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‘We can’t sit idly by’

Clarke defends public-sector salaries amid PSOJ caution

Published:Tuesday | February 22, 2022 | 12:09 AM
Finance and the Public Service Minister Dr Nigel Clarke (left) and Winston Smith, president of the Jamaica Teachers’ Association, participate in a ceremony confirming the teachers’ acceptance of the Government’s offer of a four per cent hike in salar
Rudolph Brown/Photographer
Finance and the Public Service Minister Dr Nigel Clarke (left) and Winston Smith, president of the Jamaica Teachers’ Association, participate in a ceremony confirming the teachers’ acceptance of the Government’s offer of a four per cent hike in salaries for the contract period April 1, 2021, to March 31, 2022. The signing took place at the Ministry of Finance’s National Heroes Circle headquarters on Monday.

Minister of Finance Dr Nigel Clarke has defended salary scale realignment as pragmatic in response to concerns aired by the Private Sector Organisation of Jamaica (PSOJ) that public-sector employee compensation as a share of the gross domestic product (GDP) was elevated.

The PSOJ said within the first year of the announced public-sector transformation process, the compensation numbers for expenditure will see wages exceeding the GDP ratio fiscal rule of nine per cent.

Remuneration is projected to continue to breach the fiscal target of nine per cent into the medium term and remain above 11 per cent of GDP up to the 2025-26 financial year.

“We note the need to improve workers’ remuneration, but we believe that it must be done prudently and not at risk to the country’s hard-won fiscal gains. This nine per cent fiscal target is entrenched in law and we run the risk of remaining in breach if this is not addressed,” the PSOJ said in a release last Thursday.

“There is also a risk of interest rates increasing more than budgeted due to inflationary pressures which could see debt-service costs coming in higher than budget.”

Clarke told The Gleaner on Monday that the concern raised by the PSOJ is “valid and cannot be dismissed”.

“However, in policymaking, it’s always about trade-offs. At the current time, the structure of public-sector compensation is unsustainable. The public sector is unable to attract, to retain the skills and the competence we need to run a modern bureaucracy,” he said.

Clarke said Jamaica suffered from that deficit and explained that there are critical areas that call for analytical and managerial skills that the Government is unable to fill.

He said there are also shortages in the police force, the health sector, and among teachers.

“We can’t sit idly by and allow what is clearly unsustainable to continue. We will be engaging in a comprehensive restructuring of public-sector compensation, which will take place over a period of time, that begins in the next fiscal year, but it does not stand on its own,” Clarke said.

“It is one element of a suite of reforms that include implementation of shared services, rationalisation of public bodies, implementation of a comprehensive HR system that, over time, will allow us to improve the efficiency and effectiveness of the public service but also in a manner that’s affordable and sustainable,” the finance minister added.

In the long term, Clarke said it is expected that the ratio will converge at a more sustainable level.

judana.murphy@gleanerjm.com