So far for De­cem­ber 2025, the top news sto­ry for Guardian Me­dia Ltd has been the set­tle­ment of the 10 per cent wage in­crease for pub­lic sec­tor em­ploy­ees rep­re­sent­ed by the Pub­lic Ser­vices As­so­ci­a­tion and the en­su­ing dis­pute be­tween the PSA pres­i­dent, Fe­l­isha Thomas, and the Gov­ern­ment, rep­re­sent­ed by the chief per­son­nel of­fi­cer (CPO), Dr Dr Daryl Din­di­al over the Gov­ern­ment’s pro­pos­al that some of the re­sult­ing back­pay would com­prise non-cash pay­ments.

To demon­strate the im­por­tance of the pub­lic ser­vice back­pay sto­ry to us here at the T&T Guardian, here are the per­ti­nent page 1 head­lines:

* CPO gets death threat, Tues­day, De­cem­ber 2;

* Back­pay in parts, Wednes­day De­cem­ber 3;

* Back­pay bac­cha­nal, Thurs­day De­cem­ber 4;

* PSA stands firm, Fri­day De­cem­ber 5; and

* Ar­rears up­roar, Sun­day De­cem­ber 7

That means the T&T Guardian chose the pub­lic sec­tor set­tle­ment and the re­sult­ing dis­pute over how the back­pay should be paid as the lead sto­ry on five of the sev­en days from Mon­day to Sun­day.

The set­tle­ment arose be­cause dur­ing the 2025 gen­er­al elec­tions cam­paign, then Op­po­si­tion Leader, now Prime Min­is­ter Kam­la Per­sad-Bisses­sar, promised that, if her par­ty were elect­ed, it would agree to in­crease the salaries of em­ploy­ees rep­re­sent­ed by the PSA by no less than 10 per cent.

Last week, Ms Thomas and Dr Din­di­al signed the agree­ment grant­i­ng em­ploy­ees of the civ­il ser­vice, statu­to­ry au­thor­i­ties and the To­ba­go House of As­sem­bly the 10 per cent wage hike for the pe­ri­ods 2014 to 2016 and 2017 to 2019.

“The dis­tri­b­u­tion of the per­cent­age is one per cent in 2014, one per cent in 2015, one per cent in 2016, one per cent in 2017, one per cent in 2018, and then five per cent in 2019,” Din­di­al said, at the fi­nal wage set­tle­ment meet­ing, adding that when the al­lowances (in­clud­ing the con­sol­i­da­tion of the Cost of Liv­ing Al­lowances) are added to month­ly com­pen­sa­tion of the im­pact­ed em­ploy­ees, the net ef­fect would be about a 15 per cent in­crease.

The agree­ment is ex­pect­ed to cost the state ap­prox­i­mate­ly $3.8 bil­lion in back­pay and in­crease re­cur­rent ex­pen­di­ture by $420 mil­lion an­nu­al­ly.

The PSA and the CPO agree that a small por­tion of the back­pay to be paid in cash would be trans­ferred to the ac­counts of the af­fect­ed pub­lic sec­tor em­ploy­ees on or be­fore De­cem­ber 23.

The dis­agree­ment is whether the bal­ance of the back­pay would be in cash or non-cash pay­ments.

Ms Thomas main­tains that the man­date from the em­ploy­ees she rep­re­sents is for all of the bal­ance of the back­pay to be in cash. Min­is­ter of Fi­nance De­van­dranath Tan­coo made clear, ac­cord­ing to the re­port­ing of Akash Sama­roo, Guardian Me­dia’s lead ed­i­tor, pol­i­tics, that the PSA may need to en­ter­tain non-cash op­tions for the bal­ance of the back­pay.

In the sto­ry head­lined, ‘PSA stands firm: Thomas in­sists on­ly cash for back­pay pay­out; CPO, Min­is­ter mum on stand­off,’ the PSA pres­i­dent was asked by Akash to com­ment on Mr Tan­coo stat­ing that the trade union may need to en­ter­tain non-cash op­tions for the back­pay.

“My re­sponse re­mains the same. I was asked over the ta­ble, and I was very clear that my man­date for my mem­bers is cash. And that re­mains the same. I rep­re­sent a mem­ber­ship. And the man­date I car­ry is that of my mem­ber­ship,” she said.

Asked if a non-cash op­tion was ever dis­cussed be­tween her­self and the Fi­nance Min­is­ter di­rect­ly, Thomas re­spond­ed, “It was raised over the ta­ble with the CPO. And my re­sponse was my man­date for my mem­bers is cash.”

Up to now, it is clear that the PSA pres­i­dent is hold­ing fast to her po­si­tion that the on­ly op­tion for the pay­ment of the bal­ance of the back­pay in 2026 that she is pre­pared to ac­cept for the em­ploy­ees she rep­re­sents is CASH. For her to fa­cil­i­tate the non-cash op­tion, she will need to get a new man­date from her mem­bers.

Can Govt af­ford cash back­pay?

It seems to me that if the Min­istry of Fi­nance wants to of­fer non-cash op­tions to pub­lic ser­vants rep­re­sent­ed by the PSA, it must demon­strate that there can be no dis­pute about the Gov­ern­ment’s in­abil­i­ty to make cash pay­ments in 2026.

