“The President’s pension and the Prime Minister’s pension shall be seven-eighths of the highest annual rate of salary paid to such persons at any time as President or Prime Minister as the case may be or two hundred and four thousand dollars per annum, whichever is the greater,” says the 1991 amendment to the Pensions (President, Parliamentary and Special Officials) Act Chapter 27:03, which now appears extremely dated.
I am not certain what Mr. Hoyte’s salary was when he left office but if this was the level of pension that was thought acceptable for the president at that time when the PPP/C came to government in 1992, the president’s pension would have been about 10 times the public service minimum wage of approximately $1,600 per month. However, by the time Mr. Jagdeo left office his pension was over $1,000,000 per month: more than 28 times the current minimum wage of about $36,000!
Other income relationships have also changed to the advantage of upper management but at nothing close to the above increases. For example, in 1991 the salary of a minister averaged about $18,000 per month, which was about 12 times the public service minimum wage of the day; today it is more like 15 times.
In the face of the above change, the automatic response is: scandalous, greed, etc! But while such a reaction is understandable, it does not go to the heart of the problem and this article is not motivated by a wish to see incomes decrease. Given the choice, I would prefer to see a relative increase in lower remunerations. However, it appears to me that the current debate about the pension and benefits of President Jagdeo presents an opportunity for parliamentary collaboration rather than the rancour it has excited.
While I understand the politics that now demand that the opposition make haste with some reform of Mr Jagdeo’s benefits, I believe that what is much more important and would be of lasting benefit is a root and branch approach, which firstly considers what constitutes fair emoluments in the entire public sector and establishes independent periodic salary reviews such as exist in other jurisdictions.
I have repeated ad nauseam in this column that we need to look at issues systemically and develop management arrangements with sufficient checks and balances to curtail the negative propensities of the most wayward. It is highly questionable for any government to be given carte blanche to set its own emoluments (the 1991 timing of the Pensions (President, Parliamentary and Special Officials) Act, mentioned above is quite suggestive) and this is even more unacceptable in a divided society where public servants can be seen as supporters to be rewarded or non-supporters to be penalised. Such permissiveness must be even more unacceptable in a context where collective bargaining, which can act as a break on self-interest by forcing open public discourse about relative incomes, is highly restricted.
All agree that an efficient public sector is a sine qua non for good governance and an effective private sector. Yet the reform process, which began in the early 1990s, is still to be completed and what we have at the moment is an annual quarrel about the place of contracted workers in the general scheme of things.
A proper look at fair remunerations in the public sector would best be rooted in a reformed service, but since that appears nowhere in sight, I suggest that we proceed bearing in mind the kind of observations contained in the 2011 Hutton Review, which was established to consider fair pay in the British public sector.
That commission argued that fair pay is essential for a high quality of performance and should be proportional to each individual’s contribution and set by a fair process. Fairness, it observed, is not simple equality, and while individuals should face the consequences of their choices, they should not be rewarded or punished for luck or circumstances beyond their control.
Furthermore, there must be a balance between creating attractive public service careers and ensuring that the taxpayers’ resources are wisely spent.
It noted: “But if asked to lead a review into fair pay, the author must have an idea of fairness that can consistently guide his or her thinking. The golden thread that runs through this review is the notion of fairness as due desert – workers at every level in any organisation should be rewarded in proportion to the real value of their contributions, but not rewarded either for good luck which they have done nothing to deserve, nor for free riding on the efforts of others. Their pay should be their due desert – no more and no less.”
The British have periodic independent public sector salaries reviews, but I believe that a more comprehensive model, such as the Salaries Review Commission of our neighbour, Trinidad and Tobago, is better suited to our size and condition. It considers remunerations for all public sector areas: the president, prime minister, judges, chief executives, etc. Its eightieth report tells us that it “reflected on the fundamental principles that guide similar review bodies in other jurisdictions such as Australia, Canada, United Kingdom, New Zealand, India, Jamaica and Barbados. Our conclusion is that the core of the precepts which we identified in previous Reports, continues to be valid. These are as follows:-
(i) establishing remuneration which bears fair comparison with current levels of remuneration paid within the private sector for broadly comparable jobs, taking into account differences in other conditions of employment;
(ii) providing appropriate levels of remuneration to attract, recruit and retain persons of suitable competence, experience, knowledge, skills and personal attributes to fill positions of very high responsibility and trust;
(iii) ensuring appropriate differentials in compensation which take into account significant differences in the levels of responsibility between one office and another;
(iv) providing the motivational and intrinsic value which compensation packages should carry generally; and
(v) providing compensation packages for top political and managerial offices to promote the efficient delivery of public policies and public management solutions.”
Important as it may be in the context of electoral promises, rather than simply focusing on presidential remuneration, we have an opportunity to begin a comprehensive look at the public sector as a whole to give us comfort that what is taking place there is in our best interest and to give public servants themselves the incentive to perform at their best.
