Insane' 40% Growth In Govt's Wage Bill

Insane' 40% Growth In Govt's Wage Bill

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The 40 percent growth in the government's wage bill over the past seven fiscal years to 2018-2019 was yesterday branded "insane" and "criminal" by private sector leaders.

KP Turnquest, pictured, Deputy Prime Minister, said the $226m increase in civil service salaries since the 2011-2012 fiscal year was one factor that had created "a significant fiscal gap" for the upcoming budget year without the corrective action of a Value-Added Tax (VAT) rate increase to 12 percent.

"In light of the fact that the Government wage bill has grown by $226m, or 40 percent, between 2011-2012 and 2018-2019 in an economy that has posted little if any real growth, [there is] the necessity of exercising restraint in respect of the overall wage bill and headcount," Mr Turnquest told the House of Assembly yesterday.

Budget figures show the Government attempting to hold public sector wages, described as "personal emoluments", relatively flat year-over-year at $738.476 million for 2018-2019 - a slight decline on the prior year's $741.759 million.

However, this still represents 28 per cent of the Government's total recurrent spending for the next fiscal year. And the salary bill is expected to grow further over the next two years, rising to $757.478 million in 2019-2020 and $790.941 million in 2020-2021.

Mr Tunquest's revelations were seized on private sector leaders as illustrating just why Bahamian consumers and businesses are being forced to pay for the fiscal profligacy of past governments through a major increase in the VAT rate.

"That's just insane," Michael Maura, the Bahamas Chamber of Commerce's chairman, said of the wage bill's explosive growth since the last year of the final Ingraham administration.

Robert Myers, the Organisation for Responsible Governance's (ORG) principal, added: "That's just criminal and asinine. It's criminal. We've already paid the price, and are going to continue to pay the price. We've got to roll up our sleeves, do the hard work and get this thing going in the right direction."

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