Richards: Govt is ‘burying the hard realities’
A proposed wage agreement between Government and civil servants has triggered calls for detail, with the Opposition branding it an eleventh-hour “pre-election exercise”.
The offer by Premier and Finance Minister Paula Cox was reportedly made as Government and unions met to discuss a new collective bargaining agreement.
Government workers would be compensated for an eight percent chop in their wages, by a freeze being imposed on all payments into their pension scheme.
A Ministry of Finance spokeswoman explained that, if the agreement were to be implemented: “The Public Service Superannuation Fund would be frozen for one year no benefits would accrue during this year and no contributions would be made by the employer (Government) or the employees.”
She added that the Fund would be given “a comprehensive review” over the course of that year.
But the notion that Government workers might take an eight-percent cut in pay in return prompted one economist to ask: “When is a pay cut not a pay cut?”
Following initial meetings, BIU President Chris Furbert also told
The Royal Gazette that Ms Cox had suggested reducing her own salary.
Last night, Opposition Leader Craig Cannonier urged the Premier to go ahead with the cut, saying that after a litany of concessions by workers, Government needed to show solidarity.
Mr Cannonier said Government had “repeatedly passed on opportunities to lead by example, and cut their own pay”, and called for a ten percent pay cut for Ministers.
It remained unclear whether the proposed eight percent pay cut for Government workers would be applied across the board, or only imposed on higher-wage civil servants.
Shadow Finance Minister Bob Richards called the eight percent trade an initiative “driven solely by the Government’s bad fiscal situation”.
“It is a desperate last-minute political exercise that helps the Finance Minister shuffle numbers to make her Budget look better than it is,” Mr Richards said.
“To ask for a pay cut in exchange for a pass on pension payments serves no real purpose other than to bury the hard realities of the Minister’s mishandling of the public purse.”
Mr Richards conceded that answers would have to wait until unions responded to the proposal.
Both the Bermuda Industrial Union (BIU) and Bermuda Public Services Union (BPSU) are expected to mull the proposal this week, with Mr Furbert saying a meeting was expected for this Wednesday at noon.
Mr Richards called the Finance Minister “addicted to debt”, and said the eight percent proposal would shift the onus onto taxpayers.
“This time, instead of financing her Cabinet’s overspending by further increasing Government debt, she is effectively borrowing from the civil servants pension fund, formally known as the Public Service Superannuation Fund, to finance it and to make her budget deficit look smaller,” Mr Richards said.
He cited the Public Service Superannuation Act.
“Section 7 (6) states the following: ‘If at any time the Fund is insufficient to meet the payments chargeable against it the deficiency shall be made up out of the Consolidated Fund’,” Mr Richards said.
“In effect, if the contribution by civil service employees is not made now, any deficiencies will have to be made up by taxpayers later. She is pushing the problem down the road for taxpayers to deal with later.”
Noting that the proposal appeared to cover just one year, he also asked: “What about next year? The problem will surely recur.”
For One Bermuda Alliance head Craig Cannonier, MS Cox’s offer to unions of a possible cut in her own pay was an overdue step.
Calling for “shared sacrifice”, he said: “The OBA is at a loss to understand this failure of leadership. The people of Bermuda would be much more ready to work with Government if the Premier and her ministers demonstrated the spirit of shared sacrifice.
“A ten percent pay cut for ministers would be a convincing step to assure Bermudians their Government stands with them in tough times.”
Mr Cannonier said the Premier had previously dismissed the idea of a ten percent cut.
“As her Government continues to come after taxpayer money to shore up its financial position, people should demand that she and her Ministers step to the wicket to shoulder at least some of the burden they’ve created,” he said.
“This is a great opportunity for the Premier and her colleagues to show they stand as one with working Bermudians. They should do it.”