Painful but necessary move
January 12, 2013
When the PLP won power to govern Bermuda in 1998 there were approximately 5,000 Government workers; blue, white and quango employees of the people. When the PLP lost power in 2012 there were approximately 8,000 Government workers; blue, white and quango employees of the people. Around an additional 3,000 souls, or 60 percent, more people had been added to the cost of Government that had to be paid by the private sector.
The private sector job market has been devastated by the local recession and the general consensus, based upon the election result, is that it was mostly due to the PLP Government’s mismanagement of our money. The Government employees have hardly been impacted at all and many got pay rises while the private sector employees were desperately trying to hang onto their jobs and taking significant pay cuts to do so.
The reported overall cost of paying Government employees is now around 50 percent of all income received by Government. Conservatively, this equates to around $450 million a year. Those additional 3,000 employees of the people cost the private sector around $170 million per year. It is not hard to see how the PLP Government managed to increase our debt by around $1.3 billion over just eight years. It didn’t go on capital projects it went on employing another 3,000 people who are doing who knows what.
Although there are many exceptions, Government workers are not universally known as being highly productive but with a dwindling population the percentage of Government workers to private sector workers is growing. We cannot afford them all and based upon personal experience of regularly seeing Government employees talking and texting on their private cell phones, surfing the web and playing computer games it is very clear that in addition to the thousands of Bermudians in the private sector, there are many Government workers who are also underemployed, but they are receiving a handsome salary or wage and wonderful benefits while doing little or nothing.
Again from personal experience there are Government workers who are either under-qualified for or don’t have sufficient experience for the positions they hold. This is a major reason why there are so many consultants and contractors employed by Government and in some cases it is those consultants and contractors who are effectively controlling what should be works managed by highly paid Government workers.
The OBA Government has a frightening task ahead of them. Although they made an election promise to only reduce the number of Government workers by attrition, this may not be fast enough to get us out of the debt hole we are in and avoid bankruptcy. I suggest the following:
1. Mandate every permanent secretary, department head, manager and supervisor to cut their operating costs by ten percent every year in real terms for the next three years at least
2. Freeze pay at current levels for three years. Yes, the workers will see a reduction in their buying power, just like the rest of us, but they will have jobs.
3. Offer every Government employee over 55, where there is a competent subordinate to assume that role, early retirement terms
4. Identify under-employed workers and offer part-time terms or reduce their working week to four or three days on proportional pay
5. Identify Government services that cost the people more than they benefit the people and modify or eliminate them and offer favourable severance terms or redeployment terms to employees
6. Identify services that can be undertaken by the private sector more efficiently at less real cost to the people and privatise them, initially with all affected Government workers moving to the private sector on guaranteed two year contracts on comparable terms and conditions. Thereafter they retain their jobs based upon performance and attitude
7. Remove the job-for-life protection enjoyed by Government workers. All Government positions, blue, white and quango should be advertised every three years with the best person getting the job
8. Eliminate annual job reviews by supervisors. They are a joke as few supervisors will provide a poor review that would in return reflect badly on them as leaders
9. Postpone capital projects that are not really needed. Renovate using local labour rather than build new as all new-build materials have to be imported. Save foreign currency as a reserve
10. Make it illegal to strike or withdraw labour for three years while we attempt to resolve the financial mess we are in. All grievances to be heard and resolved by independent mediation.
These may appear harsh proposals but we can no longer afford the massive Government built up by the PLP. As the only alternative is to cut the number of Government workers by at least 20% across the board, I would hope that a part loaf of bread is seen as better than none by the Government employees who will still be paid by a currently dwindling number of private sector taxpayers and no doubt from money borrowed from overseas until we can reduce costs to match our income. Share the pain so we can grow again
NO PAIN NO GAIN