Thousands of public servants could be dismissed from the service if Government is forced to abandon the tax measures announced in the recent Budget.
The National Union of Public Workers (NUPW) is threatening industrial action if Government does not scrap the tax proposals, including the controversial National Social Responsibility Levy (NSRL), or institute a “coping subsidy” for public servants until salary negotiations have been concluded.
However, Minister of Finance Chris Sinckler tells Barbados TODAY the Government is fast running out of options.
“I would say that if this really is the union’s position, it is as ill-advised as it is unfortunate at this time. I do not believe that the union leadership is oblivious to the fact that the alternatives to the measures which we introduced, including an increase in the NSRL, will be far more hurtful to public officers than what is proposed,” Sinckler said.
“Indeed, lest they forget, perhaps it bears reminding that there are a growing number of persons out there who believe that Government should immediately and substantially reduce the size of the public sector, especially its wages bill. Now while that may be coded language for some, it simply means that Government should send home thousands of public servants from the service.”
Sinckler said the administration, which in 2013 severed 3,000 public servants, had rejected this route and had chosen an alternative path, which “we are now hearing that the workers’ representatives don’t want and in fact are threatening industrial action over.
“Well at least we know where their head is even if we do not agree with them. But make no mistake about it; those are the hard choices which we face at this time. So if the NUPW leadership is prepared to make the choice of seeing large amounts of their membership lose their employment and with it the capacity to earn a living, then I would definitely consider that position to be both ill-advised and undesirable,” he warned.
However, the minister said he was prepared to discuss the issue with the union, although he gave no indication that he was willing to budge.
In search of an answer to a $537.6 million deficit, Sinckler announced in his 2017 Financial Statement and Budgetary Proposals on May 30 that the NSRL on imported and locally manufactured goods would climb by 500 per cent, from two per cent when it was introduced last year, to ten per cent.
A two per cent tax on foreign exchange transactions was also announced, as well as increases of up to 25 cents on the tax on gasoline and diesel, all to take effect on
July 1 and designed to raise $542 million.
This has upset the NUPW, which has demanded a 23 per cent pay rise for Government workers, who have not had an increase in nine years.
The union’s president Akanni McDowall said over the weekend the NUPW had received permission from its executive “to do whatever is necessary to protect the interests of its members and the wider citizenry of Barbados” if the administration refuses to relent.
McDowall contended that the tax measures would drastically increase the cost of living by at least 15 per cent, and would be too much for the workers to bear.
“The workers of Barbados are not in a position to bear the consequences of the increases in taxes and levies at this time,” he said.
“Public servants have not received a salary increase in almost a decade, and although salary negotiations have commenced, there is no clear agreement or dates set for the conclusion of negotiations.” McDowall stressed, while warning that Government’s attempt to keep the struggling economy afloat by injecting $500 million in taxes would diminish the spending capacity of already financially strained households.
“The union further recognizes that the hike in the social responsibility levy from two per cent to ten per cent will result in across the board increases in the price of food, other necessity items and further diminish the spending capacity of its members and the wider public . . . These measures cut at the core of the functioning of every household in Barbados, some of which are already under extreme pressure,” the union leader added.