Imbert: Wage increases could lead to job losses

Government simply cannot afford to pay any wage increases without affecting the levels of unemployment. In fact, over the past four months, government has been borrowing money from financial mechanisms to ensure that current employment levels remain the same.

So said Minister of Finance Colm Imbert at a virtual press conference on Wednesday, as he detailed the economic position of the country at the end of the first quarter of the fiscal year. Government had projected revenue of $13.8 billion for the first four months of fiscal 2021 (October to January). The actual revenue, however, was just over $12 billion, a shortfall of $1.8 billion or 13 per cent less than expected. He attributed this to the adverse effects of the covid19 pandemic.

Imbert said in order to pay salaries, wages and pensions to the approximately 90,000 workers in the public sector and to keep both the primary and parallel health sectors operational, Government had to borrow $3 billion from a loan facility and withdrew $2 billion from the Heritage Stabilisation Fund.

Imbert said with the persistent budget deficit and uncertainty as to when the global and local economies might recover, government simply could not afford significant wage increases.

While answering questions during the press conference, Imbert said any increase at all would have an effect on the Government’s ability to meet commitments to the public sector and make sure job security remains a priority.

He said that investments in several sectors, like the $500 million fund put together to support the agriculture sector and other funds allocated to housing projects would remain operational but the focus would be to keep people healthy and employed.

“Right now," he admitted, "we are struggling simply to pay recurrent expenditures (for example, salaries and wages), but we will continue to make that our primary objective.”