Government stands ready to make good on its four per cent offer concerning public sector negotiations as soon as it is accepted - but if trade unions choose to send these negotiations to the Industrial Court, Government will ask that these matters be expedited.
"... So that we can act swiftly in accordance with the Court’s decision," Finance Minister Colm Imbert said during yesterday's 2023 Budget address.
Imbert had said Government was prepared to raise the required funding for backpay for its current offer quickly "and to make these payments promptly, as well as appropriate adjustments to the budgetary appropriation to cater for the recurrent increases in salaries and wages."
He'd said central to the efficient functioning of the public service is the establishment of a fair and equitable compensation system for public sector employees, "but the approach to achieving this objective must be careful and consistent with the known availability of resources."
"No responsible Government can contemplate bankrupting the entire country, simply to appease a portion of the labour force. We're firm in our view that our current offer of 4.0 per cent over the period 2014-2019 for the mainstream public service - although it will be a challenge to raise the required funds - is practical and equitable. One trade union has already accepted our offer. We hope others will soon follow suit."
Imbert stressed the additional annual recurrent cost of Government's offer is approximately $500 million, and if this is extended to the wider state sector, the additional cost will almost double to approximately $1 billion per year.
"The backpay that will accrue to June 2023 from our offer for just the mainstream public service is $2.4 billion. This will increase to $4.6 billion when the entire state sector is included. As difficult as these amounts will be to accommodate, we'll find the money and make the required payments promptly. But any more than this will wreck the economy, not only for the same public servants but for everyone else."
Imbert said the Public Services Association's (PSA) counteroffer of a 19 per cent increase in salaries for 2014/16 is unsustainable.
" If accepted, this would cost $15.8 billion in arrears up to June 2023. The additional annual recurrent cost would be $1.8 billion. If PSA's offer was extended to the wider state sector, $30.3 billion in backpay would be required up to June 2023. The additional annual recurrent cost could be $3.4 billion.
"And these calculations don't cater for a similar increase in the second three-year period 2017-2019, which if agreed to, could create a backpay requirement of $50 billion, equivalent to the total national expenditur in previous years."
"Clearly, these aren't serious counterproposals. They may sound good to encourage marches or threats, but I'm certain the leaders know the facts, the reality and what is doable. It should be obvious that demands of this nature cannot be met. Anyone who believes the country can afford this level of public expenditure ($50 billion) is simply not being realistic."
He added, "Our offer of a four per cent increase over 2014-2019 is the best we can do, and even at this level, we will have to dig deep to find the $4.6 billion in backpay that will flow from this."
