It has offered a lump sum payment of $1,300 to all civil servants as it continues to negotiate new industrial agreements with The Bahamas Public Services Union, The Bahamas Nurses Union, and The Bahamas Union of Teachers.
But all three groups have rejected the government’s offer, demanding more money.
Public Services Union President John Pinder is demanding an increase of $150 per month for his members.
Teachers Union President Ida Poitier last week said the teachers deserve much more than the $1,300 being offered.
Her union is demanding that each teacher be paid a lump sum payment of $4,000, in two installments of $2,000 each, one in September and the other in January.
On Monday, Nurses Union President Cleola Hamilton also said nurses deserve much more than what the government is offering and she indicated that the union is preparing a counter proposal.
Government officials have said they would not negotiate in the press so it remains unclear whether they will give in to the unions’ demands.
The latest round of demands comes as the government works to drive down its level of debt.
In its concluding statement following its 2005 Article IV Consultation Mission in May, the IMF team said restraint of public sector wages is needed for several reasons.
“While the prospective increases in wages will depend on the terms of a new public sector wage agreement now under negotiation, a number of factors are relevant from a fiscal and macroeconomic perspective,” the IMF said.
It noted that an assessment of the need for general wage increases should take account of the substantial increases, in inflation-adjusted terms, in the average wage of public servants since 1999.
The IMF also said there could be some spillover to the private sector from previous public sector wage increases, which are out of line with what is needed in the private sector to maintain international competitiveness.
It warned that a significant increase in the government’s wage bill for 2005/2006 would complicate efforts to achieve the government’s fiscal targets.
“Significant increases in the government’s wage bill would, for a given deficit target, require spending cuts or greater revenue efforts than otherwise,” the IMF said.
It appears then that the government may be in a quandary over the civil servants’ demands.
Government negotiators recently said that $24 million has been allocated to cover salary increases for public servants.
Mr. Pinder, the BPSU president, said on Tuesday that what his union is demanding would add up to around $34 million annually and would also cover increases for teachers and nurses.
He said that this is a reasonable demand that would not hurt the government’s fiscal position.
“Thirty-four million dollars could cover the entire public service,” Mr. Pinder told The Bahama Journal “That’s very reasonable.”
He said that the union did not ask that the payments be retroactive to 2003 because it understood that the government still has certain fiscal challenges and demands.
“We don’t want the government to have to increase taxes-you want to be able to enjoy an increase [in salaries] without the government having to tax you and take it right back from you,” Mr. Pinder said.
Following the IMF’s report back in May, Minister of State for Finance James Smith told The Bahama Journal that the government must use this period of steady economic growth to pay down its debt as opposed to committing to significant salary increases for public servants.
By: Candia Dames, The Bahama Journal
