Cepep cop out

THE GOVERNMENT’S decision to increase Cepep and URP wages without any further examination of the future structure of these make-work programmes is a disappointing turn in the context of agitation by the business community over labour shortages, productivity problems, as well as serious questions over the functioning of these programmes in recent months.

We cannot begrudge Cepep and URP workers the chance to earn an extra buck. The 15 per cent hike in wages, when viewed alongside the decision to grant daily paid workers access to the public service pension as well as the increase in the minimum wage from $15 to $17.50, will affect the lowest income earners and, therefore, those among the most vulnerable in our society. This is a good thing.

But if you give a man a fish, he eats for a day. If you teach a man to fish, he eats for a lifetime. What has happened to the idea of teaching a man to fish? What has happened to longstanding plans to bolster the productivity of programmes like Cepep by giving workers transferable skills that would allow them to be absorbed by the private sector?

In his 154-page presentation, Finance Minister Colm Imbert devoted a mere two sentences each to Cepep and URP. Little explanation was given for the quantum, timing, and necessity for the increase. While Cepep and URP have in the past been earmarked for use in transforming the agriculture sector, there was no mention of whether this policy direction would be pursued, even as the removal of all taxes from the agriculture sector was announced.

There was also little analysis of how much additional strain this measure might place on the treasury. This, at a time when media reports over the last few months have detailed how intelligence agencies have flagged certain Cepep contracts as being awarded to perceived criminal elements. Instead of reducing spending as the system is reviewed, Government has done the opposite, substantially raising the stakes in this public procurement game. That sends a bad signal.

The increase in wages for make-work programmes contrasts sharply with the maintaining of the status quo in relation to the social safety net. There was little of special interest to the 194,854 individuals who receive food cards, disability grants, public assistance grants, and senior citizens pensions. Many who might have looked for incremental increases would have been disappointed. If the policy reason behind the Cepep increase was to address poverty, then the measure does not gel well with the lack of progress in this regard.

Though the quantum of expenditure was not spelled out, it is safe to assume the wage increase will boost spending power for certain segments of the population just before Christmas. By the absence of any kind of explanation in the budget presentation, Government has left itself vulnerable to the now widespread criticism that it has simply sought to include sweeteners without cultivating needed synergies to restructure the labour market.