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BIGWU SAYS REJECT THE FIVE PER CENT CAP!

posted 15 Jun 2011, 18:59 by Gerry Kangalee   [ updated 15 Jun 2011, 19:32 ]

BIGWU SAYS REJECT THE FIVE PER CENT CAP!

The Banking Insurance and General Workers Union (BIGWU) prepared the following statement that demonstrates clearly that Minister Dookeran 's contention that the government cannot afford to pay more than 5% to workers in the public sector is untenable.

BIGWU President Comrade Vincent Cabrera
The Finance Minister has introduced a wage restraint policy, by virtue of the five percent cap being applied to wage and salary negotiations in the public sector.

Because the State employs the largest proportion of employees in Trinidad and Tobago, negotiations in the private sector is affected negatively.

Introduction of a wage restraint policy is unfair in the context of the absence of a National Incomes Policy.

After Tax Profit recorded by Republic Bank increased from $1.038B in 2009 to $1.074B in 2010. In the case of First Citizens, their profit figure increased by $74M during that same period.

The first statement made by the Finance Minister on his assumption of office was that “the treasury was empty”.

The truth of the matter is that the state of the economy was not as bad as painted by Mr.  Dookeran. The expenditure announced in the National Budget for 2011 was $49B (bigger than in any other year). He has recently returned to the Parliament to ask for more money by way of budgetary expenditure.

By the end of the first quarter of 2010, the economy had already come out of negative growth; the economy enjoyed its second consecutive quarter of economic growth. The Central Bank reported that the economy had expanded by 2.3% by the end of the first quarter of 2010. GDP grew by 4.5% for 2010. Standards and Poors gave the country a credit rating of A at the end of 2010.                                                                                        

Mr. Dookeran has pointed to the existence of a deficit. The actual deficit for 2010 stood at 0.22 percent of GDP. This is an extremely favourable deficit. Deficit financing is common in Europe and the USA, where although President Obama campaigned against the large American deficit, under his Presidency the deficit has been increased even further. 

The 2011 Budget was based on an oil price of US$65.00 per barrel and a Natural Gas price of US$2.75 per mmbtu. The oil price is presently US$111.05 per barrel and the price of Natural Gas is US$4.73 per mmbtu. This means that government’s revenue as per foreign exchange earnings from oil and gas increased by at least twenty five per cent (25%).

During the period 2006 to 2011 Government’s expenditure grew from $37.7B to $48.9B. However during the period 2007 to 2010, the percentage of government’s expenditure on salaries and wages fell from 20.7% to 17.9%.

Over the period 2001 to 2010, the share of public service wages and salaries as part of government’s current revenue declined from 30.6% to 15.6%.

Over that same period, the share of public servants salaries and wages in relation to GDP also declined from 7.4% to 5.2%.

The National Budget for 2011, saw an increase in government’s expenditure of 12.5%, however expenditure on government’s salaries and wages was a paltry 2%.

The above arguments are compelling enough to inform workers to take a stand against the five percent cap. But to add insult to the injury, it should be noted that the private sector owes the government $13B in unpaid taxes.

References:

• Central Bank of Trinidad and Tobago, Annual Economic Survey 2010.

• Central Bank of Trinidad and Tobago, Quarterly Economic Review
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