Public Sector Compensation Review To Receive Much Focus In 2022/23

Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says a significant proportion of the impending public-sector-compensation review is expected to be undertaken during the 2022/23 fiscal year.

The review, slated to commence on April 1, is intended to overhaul the structure of salaries and other emoluments in the public service to make it more equitable.

Dr. Clarke said the duration of the exercise will be determined during discussions between the Ministry and bargaining groups and unions representing government employees.

He was speaking during the Jamaica Stock Exchange (JSE) 17th semi-virtual Regional Investments and Capital Markets Conference at The Jamaica Pegasus hotel in New Kingston, on Wednesday (January 26) on the theme ‘Facilitating the Mobilisation of Capital by Effective Legislation’.

“We need to complete a series of consultations with public-sector employees [and their] unions, informing them… and ensuring that the principles [of the undertaking] are understood. But, it should be obvious that it’s not something that we can do in one fiscal year; it would not be fiscally achievable to do that,” the Minister pointed out, while adding that the 2022/23 Budget will give “disproportionate focus” to the engagement.

Dr. Clarke said the public sector currently has more than 325 grade levels and 185 allowances, noting that this makes the compensation structure “complex, inequitable, non-transparent, and fiscally risky”.

He pointed out that addressing these and other related factors “will lead to a rise in public-sector compensation as a proportion of gross domestic product (GDP)”.

“It is, therefore, absolutely critical that restructuring, as necessary as it is, is not seen as and does not lead to a reversal of the fiscal and economic stability that we have achieved. That would be a colossal setback for everyone, including public-sector employees.

After years of sacrifice by every single Jamaican, we have to continue to be judicious in how we deploy public resources,” he added.

Dr. Clarke said in addition to the compensation restructuring exercise, the Government will continue to pursue public-sector transformation and implement strategies to improve efficiency.

These, he reiterated, include mergers, closures and divestment of public bodies; outsourcing of services that the public sector does not have to perform; and introducing technology to facilitate shared services “where we can focus resources and, over time, bring [the] wages-to-GDP ratio back in line over the medium term”.

“Now this will not be an easy undertaking, but it’s a path that we have to take, even as over the medium term we [look to] bring it in line with efficiency gains,” the Minister added.

The three-day JSE Conference is being held at The Jamaica Pegasus hotel from January 25 to 27 under the theme ‘Positioning Capital for Growth: Facilitating, Mobilising and Expanding’.