St Lucia gov’t proposes 5% wage cut for public servants

-alternative would be retrenchment

St Lucian Prime Minister Dr Kenny Anthony has told public sector unions that their members should take a 5% wage cut and agree to a series of other measures to aid the debt-wracked economy otherwise retrenchment would follow.

Dr Kenny Anthony
Dr Kenny Anthony

Anthony made the announcement in an address to the nation on Tuesday evening, according to a press release yesterday from his office.

The thirty-two minute address titled “Facing the Options”, emphasised that the “unsustainable cost of operations”, due to a high fiscal deficit and high debt, must be tackled to avoid any further deterioration of economy.

He told St Lucians that despite the significant cuts proposed in this year’s budget, Government faced a financing gap of EC$205 million. Anthony said his Ministry of Finance had supplied three options to close this gap combining cuts in wages and retrenchment of between 495 and 990 public servants. He said his government was against retrenchment and therefore made the following proposal to public sector unions on June 6, 2014.

“1. A reduction of 5% in the wages of Public Officers and all other employees of the Crown, from Grades 4 to 21. This reduction will be levied on gross salaries that is, basic salary plus allowances. The reduction will not apply to the judiciary or the Governor General.

2. The introduction of a wage freeze to cover the current triennium of wage negotiations.

3. The introduction of agreed benchmarks to govern further wage increases. To ensure and maintain sustainability, it is proposed that wage adjustments beyond the current triennium should be related to broad macro-economic and fiscal indicators. These should include:

(a) GDP Growth Rate of 2.5%;

(b) Achievement of a Current Account Surplus   of 3% of GDP;

(c) An agreed level of inflation;

(d)The unemployment rate;

(e) The level of wages in the overall economy as measured by the wage index;       and

(f) Agreed productivity gains.

4. A Memorandum of Understanding to be signed by all parties to the Agreement to reflect the points of agreement.

5. The establishment of a Monitoring Committee, made up of representatives of the Government and all Public Sector Unions and Associations, to monitor the implementation of the Agreement between the parties.

6. The establishment of a Commission, to be known as a “Spending and Government Efficiency Commission”, to advise Government on the most efficient and cost-effective government organizational structure and governing processes.”

The release said that Anthony called on public officers and public sector unions to do what is in the best interest of the country.


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