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EDITORIAL - Greater financial uncertainty ahead
published: Tuesday | January 15, 2008
If Prime Minister Bruce Golding and his Cabinet had lost sight of the deep challenges they face in preparing the Budget for the coming fiscal year, there was a sharp reminder from teachers last week.
First out the blocks with its wage demands, the Jamaica Teachers' Association (JTA) said that they wants a 50 per cent pay hike for the first year of a two-year contract that is to start in April. The request is for a similar increase in the second year, up to April 2010.
But, that is not all. The teachers' union has also asked for a reclassification of its members, which is usually a code for higher pay.
It would not be too bad if it were only the teachers with whom the Government had to contend. Uncomfortably, that is not the case. For, as the senior man at the Finance Ministry, Audley Shaw, will no doubt recall, Edith Allwood-Anderson, the head of the Nurses' Association of Jamaica (NAJ), has an elephantine memory, especially when it comes to promises made to her members.
Indeed, shortly after Mr. Shaw's elevation following last September's general election, the NAJ president reminded him of what she said was a campaign promise to double nurses' salary if he ever got the job. Amid Mr. Shaw's bid to extricate himself from the statement which was interpreted as a definitive promise, Allwood-Anderson produced a video recording to prove her claim.
At the last wage negotiations, the police caused greater discomfort to the previous administration, particularly the then Finance Minister, Dr. Omar Davies, who, one Cabinet morning, was delayed in the driveway of his office by a noisy group of angry policemen and women.
The point is that the Government, and especially Mr. Dwight Nelson, the Minister without Portfolio in the Ministry of Finance who handles wage matters, have their work cut out for them if Mr. Shaw is to craft a credible budget to present in April. Already, the administration is in a monumental struggle to hold the public sector deficit for the current fiscal year to around five per cent of GDP. The out-turn is likely to be higher.
And, the Government is facing the new fiscal year in an environment of deep uncertainty. There are signs that the United States, a key global economic engine, might be heading into recession, which could hurt Jamaica's tourism and remittances. Gordon Brown, the British Prime Minister, has also warned of difficult times ahead in his country.
In this scenario, the Government, if it is unwilling to take a really hard bite on the bullet and slash upwards of 20,000 jobs from the public sector, has to work hard to contain wages in a new memorandum of understanding (MoU) with public sector unions. Gaining an MoU, of course, is possible, but with inflation likely to end at around 14 per cent this fiscal year, after last year's double-digit hike, it will be nigh impossible for the administration to hold pay to anywhere near the 20 per cent over two years as in the last MoU.
This makes the Vale Royal talks between the Government and the Opposition all the more important. If nothing else, Mr. Golding and his ministers should be pushing hard for a social partnership agreement, around which the whole society can rally.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
published: Tuesday | January 15, 2008
If Prime Minister Bruce Golding and his Cabinet had lost sight of the deep challenges they face in preparing the Budget for the coming fiscal year, there was a sharp reminder from teachers last week.
First out the blocks with its wage demands, the Jamaica Teachers' Association (JTA) said that they wants a 50 per cent pay hike for the first year of a two-year contract that is to start in April. The request is for a similar increase in the second year, up to April 2010.
But, that is not all. The teachers' union has also asked for a reclassification of its members, which is usually a code for higher pay.
It would not be too bad if it were only the teachers with whom the Government had to contend. Uncomfortably, that is not the case. For, as the senior man at the Finance Ministry, Audley Shaw, will no doubt recall, Edith Allwood-Anderson, the head of the Nurses' Association of Jamaica (NAJ), has an elephantine memory, especially when it comes to promises made to her members.
Indeed, shortly after Mr. Shaw's elevation following last September's general election, the NAJ president reminded him of what she said was a campaign promise to double nurses' salary if he ever got the job. Amid Mr. Shaw's bid to extricate himself from the statement which was interpreted as a definitive promise, Allwood-Anderson produced a video recording to prove her claim.
At the last wage negotiations, the police caused greater discomfort to the previous administration, particularly the then Finance Minister, Dr. Omar Davies, who, one Cabinet morning, was delayed in the driveway of his office by a noisy group of angry policemen and women.
The point is that the Government, and especially Mr. Dwight Nelson, the Minister without Portfolio in the Ministry of Finance who handles wage matters, have their work cut out for them if Mr. Shaw is to craft a credible budget to present in April. Already, the administration is in a monumental struggle to hold the public sector deficit for the current fiscal year to around five per cent of GDP. The out-turn is likely to be higher.
And, the Government is facing the new fiscal year in an environment of deep uncertainty. There are signs that the United States, a key global economic engine, might be heading into recession, which could hurt Jamaica's tourism and remittances. Gordon Brown, the British Prime Minister, has also warned of difficult times ahead in his country.
In this scenario, the Government, if it is unwilling to take a really hard bite on the bullet and slash upwards of 20,000 jobs from the public sector, has to work hard to contain wages in a new memorandum of understanding (MoU) with public sector unions. Gaining an MoU, of course, is possible, but with inflation likely to end at around 14 per cent this fiscal year, after last year's double-digit hike, it will be nigh impossible for the administration to hold pay to anywhere near the 20 per cent over two years as in the last MoU.
This makes the Vale Royal talks between the Government and the Opposition all the more important. If nothing else, Mr. Golding and his ministers should be pushing hard for a social partnership agreement, around which the whole society can rally.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.