(Trinidad Express) Unless it borrows vast sums of money, the Government will not be able to afford the salary increases being sought by the trade unions representing public servants.
So said Prime Minister Dr Keith Rowley. Speaking at a public meeting in Arima on Tuesday night, the Prime Minister said an increase of 4 percent- 2 per cent for each of the two collective bargaining periods- would cost $1.45 billion in back pay and an additional cost of $730 million more for public servants salaries for each succeeding year in perpetuity.
“The question is: Is that sustainable?”, he asked.
“Let’s get generous and let’s say we give 8 per cent- 4 percent plus 4 percent. That would cost a back pay of $3.6 billion and an additional annual cost of $1.4 billion. Do you see that money in the Treasury in Trinidad and Tobago at this time? Do you see the Minister of Finance in Trinidad and Tobago being able to find that money on a monthly basis to make sure that you (public servants) with jobs get paid at the end of the month? ” the Prime Minister said.
“We will have to borrow the money and if we do that on this scale, in this way, and the oil price and gas price change, we are leaping in the dark,” he said.
The Prime Minister said circumstances beyond this country’s control- (ie the war in Ukraine)- brought unusually high oil prices and some improvement in the gas price, resulting in the Government receiving a little more money than it budgeted for… It might be approximately $4 billion, which is the increase outside of what we budgeted for. But you would have seen that we went to Parliament last week and added to the 2022 budget, $3.1 billion (in additional expenditure) to be paid for out of that $4 billion (in additional revenue),” he said.
Having spent $3 billion of the $4 billion already. The war (in Ukraine) is grinding to a halt. It might drag on for a little while longer, we don’t know. Of the $4.2 billion, we spend $3.1 already. Let’s say we have $1 billion left, the backpay at 4 percent would be $1.45 billion. You know what that means? We have to go and borrow $450 million to pay for that back pay.” He said the Government may or may not do that, but “let it work itself out”.
PM: We know people under pressure
He said while the Government had indicated that some of the windfall would go to public servants, it had to determine what was affordable.
“We have to give the public servants a reasonable offer because we don’t need anybody to tell us the pressure that the people of this country, like the public servants, have been under. It is we who said that we will not go to the IMF, we will prescribe our own medicine giving us the opportunity to do what no IMF programme will allow us to do. We have not laid off a single public servant…because we have said the first objective is to have people keep their jobs. Secondly, the objective is that at the end of the month, we have the money to pay you. And third objective, as soon as we are able to, we will improve your earning capacity. That is the order in which the Government has operated. And if we find ourselves in a situation where we put (objective) number three in front of number one, then you know what happens there,” he said. The most important thing is to keep all the jobs in place, the Prime Minister said. “We have a little breathing space now. I said let us not over-react, let us not get carried away,” he said.
“Because we all know that what is happening in Ukraine could be temporary. More than likely it is going to be temporary. Because the war in Ukraine has pushed out of the market the largest exporter of oil and one of the largest exporters of gas- Russia. If anything happens that causes that situation to change then that pressure for the high price is gone and the oil price will fall,” he said. “If tomorrow the Russians try to stop the war, that pressure on the oil price would be relieved; If tomorrow the Saudis decide we have made enough money out of this special arrangement and they going to pump more oil; or if tomorrow the Venezuelans come back into the market, that (high price) is gone. So we are in a temporary situation driven solely because the Russian supply has been pushed out of the market as a penalty for the Russian behaviour in Ukraine. So if we go and cut our cloth to suit these prices that exist today, when the turnaround comes, we may have ourselves with parts of our bodies exposed because the cloth was not properly cut,” he said.
PM: No increases for Ministers, MPs .
The Prime Minister dismissed claims that the political directorate and the Parliament looked after themselves and got a pay increase and said there was no proposal before Parliament for any increases for Ministers and MPs.
“For the benefit of the media who speak to the public, let me tell you what the facts are. The last time MPs and Ministers got a pay increase was March 2014 from the November 2013 recommendations of the 98th Report of the Salaries Review Commission,” he said “And I can tell you that there is no report before the Parliament being considered for any increase for Members of Parliament. And I must also remind you that when I became Prime Minister of this country, and dealing with the economic calamity and the revenue losses that we faced, I made a public commitment to the country that there would be no pay increase for Members of Parliament until the economy has been turned around,” he said.
The Prime Minister said just when the Government was coming within sight of balancing the budget, in came Covid. “There will be no pay increase for Members of the Executive or the Cabinet or Members of the Parliament until the economy can deal with it… So anybody to see talking about who got pay increase, that is just foolishness and nonsense and the very same thing that I am saying to the unions, I said upfront to my colleagues upfront in the Cabinet and to my colleagues in the Parliament” he said, adding that he was consistent on this matter.
Noting that someone claimed that he was afraid of a march by the unions, the Prime Minister said he had no such fear. “What I have is confidence in the good sense of the good people of Trinidad and Tobago,” he said. The Prime Minister said one thing he could give an assurance about is that the country has a government in office which is cognisant of the circumstances of the people and was responsible and would provide the best relief that the country could afford.
The Prime Minister said when his Government came into office it had to borrow money to pay for the salary increases, which included $6 billion in back pay, which had been agreed to by the outgoing UNC administration. I want to ask a question: Are you the people of Trinidad and Tobago telling the Government to do the same thing again?” Tell me! I am listening!” he asked, to which the crowd shouted “No”.
The Prime Minister said after “giving away $852 million” (to OAS by changing a clause in the contract for the Point Fortin Highway), the UNC now wanted to lead public servants to a place of milk and honey and was calling on unions to mobilise their membership to march. “As if that somehow would give the Minister of Finance more resources. The Prime Minister said in negotiations there is a high position and a low one and the purpose of the negotiation is to come to somewhere in between where both sides could agree or where the negotiations can go no further.
