Minister Pierre. Photo credit: stluciaparliament.com.
Deputy Prime Minister Phillip J. Pierre has hinted that government plans to make another proposal to trade unions on Thursday, June 5 to look at cutting public servants salaries by three percent.
Pierre told the media recently that government looked at all avenues possible to reduce the $76 million deficit. However, the only feasible solution is to cut public servants salaries, instead of sending them home.
Pierre’s comments comes a few weeks after the government had initially suggested cuts of five, seven and 10 percent in public servant salaries.
Government statistics reflect that a 10 percent adjustment in public servants’ salaries will amount to savings of over $37 million a year, which is equivalent to retrenchment of 990 workers and a recurrent financing gap of some $39 million. With a seven percent cut, government could save $26 million annually and with a five percent cut they can afford to save $18.5 million, with a recurrent financing gap of $57.5 million.
These proposals, however, have been met with mixed reactions. Trade unions have requested that government look at other alternatives of reducing the deficit. But, government is adamant that a cut in public servants’ salaries is the only solution at this point.
Government is exploring measures to curb public debt since an increase by 1.5 percent over the past two years.
Meanwhile, Commerce Minister Emma Hippolyte, commenting on the same issue, told the media that job loss in any sector is a concern to any government.
“But we do not want to send people home, so we believe St Lucia must have a reduction that is why government has taken that position,” she said.
Hippolyte noted while this is not the only solution, it is the main solution to get the money the government looking at acquiring.
“There are other areas we can look at, to bring in a million here and there, but we need $76 million and we’ve been asking everybody…here are the figures and tell us where we are getting the savings of such significance,” he added.
The government said is aspiring to increase current revenue/Gross Domestic Product (GDP) to above 23 percent, and further plans to reduce the overall deficit to five percent by having lower capital expenditure.
Government also stressed that without a wage adjustment, capital is under risk of being eliminated, which is not feasible given the fact that remaining capital is at fixed cost.
A team of officials from the Economic Affairs Ministry and the Office of the Prime Minister are expected to meet with trade unions tomorrow, June 05 for further discussions on these proposals.
However, Prime Minister Dr. Kenny Anthony has made it clear that with or without consensus, government will take the necessary steps to ensure that the country’s financial standing is improved.