Analyst suggests wage freeze for public sector

At least one financial analyst is suggesting that the Government pursue the freezing public sector salaries as it moves to contain the wage bill.



Ralston Hyman said this may be the best option given the worsening economic conditions and the need for people to maintain their purchasing power.



The Government has said wage freezes, job cuts or salary cuts may be considered to contain the public sector pay bill.



Yesterday, the minister with responsibility for the public sector, Senator Dwight Nelson, met with unions to start discussions on the matter.



The parties ended without making a decision on what measures will be implemented to reduce the wage bill which is now $111 billion a year.



Mr Hyman says it’s important that an agreement is reached soon and a public wage freeze is the way to go, but it should be accompanied by other options like a drop in the GCT rate to 10 per cent



But Anne Shirley, who is also a financial analyst, said in reality there may be little option for negotiations on a salary freeze.



She says with less revenues expected this year, there may not be enough money to pay civil servants and so there may be wage cuts.



Miss Shirley said this is also a good time for the Government to cut the Cabinet.



The Government is projecting to get less money in taxes this year with more than 12,000 people losing their jobs in the last few months.