Home' Trinidad and Tobago Guardian : November 10th 2016 Contents NOVEMBER 10 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
Chief editor-business: ANTHONY WILSON
Editing and design: NATASHA SAIDWAN
4--10 Rodney Road,
PO Box 122.
Telephone: 225-4465, ext 2035, 2025
Fax: (868) 225-3147 (Editorial)
Fax: (868) 623-2050 (Advertising)
Last week Thursday, Prime Minister Keith Rowley
sought to clarify the Government s position with
regard to statements made by Finance Minister
Colm Imbert at the High Level Caribbean forum
of the International Monetary Fund held at the
Hyatt Regency hotel last week Wednesday.
The prime minister obviously thought that a clarification was
necessary because of the political heat he anticipated would have
resulted from Mr Imbert s comments, in which the minister said---
in the context of the need for wage restraint---that the Government
would offer public servants zero, zero and zero for the period
2017 to 2020.
His statement on this issue was interpreted by this writer to
mean a wage freeze---a point that Mr Imbert disputed and clarified
at a news conference on Wednesday afternoon in which he said
that zero, zero, zero was the beginning of the process of collective
bargaining and not the end.
Addressing the post-Cabinet news conference by himself, Dr
Rowley said the Government s major objective was to grow the
economy, "and it is economic growth that is going to give us the
opportunity to improve on our current circumstance and to go
beyond where we were when the recent downturn began.
"But before we get to growth we have to cross over those
hurdles of the significant loss of revenue and all that attends
The prime minister then repeated a statement that he made
previously: "There will be no improvement in the emoluments
of the members of the Cabinet until there is an increase in the
economic circumstance of the country."
So Dr Rowley stated plainly that Cabinet ministers will only
enjoy an increase in their compensation when the economy can
afford such an increase. In other words, the prime minister is
saying that the wages of his ministers, and himself, will be frozen
until the economy improves to the point of allowing an increase
In making such an argument, isn t Prime Minister Rowley sig-
nalling that his ministers, and himself, will "do more with less,"
by making do with a wage freeze?
If members of Cabinet (and Members of Parliament) are being
paid by taxpayers to undertake duties and responsibilities for,
and on behalf of, members of the public, then clearly ministers
and MPs must be viewed as public servants.
So, the question is this: if the wages of one group of public
servants (ministers of government) are frozen until the state of
the economy allows them to receive an increase in their emol-
uments, why should any other group of public servant be treated
If a wage freeze is appropriate for ministers, then surely
it is also appropriate for teachers, civil servants, police offi-
cers, fire and prisons officers, members of the judiciary as
well as employees of First Citizens and other state entities
at which the compensation levels are set by the chief per-
Just as it would be inappropriate for ministers and judges to
receive wage increases at this time, so it would not be appropriate
for other public servants to receive higher salaries now or until
the economy improves.
Surely, the prime minister could not be arguing that other public
servants should receive wage increases in the period 2017 to 2020---
which is how long the current downturn is expected to last---
while the public servants in his own Cabinet should receive none.
That would be an outrageous and discriminatory argument,
which we all know Dr Keith Rowley is simply incapable of mak-
ing.The corollary of the prime minister s crystal clear comments
is that the public servants who report directly to him (Cabinet
ministers) will receive higher emoluments at around the same
time as all other groups of public servants---when the economy
It puzzles me that the Minister of Finance would want to resile
from saying that the wages of public servants will be frozen
until the economy improves, which would be sound economics,
equitable policy and in keeping with Prime Minister Rowley s
admirable position that we all have to make do with less.
What Mr Imbert should have said at the Hyatt last week
Wednesday is that, based on his revenue projections for the 2017
to 2020 fiscal period, he does not think it would be possible for
the Government to afford to pay public servant higher
But, Mr Imbert should have added, "if the country s revenue
position improves between now and 2020, all public servants
will benefit...in equal measure."
Shared sacrifice, shared benefits is such a simple yet elegant
concept, one wonders why it has not occurred to our policy-
Why T&T can't afford
One of the major issues that the country faces in the remaining
four years of its mandate is whether the State should grant
higher wages and salaries in negotiations for new collective
agreements in the 2017 to 2020 period with trade unions that
represent public servants and employees of state-owned enter-
Data from the 2016 Review of the Economy and the 2017
Draft Estimates of Expenditure (encapsulated in the table)
indicates that the amount of money the Government has spent
and will spend on wages and salaries for the public service as
a percentage of the T&T government s total expenditure increased
by 43.6 per cent between the 2011 and 2017 fiscal years.
As the table shows, wages and salaries accounted for 14.4 per
cent of total expenditure in the 2011 fiscal year, but that jumps
to an estimate of 18.2 per cent in the current 2017 fiscal year.
And it is noteworthy that the wages and salaries numbers
for the 2016 and 2017 fiscal years do not include the arrears
(backpay) owed to employees in the public service as a result
of the People s Partnership administration s decision to increase
compensation to public servants by an average of 14 per cent
in 2014 and 2015.
One observation that can be made about the
information in the table is that the Govern-
ment s proposed expenditure on wages and
salaries in 2017 is 5.7 per cent higher than
the estimated expenditure for compensation
Does the additional $562 million in spending on wages and
salaries in the 2017 fiscal year envisage higher salaries during
the current fiscal year or is that sum an estimate of expenditure
on increments and allowances?
The first question that citizens of T&T need to address is
whether the Government can afford to increase public service
wages and salaries in the context of declining revenue.
In the 2017 budget, Minister of Finance Colm Imbert estimated
that the Government would collect $47.4 billion in revenue
and would spend $53.4 billion net of capital repayments and
sinking fund contribution, which means a fiscal deficit of $6
Of the $47.4 billion in revenues, the minister estimated that
$9.69 billion would be derived from one-off revenue, which
includes the sale of assets, dividends from state companies
and the repayment of Clico.
That means the Government expects that T&T would generate
$37.7 billion in taxes and royalties in recurrent revenue in 2017,
that $9.69 billion in revenue would come from the one-off
sources (capital revenue) and that a further $6 billion in loans
would be needed to pay all the bills for the current fiscal year.
In effect, the Government s $10.3 billion wages and salaries
bill for 2017 is being financed by $9.7 billion the State expects
to collect from the sale of assets, dividends from state-owned
companies and the repayment of Clico debt.
In other words, the $37.7 billion that the Government expects
to collect in taxes and royalties during the 2017 fiscal year can
be accounted for by:
• expenditure on debt servicing---$8.178 billion
• current transfers to state bodies---$6.862 billion
• current transfers and subsidies---$22.927 billion
TOTAL debt servicing and T&S---$37.967 billion
Looked at this way, the $5.711 billion expenditure on goods
and services and the $10.312 billion spending on wages and
salaries will not be funded from taxes and royalties but from
one-off capital revenue and borrowing.
Does PM really believe in
wage freeze for public servants?
Fiscal Wages Total W&S
Year & Salaries spending %
PRIME MINISTER KEITH ROWLEY
Links Archive November 9th 2016 November 11th 2016 Navigation Previous Page Next Page