The three main unions representing public sector workers in St. Vincent and the Grenadines have criticised the government for increasing several taxes at the same time as it announced changes to the National Insurance Services (NIS) pension system.
In his Budget Address on Jan. 8, Minister of Finance Camillo Gonsalves said that NIS contribution rate will increase from 10-15% in installments over the next two years, with the first adjustment taking effect in June.
He also announced increases in the taxes paid for their drivers and motor vehicle licenses and related services, the airport service charge and, among other things, the fees for the inspection of electrical wiring in domestic and commercial buildings.
In a joint statement on Tuesday, the St. Vincent and the Grenadines Teachers’ Union (SVGTU), the Public Service Union and the Police Welfare Association said they understand the need for parametric reform and welcome sound and appropriate measures to address the issue of NIS pension reform and the sustainability of the employees’ and employers’ NIS social security fund.
“However, we are extremely aggrieved and disappointed at some of the proposed parametric changes and the manner in which the Government of St. Vincent and the Grenadines went ahead and enacted burdensome changes to the NIS pension system coupled with multiple increases in taxes, all at the expense of workers and the general public,” the statement said.
The unions said that after Gonsalves extended an invitation last year to have a dialogue with all the major stakeholders, he failed to engage in social dialogue with them to discuss the parametric reform and condition of the NIS fund.
They said the move was “deliberate and quite telling.
“We are completely saddened by the Government’s disregard for the people-centred recommendations submitted by the SVGPWA, SVGPSU, and SVGTU. We are completely appalled at the disrespect that the association and unions received from a ‘labour government’ that failed to engage in social dialogue to discuss such an important and sensitive topic as parametric reform of the NIS fund.”
The unions said:
“There is a palpable failure of the Government to address the financial difficulties of existing pensioners regarding the challenges, despite pensioners who have to survive on a significantly inadequate pension with no increase for over ten years despite high inflation.”
They further said there is “a clear failure by the Government to address the issues of workers and a total disregard for how proposed changes will affect their quality of life,” adding that there was also “blatant disregard for the need to ensure tripartite representation on the NIS Board in an effort to ensure a strong governance system”.
The unions accused the government of a stubborn refusal to change the composition of the Investment Committee, despite a high-priority recommendation by the actuaries for better transparency and accountability.
“As the International Labour Organization (ILO) recommended, a tripartite relationship is critical to any reform; thus, as trade unions and representatives of a significant number of workers and members, we have a moral obligation to act in the best interest of our members, and by extension, the people of St. Vincent and the Grenadines, and we stand resolute in doing so!” the union said.
“We assure you (our members and the public) that we are very concerned about the impact of the cabinet-approved reforms and increase in taxes and how they will affect the quality of life of all contributors and pensioners. We remain committed to working on your behalf to ensure that the NIS pension fund is sustainable but not at a disproportionate or unfair advantage over our workers and citizens of this country.”