Opposition groups AFC and APNU yesterday poured cold water on the government’s announced 8% pay-hike for public servants, calling it a PPP/C bribe for votes and a gimmick that will be eaten up by inflation and taxation.
At an Alliance For Change (AFC) press briefing, the party’s economic advisor Sasenarine Singh and its presidential candidate Khemraj Ramjattan both lambasted the increase, saying that it does not match the public servant benefits proposed in the party’s economic policies.
“Because of the fact that the PPP/C has been having such bad turnouts at their meetings, even in their strongholds, they have decided to chalk in an 8% increase… we see that as bribery,” said Ramjattan, while noting the approaching November 28 polls.
President Bharrat Jagdeo on Thursday granted approval for the across-the-board increase for government employees with effect from 1st January 2011. PPP/C elections campaign manager Robert Persaud, at a news conference, defended the increase yesterday, saying its critics expose
themselves as anti-worker and unsympathetic to public servants. He added that those who view the increase as electioneering do not have the interest of the common people at heart.
But Ramjattan stated that the AFC found it strange that monies were so readily available shortly after parliament was dissolved and there are no measures in place to scrutinise funds. “Where did it come from?” he asked. “It is rather strange [that] a president, during the dissolution of parliament three weeks before an elections, doing this. “ He said he hoped that persons are not beguiled and use facts and statistics when making a decision about who to vote for, since the increase was “built on subterfuge.”
“Under an Alliance For Change government, public servant workers will be given a 20% [increase]… and along with the increase every family will be given a $2,000 per month allowance for every child,” he added. The proposed allowance for dependent children, he noted, is the brainchild of the AFC’s Sheila Holder and Cathy Hughes, whom he said are passionate about women and children equality issues.
Using PowerPoint presentations to illustrate the differences in the two party’s wages, salaries and taxation proposals for the nation, Singh was critical of the minimum wage, the income tax threshold of $35,000, the Pay As You Earn 33.3 % tax, and the non-provision for monetary monthly benefits for children under the PPP/C’s plan.
Singh explained that with the AFC’s proposed 20% increase of public servant wages and salaries, an income tax threshold of $60,000 and a reduced Value Added Tax (VAT) at 12%, the nation will be better able to upward mobilise itself economically.
Asked by Stabroek News about the loss of revenue that would result from the lowering of the VAT, Singh explained that the party sees VAT as a taxation process that should be introduced gradually to cushion the pockets of the average public servant and not “oppress.” He added that to subsidise the loss, the AFC had already worked out a mathematical and accounting economic strategy that would have garnered $20B from static funds. The lost revenue from VAT, he explained, will be replaced from those monies as part of an AFC Guyana economic stimulus package.
Singh was confident that after 18 months in office, during which time he said there would thousands of jobs created, the VAT reduction would be proven to be sound.
Ramjattan echoed his economic advisor’s explanations, while adding that President Jagdeo who while once Minister of Finance argued adamantly that there was no way that anyone was entitled to large percent increases, since the state did not have the funds. Even at this year’s budget, Ramjattan said, government had stated that there was not any money available in state coffers which would allow for more than a five percent increase.
Meanwhile, opposition coalition A Partnership for National Unity (APNU), in a brief statement yesterday, also criticised the true benefit of the pay hike, while noting the effect of inflation.
“…a wage increase of 8% for 2011 means that more than half of that is already lost, at the projected rate of inflation of 4.4% given in the National Budget 2011,” it said, while arguing that of the remaining 3.6%, well over half, could be paid out in the 16% VAT, the 33.3 % income tax and the National Insurance Scheme (NIS) contributions.
“Therefore, depending on the earnings of the particular worker, the net increase is less than 2%,” APNU said.
The coalition also emphasised that based on its calculations, the value of the monthly pension payment and perks for the President will top G$3.8M, when the current estimate is computed with the tax-expenditure benefit value to the President of the tax-free status of his salary and perks.
