(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.
