Civil service wages to grow $77m in 3 years

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government's civil service wage bill is forecast to grow by $77.2m or 9 percent over the three years to 2026-2027, it was revealed yesterday, with the Davis administration's industrial deals already adding $18m to the annual cost.

Pia Glover-Rolle, minister of state for the public service, answering the Opposition's written questions in the House of Assembly, confirmed that the size of government will continue to expand as she revealed that $20m has been allocated in the current 2022-2023 Budget to cover new public sector pay deals.

Speaking on behalf of Fred Mitchell, who has the main ministerial responsibility for the public service, she said: "The Government estimates that the annualised additional incremental costs associated with the labour agreements it has completed since coming to office is approximately $18m.

"By honouring commitments to public sector employees and the various interests represented, we have brought much overdue relief to hardworking teachers, nurses, doctors and other public sector employees. These commitments were long overdue, and our administration is proud to have honoured the obligations to those who do so much for our country."

Mrs Glover-Rolle added that the increased public sector wage bill aligned with the Budget's funding, saying: "The Government confirms that the estimated annualised additional incremental costs associated with the completed labour agreements align with the relevant, related budgetary allocations for the current fiscal year.

"$20m was allocated for labour agreements in the 2022-2023 Budget. The Government remains committed to ensuring that all budgetary allocations are carefully managed and monitored, and that all expenditures are in line with the Government's broader fiscal goals and objectives."

As for the medium-term growth in the civil service wage bill, Mrs Glover-Rolle added: "The Government forecast growth in public sector wages over the medium term from $863.9m in fiscal year 2023-2024 to $941.7m in fiscal year 2026-2027."

Elsewhere, the Prime Minister pushed back on the Opposition's challenge as to why the 2022-2023 Budget's projected deficit differed from that set out in last year's Fiscal Strategy Report when the Fiscal Responsibility Act requires that they be "consistent".

"There is no legal requirement that the annual Budget be an exact replica of the Fiscal Strategy Report," Philip Davis KC said. "However, the annual budget is consistent with the broader goals and objectives of the Fiscal Strategy Report, including the focus on deficit reduction.

"The Government remains committed to achieving its fiscal targets, and the Budget was formulated with this objective in mind. While the target deficit for the Budget may differ slightly from the targets established in the Fiscal Strategy Report, the overall strategy for reducing the deficit and achieving fiscal sustainability remains the same."

And, dealing with the Opposition's attack on the Government's decision to eliminate the 10 percent duty on imported yachts outside the Parliamentary process, the Prime Minister said: "This category is not a significant revenue earner for the Government. If anyone looks at it, they'll see it's negligible or non-existent. They don't import their yachts to The Bahamas, and one of the reasons why is we have duty on yachts."

This, Mr Davis, added as a barrier to The Bahamas' ambitions to establish a yacht registry "which we've [both political parties] been touting for many years. We consider it more useful for the purposes of creating a yacht registry to eliminate duty that we're not collecting anyway because people are not importing their yachts".

"The elimination of duty on yachts purchased and operated by wealthy individuals is an issue that has been discussed extensively by the Government and various stakeholders, and there is recognition that this policy can provide significant benefits to the maritime industry in The Bahamas. However, to date, no importer has utilised this mechanism, and the Government will continue to examine ways to facilitate and grow the sector."

Mr Davis also justified the Government's position that elimination of this duty rate by "remission" was correct. "However, to-date, there have been no qualifying imports, and thus the issue has not arisen in practice," he added. "The Government remains committed to ensuring that all laws and regulations are applied appropriately and will continue to monitor and assess the situation as it develops."

The Prime Minister also denied that the Government was required to lay the agreement for the $20m loan by Jamaican-based Proven Group, which was facilitated by local firm, Simplified Lending, in the House of Assembly because this was not a loan borrowed by itself or that it had guaranteed. Instead, the borrower was the Ministry of Housing via its function as a corporation sole, which will be responsible for the loan's repayment.

The loan is to finance the Government's 365-lot Renaissance at Carmichael housing subdivision, and Mr Davis said: "The Ministry of Housing, being a corporation sole, is authorised to receive advances or loans from financial institutions, whether from the public or private sectors, to fulfill its mandate of developing homes. The ministry, therefore, obtained the necessary approvals and followed due process in securing the loan....

"The Debt Management Act does not apply in this case. The Ministry of Housing is a corporation sole. As such, the loan proceeds were deposited into the account of the corporation sole in accordance with the relevant regulations and guidelines." The Prime Minister also asserted that a competitive bidding process was used to select Proven.

Turning to the hiring of Rothschild & Co as the Government's debt advisers, Mr Davis said: "Rothschild and Company has been engaged in an advisory capacity by the Government to provide guidance and support in the international debt market. As one of the leading, highly-specialised, international financial advisory firms with expertise in debt management, Rothschild provides strategic advice to the Government on various aspects of its international debt portfolio.

"Advice includes the analysis of market conditions, identification of potential risks and opportunities, and the provision of recommendations on the most effective ways to structure and manage the government's debt portfolio.

"The scope of work for Rothschild involves a detailed review of the Government's current debt profile and the provision of ongoing support in implementing any recommended strategies. They are also brokering relationships with bond-holders and other market actors."

Comments

moncurcool says...

On question. Why?

The government should be cutting expenses. Yet, as always, government just know how to spend. Never save or reduce spedning.

And then have the audacity to bring in a foreign firm to talk about helping them to manage the debt.

This is just plain ridiculous.

Posted 21 February 2023, 4:31 p.m. Suggest removal

BMW says...

Unable to manage anything. Government should be working to reduce the exposure to taxpayers instead they just keep juicing them! Every civil servant and politician has their own personal agenda, so unfortunate!!!!

Posted 22 February 2023, 9:40 a.m. Suggest removal

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