EDITORIAL - Reforming the public sector

It is now well over a year since Prime Minister (PM) Bruce Golding initiated the latest round of discussions on public-sector reform, declaring it to be a matter of great import, demanding immediate attention.

So urgent was the matter that the PM, if he did not say so directly, left this newspaper, at least, with the clear impression that the changes would have started at the beginning of the Budget year last April.

The heavy concentration, then, was how the Government might cut costs to rein in a galloping fiscal deficit and a limping economy that was buffeted by the global recession.

There was consensus that the country could not maintain a public sector that gobbled up nearly 13 per cent of gross domestic product (GDP) in emoluments. The International Monetary Fund, with which the Government was negotiating for a US$1.3-billion bailout and seal of good housekeeping, urged the administration to reduce its pay bill to around nine per cent of GDP.

Only talk

No changes to the structure or operation of the public sector has happened. Except that some public-sector workers got a portion of outstanding, but deferred, pay adjustment. And a committee was established to study public-sector reform and has, we are told, submitted a report, which has been talked about.

So, what's next? Nothing, mostly likely. Not for now.

It is less than two years until Mr Golding and his Jamaica Labour Party will have to face the electorate. This is about the time when governments begin to fudge hard decisions, and this administration will feel it has a greater incentive to do so.

The Golding administration is in a bad economic situation that is not entirely of its own making, and it must also deal with the many political missteps that are entirely of its own propriety.

Time for real change

In the circumstances, we have two bits of advice for Prime Minister Golding.

The first, which we have offered before, is to assume that today is his first day in office and that he will have more time than the period remaining in this term. In that regard, he can approach policy without the encumbrance of a politician seeking re-election.

Second, he should close his eyes and recall the days after he formed the National Democratic Movement. His aim, then, was to do what was right. That's what Mr Golding used to say. Many people believed, which is no small part of the reason why he is prime minister.

In the event that Mr Golding is able to engage that part of his being, we have another bit of advice.

The full size of the Government's wage bill is not easily apparent. It is about 12 per cent more than the nearly $127 billion projected for this fiscal year.

The additional $15.3 billion is for pensions paid to retired civil servants. These payments are not specifically funded in the Budget and the beneficiaries did not contribute to the scheme.

This should change, starting with the next Budget. Government workers must contribute to their pension scheme as workers in the private sector do.

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