$2B in budget for early retiring public servants

Jamaica – The Government has added $2 billion to the 2017/18 budget to help meet the cost of an uptick in public servants seeking early retirement during the fiscal year.
Minister of Finance, Planning and the Public Service Audley Shaw told the Standing Finance Committee of the House of Representatives last week that the long-delayed challenge of reducing the wage bill to nine per cent of gross domestic product is really among several targets on the way to completing public sector transformation.
However, Shaw was enthusiastic about the Cabinet “firming up” a policy to handle the growing demand for early retirement from the public service which has been experienced this year.
“There has been an uptick in requests for early retirement, which has cost us $2 billion on the budget. But it is part of an attrition process that will help in containing the cost,” Shaw said in response to a question from Opposition spokesman Dr Peter Phillips.
In response to questions from Opposition MP and former Finance Minister Dr Omar Davis, Shaw accepted the need to ensure that there is no wholesale early retirement, as there are positions which need to be preserved, the removal of which could lead to deficiency in Government’s service delivery.
“There are strict guidelines around the rehiring and replacement of positions,” he informed the Opposition.
“We are building a bicycle and riding at the same time, because as we build out and grow the economy there is going to be a national demand in the private sector for jobs. It’s going to happen, no question about that,” he stated.
“It happened before in the 1980s: Thirty thousand jobs cut from the public sector, and 100,000 created in the private sector. It has happened before and will happen again,” he added.
However, in response to Dr Phillips’s questions about how responsibility for the process is shared between the Ministry of Finance, the Cabinet Office and the Office of the Prime Minister, Shaw admitted to the need for increased transparency.
“It is important that Parliament and the country understand how the work is divided. I am working with the financial secretary to prepare for me a report as to how it works. I think it is important for all of us, including my ministry,” he said.
In terms of Shaw’s announcement that 84 government agencies are to be merged, closed or divested, Phillips asked for a list of the entities and how far discussions, including with the affected staff and their future, have proceeded.
Shaw said that this would be the task of the Implementation Unit at Jamaica House. But he suggested that the Government be given time to do the appropriate consultations before making more public announcements.
“And I think we need to craft a means for the Opposition to be consulted. I think that the prime minister would welcome that, and I don’t have a problem with it either,” he said.
Shaw had announced in mid-February that 84 public entities are to be merged, closed or divested as part of the Government’s ongoing rationalisation of the public service.
He made the disclosure at the signing of the divestment of operations of Caymanas Track Limited (CTL) to Supreme Ventures Limited. He noted plans for merging the Jamaica Racing Commission, the Betting, Gaming and Lotteries Commission, and the Casino Gaming Commission, to be subsumed into a single Jamaica Gaming Commission.
Shaw, in describing the divestment as the “perfect example of rationalisation”, noted that putting CTL in the hands of a private sector entity will create more jobs, enable the use of appropriate technologies, and ensure greater levels of investments.