposal is 20.5 million dollars,” Prime Minister Ralph Gonsalves told a press conference on Wednesday.
Gonsalves, who is also Minister of Finance, said that under the proposal, salaries for one month would total ECS$18.3 million, while wages for one month is a further EC$1.6 million.
He said the government’s payout for National Insurance Services contributions will be EC$600,000.
“The cost will increase by an amount of 2.4 million dollars if pensioners are included. And the normal thing is when you give salary increases, the pensioners also get,” he said.
“So that would be 22.9 million dollars and they say it’s a one-off payment and they want tax-free. Well, the tax, which will be forgone, is 2.2 million dollars, so you have to add a further 2.2 million dollars. I am just costing the proposal for you, as I am obliged to do, because it is the taxpayers of this country…” Gonsalves said.
He used the opportunity to give an overview of the government’s fiscal position at the end of March.
At the end of the first quarter, revenues and grant totalled EC$122.25 million, “slightly above the comparable figure for last year,” Gonsalves said.
He said this is the case although the country has seen a 10.9 per cent increase in revenue from taxes, incomes and profits compared with the first three months of 2014.
Revenue from taxes on international trade have gone up by 7.2 per cent, while taxes on domestic transactions have yielded a 20.8 per cent increase in revenue, “indicating some increased level of economic activity,” Gonsalves said.
“Those are the mean items, but I say to you yet we see the number is marginal in terms of the increase over last year,” he said, adding that during the first quarter of last year, there were many one-off payments such as the E$10 million advance from Mustique Company in the aftermath of the December 2013 floods.
“So I look at the overall numbers and I look at underlying trends nevertheless,” Gonsalves said.
“So the revenue on the core items are doing moderately, there are moderate improvements there, but the recurrent expenditure, while we are holding it, it’s still above the comparable period last year by just under one per cent.”
He said personal emoluments have increased by 2.8 per cent even though there is no specific salary increase.
The reason for the increase is that some increments are given, Gonsalves said.
“There are persons who have been employed, but not in such large number and, surely, we don’t want to get into a situation to stop employing person to give a 20-odd million dollars one off payment.
“And I am sure that we will have a good and sensible discussion because the public servants and teachers have been understanding and they have done quite well over the past decade,” Gonsalves said.
He said the current balance on the current account at the end of March 2015 is a surplus of EC$3.2 million, compared to the EC$4.8 million at the end of the comparable period in 2014, and EC$9 million deficit in 2013.
“The levels of capital spending is about similar to last year. The overall deficit is almost 11 million overall — capital and current, as compared to about 14 million, approximately, last year, in the similar period.
“Still a challenging situation even though some progress is being made, and we can’t undermine the progress,” Gonsalves said.
“But we will have this discussion and I have all the information to share with them, and more than that, I will have the technical staff in the meeting, the public servants themselves to speak to the matter,” Gonsalves said.