Vice President Bharrat Jagdeo yesterday strongly defended the government’s decision to give an across-the-board 6.5% increase to public sector workers – a hike which has seen some criticisms.
Jagdeo stressed that the government has a responsibility to improve the lives of all citizens of Guyana not just public sector workers.
Last week, Minister of Finance, Dr. Ashni Singh announced a 6.5% increase across-the-board for public sector workers along with a one-month, tax-free bonus for the Disciplined Services with civilian members of the GDF receiving the bonus for the first time.
The award was again made without any free collective bargaining with the public service unions, and the Opposition is not at all impressed with the announced pay increase for public servants pointing out that it is below the current inflation rate and as such cannot relieve the high cost of living.
A release from the Office of the Leader of the Opposition referred to the 6.5% increase in the 2023 pay for public servants as “ridiculous”, adding that it should shame any government with a “modicum of decency and sensibility.”
It said that the PPP/C seemed devoid of any such sentiment.
“But not the PPP/C. They see political gain and virtue in keeping workers and citizens poor and dependent.” The release also said that the “pitiful” 6.5% is so small, that it represents less than one percent of the government’s current budget of $782 billion.
However, Jagdeo yesterday at a press conference at PPP/C headquarters at Freedom House stated that there seems to be an “obsession” about percentages every year as it relates to the increase, adding that “any salary increase that is not grounded in an analysis of your economy, the state of your finances and doesn’t take account of the future revenue stream will be conjecture and will not be sustainable.”
With 54,000 public servants earning $87b, Jagdeo said, the government has an obligation to them as they are very important in managing a country, stressing that “we have ensured that working conditions have improved. We have ensured that salaries have increased for public servants.”
According to Jagdeo, some categories now at the lower level in the public service are attracting private sector workers who are leaving to come on board, “because we have a minimum wage now in the public service that is higher than in many private sector agencies…”
Further, he said that while the government has to take care of the public sector it also has a duty to “all the people of the country too who are not public servants, who work, who contribute to national wealth, who pay taxes, they also have to benefit from the treasury.”
Beneficial
In order for those citizens to benefit, Jagdeo said, measures have to be implemented to have them pay less taxes as that would be beneficial to them, pointing out that in the first budget after returning to government the PPP/C reduced taxes with the removal of VAT on a number of items.
“That was $40b immediately less than APNU were collecting in taxes but it was also a boost to production because we removed the VAT on machinery and equipment for every sector”, he argued.
He explained that with the implementation of VAT for machinery and equipment citizens were not investing under the previous government and this is why after the removal of the VAT there has now been a 9% growth in the non-oil sector which is needed to keep the economy diversified.
Furthermore, Jagdeo pointed out that while people are criticizing the 6.5% increase they are not realizing that students are getting $10.5b more and pensioners are now getting $14.5b more, “and the thing about it is its annualized.”
He also pointed out that part-time workers have been hired and there has been an over $100b investment in the housing sector to the benefit of all the citizens of Guyana including public servants.
“It’s not only wages and salary you can spend on, you have to spend on road, electricity. We’ve absorbed all of the costs because of higher oil prices and carry it on the treasury, we’ve restored the subsidy to the pensioner where do you think you fund this from? P0eople don’t look at all of those, they think 6.5% alone”, he argued.
