Government Cannot Afford $149 Billion Wage Bill, Says Senator Nelson

Minister without Portfolio in the Ministry of Finance and the Public Service, Senator Dwight Nelson, has said that the Government cannot afford the wage bill which it will be saddled with in 2009/2010.
“The Government cannot pay a wage bill of $149 billion,” Senator Nelson said Friday(April 3).
He explained that the Government is grappling with an increasing wage bill. For this month, the wage bill was tabled at $149 billion, while at the close of 2008 the payout was $111 billion. He said that he has been negotiating with all the public sector entities, persuading them to support the Government’s efforts, because of the declining revenues.

Chair of the Public Relations Office and Publications Committee at West Indies Group of University Teachers (WIGUT), Dr. Anna Perkins, (left); Minister without Portfolio in the Ministry of Finance and the Public Service, Senator Dwight Nelson, (second left); Vice President of Jamaica Confederation of Trade Unions, Danny Roberts, (second right); and President of Jamaica Chapter of Association of Caribbean Higher Education Administrators (ACHEA), Beverly Hunter, (right), in discussion at ACHEA in collaboration with WIGUT discussion forum on: ‘The Impact of the Financial Crisis on Job Security in Higher Education’ that was held at the University of the West Indies, Mona on Friday, April 3.

He said that the administration is considering some “harsh and hard” decisions, as means of tightening budgetary spending. Among these were possible job cuts in the public sector or salary reductions by state workers. He noted that there were 60,000 posts within the public entities, but some 100,000 employees.
“The public sector in Jamaica is not spared from the threat of job losses,” said the Minister.
Mr. Nelson was speaking at the Association of Caribbean Higher Education Administrators (ACHEA) discussion forum on: “The Impact of the Financial Crisis on Job Security in High Education”, at the University of West Indies(UWI), Mona. The forum was staged in collaboration with the West Indies Group of University Teachers(WIGUT).
Senator Nelson said that the global financial meltdown has significantly impacted on Jamaica’s trade industry, and the collapse of the local bauxite sector was proof.
Locally, West Indies Alumina Company(WINDALCO) has sent home 500 workers, with 800 employees remaining but earning 40 percent of their salary. ALPART laid-off 1,176 people to shut-down in April.
Job security beset other bauxite companies, as St. Ann Bauxite released 150 people, with 600 left behind receiving 80 percent of regular salary, he told the audience.
The Minister said that the impact of the unfavourable global financial situation on the economy, has resulted in a reduction in production, decrease in remittances, lower than planned revenue inflows, unstable foreign exchange markets and loss of jobs.
In terms of jobs, some 17,000 posts were made redundant, excluding in the sugar industry.
Senator Nelson also provided statistics on the impact of remittances. He said that, according to the Bank of Jamaica (BOJ), inflows declined by 18.3 percent in February, down from $163 million to $133 million.
Additionally, the February issue of BOJ’s Balance of Payments Remittance Update stated that Jamaica had a total intake of US$1.8 billion, between April 2008 and February 2009. This year, for the first time since 2000, there was a decline in remittance inflows into Jamaica.
“Remittances to a large extent address consumer needs of our people, purchases of goods and services, sending children to school, health, construction,” he noted.
“Decline in remittance can also lead to greater demand on social safety net amenities provided by the state,” he added.
Senator Nelson said that the Government faced an uphill battle, amid the crisis, in sustaining productive development and growth.
He said that for these reasons, the administration implemented a stimulus package, late last year, which resulted in a loss of revenue for the Government of $862 million, January to March 2009. The stimulus package included an increase access to credit, removal of custom user fees on capital goods and raw material, reduction in general consumption tax and an increase in the tax threshold.
President of Jamaica’s Chapter of ACHEA, Beverly Hunter, said that though the country was experiencing the effects of the financial crisis, investments in training and education should not falter, as an economy fosters with skilled personnel.
“Our greatest single challenge is a shortage of a highly educated skilled and intellectually motivated labour force,” said Mrs. Hunter.
She said small developing states, should follow the route of Barbados, who responded to the financial crisis by investing in higher education, training and research.
Professionals in the field of business, education and finance participated in the discussion forum hosted by the nine-year-old Caribbean organisation.