Minister of Finance, Winston Jordan, recently announced that the servants within the public sector will be assured of a salary increase, nearing the year’s end.
He made this proclamation during a November 9, 2019 meeting with residents of Kwakwani, Upper Demerara-Berbice, where he spoke of the overwhelming success of the current administration over the last four years, among other topics.
Late last week, Minister Jordan announced that public servants would receive increases to their salaries that will be retroactive to January 1, this year. He is expected to provide details of the salary hike to Cabinet for approval during this week.
In 2017 and 2018, no bonuses were granted to public servants. But since coming into office in 2015, the Coalition Government has boasted about providing retroactive salary increases. Between 2015 and this year, the minimum wage has been hiked by some 62 percent.
“Look at the space of time; we started increasing salaries from the 1st July 2015 and the last increase pushed salaries by over 64 percent by the time we are finished with salaries for this year.
“I can guarantee you that between July 1, 2015 and January 1, 2019, it will be over 75 percent of the 2015 figure,” the Minister said with enthusiasm.
A total increase of 75 percent from 2015 would place the minimum wage at about $70,000.
According to the Finance Minister, the previous increases were done while giving back to Guyanese whose taxes were previously extracted from their monthly contributions to the National Insurance Scheme (NIS).
Furthermore, the Coalition Government increased the personal allowance of public servants. Before 2015, their personal allowances stood at $50,000. This means that if their salary was $60,000, $50,000 remained as the personal allowance, while the other $10,000 was taxed at 30 percent.
Minister Jordan told Kaieteur News in a telephone interview yesterday that there is, however, an inhibitor to paying public servants even higher wages i.e. that the workforce is too labour intensive.
He explained that there are many jobs that can be replaced by technology, and could result in a downsizing of the top-heavy public sector.
During his presentation at a BRAND You Tax Forum held on November 9, last, the Finance Minister explained, “If you really want to downsize government, you are talking about another 15,000 to 20,000 workers to really make that saving to pay those who will remain and you know that cannot happen. Even if it can happen, it would not happen overnight.”
He continued by relating that the tax rate draws a parallel with the magnitude of the government’s expenditures.
The Finance Minister added that the smaller the government, the lower the taxes. “So in developing countries, especially the ones like Guyana [which have] a very big government, we literally end up taxing everything.”
He related that this acts as a disincentive to the expanding businesses in the private sector.
President of the Guyana Public Service Union (GPSU), Patrick Yarde, has consistently criticised the Government for imposing increases rather than renegotiating the wages and salaries.
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