National Effort Should Be Focused On Increasing Productivity And Efficiency – Senator Duncan

Government Senator, Keith Duncan, says the national effort should be focused on increasing productivity and efficiency across both the public and private sectors, as this is essential to accelerating and sustaining stronger economic growth.

Making his contribution to the debate on the Appropriation Bill 2026 in the Senate on March 27, he said this will drive growth, thereby increasing growth levels beyond the forecasted one per cent to three per cent.

The legislation authorises expenditure for the financial year 2026/27 and stipulates how the money will be allocated to the various services and purposes of the Government.

“Increasing productivity increases domestic demand, GDP (gross domestic product), and tax revenues. This will create greater fiscal space, increase per capita incomes for public and private-sector workers, which currently stands at US$8,000 per capita, which is amongst the lowest in the region, so we have to increase productivity in order to move this number,” Senator Duncan said.

“With the development agenda for Jamaica, we have a real opportunity if we companion increasing productivity with this development agenda. We have a real opportunity as a country to really move these per capita GDP levels,” he said.

He argued that Jamaica’s productivity challenge is a wake-up call that we can no longer ignore.

“The data the Prime Minister presented on labour productivity was sobering and deserves to be widely discussed. Jamaica produces approximately US$8.81 output per worker, less than half the Caribbean average of US$20.50. This is a structural challenge, and it demands a structural response, including investment in skills, technology, and the productive sector,” he said.

Senator Duncan said the Prime Minister has indicated that a full policy position on productivity will be brought to Parliament.

Meanwhile, he said in the current wage negotiations, all stakeholders will need to take into account the fiscal challenges.

He said increasing productivity and efficiency of the public and private sectors will become crucial to provide increased tax revenues and fiscal space.

“After tremendous sacrifice and restraint of the public sector, there was a cumulative increase of $300 billion from a compensation level of $222 billion when the public sector held out until the public-sector compensation review was completed. At that time, the wage bill was $222 billion,” Senator Duncan noted.

“That wage bill has now moved to $519 billion in 2026/2027, that’s an increase of $60 billion per year, or a 20 per cent average in public-sector compensation year over year for the last five years, from $222 billion to $519 billion. That creates a fiscal risk, and that is a decision that was taken by the Andrew Holness-led Administration about compensating our public sector at fair wages,” he said.

He said this does create a real compression on expenditure, noting that this has to be managed very carefully.

“As a percentage of tax revenues, our public-sector compensation is now at 56 per cent in 2025/2026 of tax revenues, and 13.8 per cent of GDP. Now, this is coming from 9.6 per cent of GDP and 36.1 per cent of tax revenues. As a country, as Jamaicans, we need to work together to ensure that we moderate, manage, and everybody takes a collective responsibility to this, because we need to educate, make our country aware, such that we can all manage expectations,” Senator Duncan said.

“As we know, if you have the public sector taking 56 per cent of tax revenues, and it will average right around 50 per cent for the next four years, as outlined in the fiscal policy paper, this will reduce the fiscal flexibility we have and, therefore, where we’re talking about health, education, national security, and our social safety net, these are areas where we need to focus, so we just need to ensure that we have the right balance in terms of our expenditure,” he added.

He said the difficult but honest conversation regarding future wage settlements should be anchored in productivity and GDP growth, rather than inflation alone.

“This is a difficult but necessary conversation, and it must be had honestly in Jamaica’s best interest,” he said.