Balance sheet balancing act

Today, teachers will “rest and reflect” to protest the salary increases that the Government is offering, and there are huge sums in the balance.

Public-sector trade unions continue to vigorously resist the proposed four per cent increase offered by the state.

Only the Amalgamated Workers Union accepted it, earning rebukes from National Trade Union Centre (Natuc) president James Lambert and others.

In a show of their displeasure, teachers are stalling the effective start of school that’s likely to shut down public schools for the day.

On Friday, at the Spotlight on the Economy discussion, the Finance Minister Colm Imbert cheerfully pointed to signals of recovery, chiefly buoyed by rising energy prices that have risen sharply this year, reaching levels not seen since 2008.

The surge in revenue won’t solve the economic challenges that the country faces.

Trinidad and Tobago is still carrying significant liabilities that aren’t helped by the inefficient collection of taxes and a fuel subsidy that costs the country an average of $200 million a year, a sum that rises and falls with the same volatility in oil and gas pricing that’s driving improvements in export revenue.

That fragile reality led deputy governor of the Central Bank Dr Dorian Noel to urge the Government to set aside money from the current oil and gas windfall as a buffer against future revenue shocks.

By May, the additional revenue was estimated at $3 billion.

In that context, public wage talks are a critical factor in medium-term budget planning, but the discussions are proceeding with a wide divergence in expectations.

The Government’s four-per-cent offer, including back pay, represents a financial commitment of $4.6 billion. The PSA is insisting on 19 per cent, which will put a wage bill of $30 billion on the Government’s shaky balance sheet.

One consequence of the Government’s insistence on a single pay adjustment across all sectors of the public service is the inference that all public servants have the same job and pay-adjustment experience.

A coalition of trade unions, JTUM, Natuc and FITUN, issued a press release supporting teachers and condemning the Chief Personnel Officer for his disregard of established negotiation procedure.

The state’s approach is only likely to lead to continued protests, which will bring their own costs.

The Government must do a better job of explaining its fiscal policy to public servants.

It cannot offer $200 million to frontline health workers – who have unquestionably earned it – boast of increased oil and gas revenue, then turn to its own employees with its pockets turned inside-out, acting broke.

Clearly, the PSA’s 19 per cent is unsustainable, but in refusing to negotiate on any basis, the state is courting the consequences of insulting the staff who ensure its effectiveness in governance.