Sinckler’s say on job, salary and budget cuts
Some Government workers will be going into the New Year unsure of whether they’ll have a job in 2014, after Minister of Finance Chris Sinckler announced today that about 3,000 will go on the breadline – 2,000 by January 15, and the remainder by March 1. An additional 500 will go home by attrition.
He also said that he and other Cabinet ministers, MPs and other top-level civil servants will take a 10 per cent pay cut and overseas travel budgets have also been cut in half. The minister did not say, however, when those measures will take effect.
Explaining why Government is going this route, he said: “Over the period of the economic downturn, our efforts at fiscal consolidation have been heavily tilted towards cuts in outlays for goods and services and selected increases in taxation. Little headway has been made in cutting subsidies and transfers given the deep structural make up of these. Our first major effort at addressing either this or expenditures on wages and salaries is contained in the August measures.
“And since we are now of the opinion, based on the trend in the fiscal accounts over the first seven months of the financial year, that additional effort will be required to keep us on track with our end-of-adjustment-period targets, these are the areas in which I now propose complementary and additional measures.”
Here’s what Sinckler said in Parliament during his ministerial statement:
On job cuts:
Information supplied by the Ministry of the Civil Service indicates that there are 16 956 Public Sector posts in central government and another 9 000 spread across the various Statutory Corporations. In the general service 15 333 posts are established and 1 623 are temporary posts.
Further, there are 5 341 temporary employees in the public service composed of 1 082 in temporary posts and 4 177 in established posts. Some 70 public sector posts are filled with contract workers, another 72 listed as “Apprentice” and 80 persons working on a part-time basis.
In considering the adjustments which we are proposing to reduce government’s overall wages and salaries bill, we had to take a number of factors into consideration. These include but are not limited to:
The total savings we are trying to achieve over the adjustment period and even beyond.
The constraints of the law and the rights granted to all officers in the service including the provisions of the Employment Rights Act.
The limitations imposed by the Constitutional Amendment prohibiting the altering of the salaries and allowances of Public Officers to their disadvantage
The conventions and accepted practices governing separations between the employer and the employee in the Public Service
The costs associated with any proposed layoffs and how these will be handled
The timeframes which we have set ourselves to initiate and complete the process of separation, particularly as it relates to all of the above, including appropriate time for adequate consultations with the workers’ representatives in particular.
The necessary ring fencing of sensitive areas in the delivery of critical public services in health, education, national security and elderly care.
The overall functioning and stability of the public service as we go forward in implementing critical aspects of our economic growth and development agenda.
With these in mind and based on a proposed saving of approximately $143 million in a full financial year or roughly $35 million over the last quarter of the current financial year, we have estimated that it will affect 3 000 employees across the overall public service: central government and statutory entities.
We have agreed that, if possible, there should be an even split in the proposed retrenchments between central government and statutory entities but, if not possible, then a split of 2 000 from the general service and 1 000 from the statutory entities would be imposed.
We further propose that the process of retrenchment be spread over the period January to March 2014, and be front-loaded starting with the first 2 000 job cuts by January 15, 2014, followed by the second tranche no later than March 1, 2014.
Additionally, Cabinet has agreed to institute a strict programme of attrition across the central public service, filling posts only where it is absolutely unavoidable, over the next five years, ending 2018-2019.
This attrition is expected to reduce central government employment levels from approximately 16 970 to 14 612 jobs – a projected loss of 2 358 posts; and savings of $121 million. Over the current 19-month adjustment period public sector employment will be reduced by an additional 501 jobs with a projected savings of 26 million .
We have also agreed that effective January 1, 2014 there shall be enforced a freeze on the payment of increments for the next two years. Appropriate arrangements will be made for this loss of income to be properly factored into the computation of overall pension benefits.
As indicated above, both the Ministry of Finance and Economic Affairs and the Ministry of the Civil Service, including the Personnel Administration Division, have been mandated to continue consultations and negotiations with the workers’ representatives to ensure that all appropriate steps are taken to safeguard the rights of all workers affected by these measures and to craft interventions aimed at mitigating the dislocation which will undoubtedly be caused, including assisting those interested to enter into retraining and redeployment programmes in the private sector.
The Ministry of Finance has also been mandated to work with the Board and Management of the National Insurance Scheme to ensure appropriate provisions are made for timely and full payment of unemployment benefits to workers that are displaced.
On salary and travel budget cuts:
Cabinet has also agreed to support following additional measures:
A 10 per cent cut in the salaries of all Ministers, Government MPs, Parliamentary Secretaries, Personal Assistants, and other persons designated as “political appointees” in the employ of the government.
A 50 per cent cut in the external travel budgets of all ministries, and statutory boards.
A freeze on all non-statutory discretionary waivers unrelated to the earning and/or direct saving of foreign exchange for the next three years. It is projected that this measure could save the government at least $100 million over the period.