Public servants have not gotten their back pay for the period 2011 to 2014. They received 50 percent and will get the balance in bonds in 2017.
But Finance Minister Colm Imbert sent ripples through the public service by announcing there will be a freeze on public servants’ salaries for the period 2017 to 2020.
Imbert made the disclosure during a panel discussion held as part of International Monetary Fund (IMF) forum at the Hyatt, Port of Spain, on Wednesday.
This announcement can have a ripple effect across the board for all State enterprises. Although the private sector is not bound by this decision, many companies will cash on and seek to do similar things over the next three years.
This announcement is expected to be met with some resistance by trade unions, in particular, the Public Services Association (PSA) whose President Watson Duke has been demanding all the back pay for his members.
The IMF forum was opened by Prime Minister Dr Keith Rowley. In attendance was Prime Minister of Jamaica, Andrew Holness.
In his address to the gathering, Rowley outlined Trinidad and Tobago’s economic position, which, he said, has found itself facing subdued growth and increasing fiscal imbalances.
He said: “The overriding reason has been the decline in oil and gas production in the face of the maturing of our oil fields. Most recently, however, the dramatic slump in oil and gas prices has affected activity in the energy sector directly and has had major spillover effects on the Government expenditures and the non-energy sector activity.
“With the consequent expansion in fiscal imbalances, the Government now faces the twin task of fiscal consolidation and returning the economy to a faster growth path. Moreover, this time our growth strategy must involve an expansion in non-energy related activities, since, given the structural changes taking place in global energy markets, the outlook for our energy sector is, to say the least, more worrisome.
“In its five-year fiscal consolidation plan, the Government has initiated a comprehensive reform of the non-energy tax regime, even while it is reviewing the energy tax system to provide greater incentives for oil and gas exploration, increased secondary recovery and the promotion of renewable energy sources.
“On the expenditure side, the Government is focusing on measures to reduce corruption and wasteful spending, cutting subsidies and transfers; and enhancing the efficiency of spending on social programmes, through better targeting. These measures will all make space for higher growth-enhancing capital expenditures.
“Our diversification strategy highlights the development of a number of sectors in which we believe we have a comparative advantage. These include tourism, merchant marine, arts and leisure, manufacturing and some niche agricultural processing activities, involving cocoa and coconuts,” Rowley added.