Axe to fall on Jamaica public service

KINGSTON, Jamaica, September 30, 2009 – Positions in the Bruce Golding Cabinet will be among those cut as the Jamaica government sends home workers, closes state agencies and merges others, in an attempt to slash a wage bill that the Prime Minister says can no longer be sustained.

Golding insisted that there was no choice but to trim the 117,000-member public service if the government was to remain viable and he said a special unit will to be set up in the Office of the Prime Minister to look at modernising and restructuring the country’s entire public service.

“Some departments and agencies will have to be eliminated. Some will have to be merged,” the Prime Minister said.

He made the announcements in a highly anticipated speech that was not delivered until minutes before one o’clock this morning, after the Standing Finance Committee of Parliament ended a marathon 13-hour session that began at 10 am yesterday.

Golding also said that agencies which collect fees for their services – like the Registrar General’s Department and the Firearm Licensing Authority –will be forced to finance their own operations.

Golding said all these moves would not only reduce the wage bill – which he put earlier this month at J$127 billion (US$1.44 billion) – but result in greater efficiency.

However, he gave no indication as to how many workers would be affected by the adjustments or when the changes would occur.

The Prime Minister’s announcement comes a month and a half after he said his government was determined to avoid job cuts in the public sector.

“There are going to be some serious expenditure cuts this year…We do not propose in those cuts to make any worker redundant,” he said in August during CVM’s current affairs programme, ‘Direct’.

“Our public sector wage bill is now some 10.8 per cent of Gross Domestic Product (GDP). Our commitment over the medium term (three years) is to get that percentage down to below nine per cent; nothing above nine. Any wage adjustment during that period will have to be consonant with that target,” Golding said at the time.

However, over the weekend, the Prime Minister put Jamaicans on warning that some major changes would have to be made to government spending in order to pull the country out of its financial hole.

Earlier this month, former minister without portfolio in the finance ministry Don Wehby revealed that the International Monetary Fund (IMF), which Jamaica has approached for US$1.2 billion in balance of payment support, had suggested that the public sector wage bill be cut.

Wehby, who has since returned to the private sector after serving the Golding Cabinet for two years, said it was proposed that it be slashed by about J$15 billion (US$170.3 million).

Meantime, during yesterday’s session of Parliament, Finance Minister Audley Shaw announced what he described as “a minimal tax package”, with increases on Departure Tax, as well as the General Consumption Tax (GCT) on telephone calls and instruments, to fill the J$1.7 billion (US$19.3 million) budget gap.

Those taxes will come into effect from tomorrow.