Finance Minister, Fayval Williams, is suggesting that he country must return to capping the public sector wage bill to a percentage of Gross Domestic Product, GDP.
During a heads of agreement signing with the Jamaica Confederation of Trade Unions on Thursday, Minister Williams called for stakeholders to come to the table to negotiate the recreation of that fiscal rule.
She says failure to bring public sector wages within a sustainable band could potentially result in severe consequences down the road for the workers themselves.
Mahiri Stewart tells us more.
The call for public sector wages to be restricted to a specific percentage of GDP is not a new one.
Fiscal Commissioner, Courtney Williams, and former Chairman of the Economic Programme Oversight Committee, EPOC, Keith Duncan have both called for the fiscal rule to be placed back on the books.
Finance Minister, Fayval Williams, while outlining the current fiscal realities, says the conversation can no longer be avoided.
The Government’s wage bill is budgeted at $555 billion this financial year, or 14.4 percent of GDP.
That’s just over half of everything the state expects to collect in revenue and grants.
The nine percent of GDP cap that once anchored the wage bill was repealed in 2023, and no replacement rule has been put in place.
The Minister warns that without a proper fiscal rule surrounding wages, the public sector workers will themselves be harmed.
Minister Williams argues that a proper wage anchor can be negotiated in the best interest of the country.
