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Monday, July 7, 2025

Unions to get 0-0-0 at start

by

20161103

Less than a month be­fore the Lo­cal Gov­ern­ment elec­tions, Min­is­ter of Fi­nance Colm Im­bert dropped a news bomb­shell at a fo­rum co-host­ed by the In­ter­na­tion­al Mon­e­tary Fund (IMF) yes­ter­day, say­ing the Gov­ern­ment would of­fer trade unions rep­re­sent­ing pub­lic ser­vants and em­ploy­ees of State en­ter­pris­es no wage in­creas­es for the pe­ri­od 2017 to 2020 as part of the ad­min­is­tra­tion's at­tempt to curb ex­pen­di­ture.

And the min­is­ter, in what he seemed to think was a joke, said the Gov­ern­ment might raise fu­el prices by an­oth­er 15 per cent in April 2017 be­cause he had raised the price of the com­mod­i­ty by 15 per cent on three oc­ca­sions in one year "and they have not ri­ot­ed yet."

Im­bert was part of a pan­el on glob­al and re­gion­al chal­lenges that in­clud­ed Ja­maican Prime Min­is­ter An­drew Hol­ness and Caribbean De­vel­op­ment Bank pres­i­dent War­ren Smith.

The con­fer­ence al­so at­tract­ed St Lu­cian Prime Min­is­ter Allen Chas­tenet, tech­nocrats from the IMF, the CDB and lo­cal fi­nan­cial in­sti­tu­tions

Speak­ing about the need for the coun­try to re­duce the gap be­tween rev­enue and ex­pen­di­ture, Im­bert out­lined the steps Gov­ern­ment had tak­en to re­duce trans­fers and sub­si­dies by in­creas­ing the price of fu­el and propos­ing re­duc­tions to the sub­ven­tion for GATE.

He said: "Our on­ly way for­ward is fis­cal con­sol­i­da­tion, re­duc­ing sub­si­dies and trans­fers, try­ing to cut back on our ex­pen­di­ture on goods and ser­vices and wage re­straint.

"I have al­ready told the trade unions that from 2017 to 2020 our of­fer will be 0-0-0. I have fea­tured in a num­ber of plac­ards from trade union mem­bers march­ing around the Prime Min­is­ter's of­fice say­ing 'Im­bert must go.' But that's just how it is."

The T&T Guardian first re­port­ed the min­is­ter's state­ment about of­fer­ing 0-0-0 as a wage freeze on its web­site and this was copied on so­cial me­dia web­sites by oth­er news or­gan­i­sa­tions.

Two hours af­ter the sto­ry was post­ed, Im­bert called the T&T Guardian to say the in­ter­pre­ta­tion that 0-0-0 meant a wage freeze was wrong "be­cause 0-0-0 is the start­ing point of the Gov­ern­ment's ne­go­ti­a­tions with the trade unions and not the end."

He sub­se­quent­ly called a press con­fer­ence last evening to clear up the is­sue.

Dur­ing the fo­rum, Im­bert said the pre­vi­ous Peo­ple's Part­ner­ship (PP) ad­min­is­tra­tion in­creased pub­lic ex­pen­di­ture from $45 bil­lion to $63 bil­lion or 40 per cent be­tween 2010 and 2015.

He said the cur­rent ad­min­is­tra­tion came in­to Gov­ern­ment in 2015 faced with a num­ber of wage in­creas­es that were grant­ed by the PP, which to­talled as much as 20 per cent when salary in­creas­es were added to al­lowances.

Im­bert added: "We were hand­ed a gift–I'm try­ing not to be too po­lit­i­cal here–of some­where in the vicin­i­ty of US$1 bil­lion ($6.5 bil­lion) in ar­rears or back pay that we had to pay in 2016...

"From a po­lit­i­cal per­spec­tive, we had to go and dis­cuss it with the trade unions and tell them we just can't pay all of this back pay in 2016 and we will have to do it in stages. By and large, the unions were un­der­stand­ing of what was hap­pen­ing in the econ­o­my."

Fu­el sub­si­dies to go too

On fu­el prices, Im­bert said the Gov­ern­ment pro­posed to elim­i­nate the sub­si­dies on all pe­tro­le­um prod­ucts over a three-year pe­ri­od.

Fur­ther ad­dress­ing the is­sue of cut­ting back on trans­fers and sub­si­dies, he said the price of elec­tric­i­ty in T&T was the low­est in the Caribbean and one-sixth the cost in Ja­maica. Im­bert said he "rather sus­pects" that wa­ter costs five to ten times more in Caribbean coun­tries.

"So we have sub­sidised wa­ter, sub­sidised elec­tric­i­ty, sub­sidised ed­u­ca­tion and sub­sidised pub­lic trans­porta­tion. And all of these things we now have to pull back on. We have no choice," he ex­plained.

Re­fer­ring to a state­ment made ear­li­er by Hol­ness that Ja­maica could no longer de­pend on debt to stim­u­late growth in the econ­o­my, Im­bert said T&T could not re­ly on bor­row­ing in the fu­ture to close the fis­cal gap.

In the 2008 fis­cal year, Im­bert said T&T en­joyed a very low debt to GDP ra­tio of 35 per cent and a fis­cal sur­plus of al­most US$2 bil­lion.

Im­bert said: "Our debt to GDP ra­tio is now 60 per cent and we have set our­selves a tar­get of 65 per cent but if we go be­yond that we be­lieve we will run in­to dif­fi­cul­ty.

"So we are al­most at the point where it is dif­fi­cult for us to bor­row any more for bud­getary sup­port and cap­i­tal de­vel­op­ment and there­fore the on­ly so­lu­tion is growth."

Im­bert said T&T had se­ri­ous fis­cal con­sol­i­da­tion to do be­cause he ex­pect­ed to re­port a fis­cal deficit of five per cent of GDP for the 2017 fis­cal year.

In or­der to achieve that five per cent deficit, the Gov­ern­ment would have to cre­ate a num­ber of one-off sources of rev­enue by sell­ing shares in state en­ter­pris­es, en­gag­ing in pri­vati­sa­tion, among oth­er sources, he added.

The min­is­ter said tap­ping one-off sources of rev­enue was done in 2016 and would be re­peat­ed dur­ing the cur­rent 2017 fis­cal year.

"By 2018, we may have noth­ing left to sell," Im­bert added.


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