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Gov’t hints at new taxes - No IMF deal before wage talks settled

No job cuts; more executive agencies coming

Tuesday, January 15, 2013    

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FINANCE Minister Dr Peter Phillips yesterday hinted at new tax measures, but did not go into details, as he announced that public sector wage negotiations will have to be settled before an agreement is inked with the International Monetary Fund (IMF).

The public sector wage issue, he said, was one of several “prior actions” the country must settle to satisfy the requirements of the lending body with which the Government has been in negotiations for months.

“Another prior action requirement of the programme is likely to be a firm commitment on wage restraint in the public sector,” the finance minister told journalists attending a special media briefing at Jamaica House in Kingston, called to report to the nation on the Administration’s three-day Cabinet retreat which ended Saturday.

The Government has been adamant that it will be unable to meet the demands of trade unions representing public sector workers, who have rejected calls for a wage freeze as part of the cash-strapped Administration’s measures to contain costs.

Just last week, minister without portfolio in the Ministry of Finance Horace Dalley, in reiterating the State’s inability to pay wage increases to public servants, cautioned union leaders that it made no sense “sticking up” a broke Government. “You can’t stick up a bruk man. I am asking them to understand that there is no increase on the table, but we are going to fight to keep the jobs,” the Jamaica Observer quoted Dalley in a January 8 story.

It was not clear yesterday how the pronouncement from the finance minister would be accepted by public sector unions, including the Jamaica Teachers’ Association, Nurses Association of Jamaica, Jamaica Police Federation, and the Jamaica Civil Service Association, which have all demanded higher wages and improved allowances for their members.

Senior trade unionist Helene Davis-Whyte, who heads the Jamaica Association of Local Government Officers, was quoted in the January 8 Observer story as saying that the talks had just begun and it was too early to predict a resolution, suggesting that the unions are likely to put up a fight against plans for a wage freeze.

The Administration has also again insisted that there will be no job cuts, even while it said it is “accelerating the Public Sector Transformation Programme which aims at rationalising the entire public service for greater efficiency”.

“… We are looking at the public sector, but we did not say that we are going to be cutting jobs,” Prime Minister Portia Simpson Miller said yesterday, in responding to queries from the media.

Yesterday, as well, Dr Phillips said that “a comprehensive review of the discretionary power of the minister (of finance) to grant waivers has been completed with a view to improving the efficiency of the tax system.

“We have agreed that there should be a sharp reduction and ultimate elimination of ministerial discretion in this regard. We have agreed also that there should be completed, by year end, preparation of omnibus incentives legislation and a Charities Act, which will form the framework of new arrangements in this regard,” Dr Phillips said.

In the meantime, the Government said 12 agencies have been identified for executive agency status, among them the Customs Department.

Simpson Miller said the budget for the 2013/2014 fiscal year will present for the country what the Cabinet believes will be, within the context of the current financial constraints, the best combination of “a coherent and credible macro-economic framework, a programme of increased public and private sector investment in a range of economic sectors, and an enhanced and co-ordinated programme to address the needs of the most vulnerable”.

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