St. Lucia gov’t sticks to 4-percent wage increase for public sector workers

St. Lucia – Despite threats and rumours of industrial action, government is sticking to its wage-increase proposal, saying it cannot afford to raise public sector salaries by more than four percent due to the “grave” economic situation facing the country.

Prime Minister Dr. Kenny Anthony made the disclosure during an address to the nation under the theme “Time for Closure” on Wednesday night, Feb. 27, 2013, two days after some civil servants reported ill for work in protest against government’s decision not to go beyond its four-percent wage increase proposal.

To date, the Government Negotiating Team is offering four percent over a three-year period, which the Trade Union Federation (TUF) has rejected, sticking to their demand of a six percent from their previous request of 16 percent.

Now that government has reiterated its stance, citing the harsh economic realities of the global economy and its effects on St. Lucia, rumours continue to swirl that public servants may take industrial action. St. Lucia News Online understands that public service unions plan to meet Thursday morning to discuss the prime minister’s speech.

However, Dr. Anthony has called for calm, saying the country needs peace and stability at this time, not upheaval.

He said: “I appreciate that all parties are tired of the negotiating process. The members of the Public Service Unions say that they are tired and that is why they became ill. The members of the private sector and our citizens who require government services on a daily basis are anxious for normalcy to return.

“The government of Saint Lucia cannot and will not go further than the four-percent increase in wages it has offered, coupled with the agreed allowances. For the government the option is clear: its either wage restraint or retrenchment. On the other hand, the members of the Trade Union Federation believe that the government can meet their demands without causing undue harm to the people of Saint Lucia.

“I do not think so. Even with the $42 million dollars which will have to be borrowed to meet the payments, there will have to be sacrifices by all of us, whether by way of compulsory reduction of expenditure and/or the gradual reduction of subsidies extended to the population at large,” he explained.

Dr. Anthony has recommended that the matter be resolved peacefully by arbitration as it appears that the negotiating parties have arrived at an impasse.

“ I propose that the parties appoint a three-member arbitration panel, made up of one arbitrator appointed by the Trade Union Federation, a second by the government, and a third, a chairperson, appointed jointly by the agreement of the parties. Once the panel is constituted, hearings could be held in full glare of the public. The government agrees, without reservation or condition, that it would be bound by the decision of the panel. I urge our unions to consider and accept this proposal to bring closure to this unhappy situation,” he said.

Earlier in his speech, the prime minister described as “grave” the country’s current economic situation.

“I say this because the situation that confronts us is grave. While I have spoken about these facts repeatedly, there are some who choose to ignore our reality and create the illusion that ‘things’ are better than we say,” he noted.

Dr. Anthony, who is also the minister of finance, disclosed that St. Lucia’s economic growth in recent years has been “subdued”, falling to a low of about -0.6% in 2012.

He said to compound the country’s situation is the huge fiscal deficit left behind by the former government. He said this deficit stands at 10.7 percent of our gross domestic product (GDP).

The prime minister explained: “It began to get out of control when the Stephenson King government awarded a 14.5 percent increase to our public officers. We were forced to do what no government should do: borrow to meet the cost of salaries and other recurrent expenditure.

“By the end of March 2013, our debt will increase to 78 percent of our GDP. Today, for the first time in our fiscal history since independence in 1979, the Caribbean Development Bank has included us among a list of seven countries in the Caribbean with a high and unsustainable debt.

“This is the environment, this is the economy in which public sector unions have demanded that the government of Saint Lucia pay salary increases, initially of 16 percent, then 12 percent, later 9.5 percent and now six percent with stipulated conditions.

“As I have explained before, the returns from VAT are below expectations and will not cover the increase in expenditure. We have no option but to borrow this money,” he said.