In my view, the on­ly way that the Gov­ern­ment can demon­strate that in­abil­i­ty is by hav­ing se­nior pub­lic ser­vants in the Min­istry of Fi­nance fur­nish the PSA ex­ec­u­tive with a de­tailed De­cem­ber 2025 cash flow re­port.

This would be an up­date of the in­for­ma­tion pro­vid­ed by Prime Min­is­ter Per­sad-Bisses­sar at the May 8 post-Cab­i­net news con­fer­ence.

At that news con­fer­ence, Mrs Per­sad-Bisses­sar said her ad­min­is­tra­tion in­her­it­ed an es­ti­mat­ed $4.42 bil­lion deficit for the month of May, from the pre­vi­ous ad­min­is­tra­tion, and her Gov­ern­ment pro­posed to fund the deficit by do­ing the fol­low­ing:

1) We pro­pose to draw down on the re­main­ing $2.7 bil­lion avail­able in the over­draft fa­cil­i­ty at the Cen­tral Bank;

2) We pro­pose to re­fi­nance a min­i­mum of 60 per cent of Trea­sury Bills due in May. This would free up about $647.7 mil­lion to ad­dress part of the deficit. While it is es­ti­mat­ed that about 60 per cent will be used, it is more prac­ti­cal to re­fi­nance the en­tire­ty of the $1.1 bil­lion in Trea­sury Bills to leave some breath­ing space, with the bal­ance in the over­draft.

3) With­draw $1.76 bil­lion (US$260 mil­lion) from the Her­itage and Sta­bil­i­sa­tion Fund (HSF);

4) Bor­row an ad­di­tion­al $1 bil­lion.

The on­ly way to sat­is­fy the PSA about the Gov­ern­ment’s in­abil­i­ty to re­solve the back­pay is­sue with cash is for the Gov­ern­ment to dis­close to the PSA, or pub­licly:

* How much cash is avail­able to the Gov­ern­ment in its over­draft with the Cen­tral Bank?

* How much Trea­sury Bills are com­ing due by the end of De­cem­ber 2025 and what per­cent­age of the ma­tur­ing Trea­sury Bills can rea­son­ably be re­fi­nanced to pro­vide cash to the Gov­ern­ment?

* Giv­en oil and nat­ur­al gas prices from Ju­ly 1 to De­cem­ber 31, what is the es­ti­mat­ed size of the with­draw­al that the Gov­ern­ment can make from the HSF?

* How much fis­cal space does the Gov­ern­ment have to is­sue bonds to de­liv­er on the cash op­tion for the 2026 back­pay? And, im­por­tant­ly, would Gov­ern­ment rais­ing funds from the lo­cal do­mes­tic cap­i­tal mar­ket to ful­fill the cash op­tion trig­ger a down­grade by the in­ter­na­tion­al rat­ing agen­cies?

If the Min­istry of Fi­nance es­tab­lish­es that it does not have, or can­not raise, the cash to pay the pub­lic ser­vants' back­pay, that is the end of the mat­ter.

The PNM’s $5B back­pay

In 2014 and 2015, the Peo­ple’s Part­ner­ship ad­min­is­tra­tion, un­der Prime Min­is­ter Kam­la Per­sad-Bisses­sar, set­tled pub­lic ser­vants’ col­lec­tive bar­gain­ing agree­ments with a 14 per cent wage hike.

De­spite these gen­er­ous set­tle­ment agree­ments, the Peo­ple’s Na­tion­al Move­ment (PNM) won the Sep­tem­ber 2015 gen­er­al elec­tions. It fell to for­mer min­is­ter of fi­nance, Colm Im­bert, to find the mon­ey to pay those pub­lic ser­vants $5 bil­lion in back­pay. That came at a time when the en­er­gy rev­enue ac­cru­ing to T&T was in de­cline.

In his 2017 bud­get pre­sen­ta­tion, de­liv­ered on Sep­tem­ber 30, 2016, Mr Im­bert re­mind­ed that the Gov­ern­ment had tak­en a num­ber of mea­sures to ad­dress T&T’s fis­cal prob­lem in April 2016, in­clud­ing in­creas­ing the price of fu­els, hik­ing cus­toms du­ties on lux­u­ry ve­hi­cles and cut­ting bud­getary al­lo­ca­tions to all min­istries and de­part­ments by 7.0 per cent, ex­cept for so­cial pro­grammes.

Mr Im­bert told Par­lia­ment:

“The Gov­ern­ment al­so an­nounced its in­ten­tion to pay 50 per cent of salary ar­rears owed in cash, to pub­lic of­fi­cers at the end of June 2016 with the bal­ance to be paid ei­ther in bonds at the end of Sep­tem­ber 2016 or in two fur­ther cash in­stal­ments in 2017.

“Be­cause of se­vere cash flow con­straints, we have since told the pub­lic sec­tor unions, in par­tic­u­lar the as­so­ci­a­tions that rep­re­sent the pro­tec­tive ser­vices, that the re­main­ing 50 per cent of the ar­rears will be paid in cash by the end of March 2017. As a re­spon­si­ble Gov­ern­ment, we will keep this dead­line, in the same way that we met our com­mit­ment for the first 50 per cent ear­li­er this year.”

* Does the cur­rent ad­min­is­tra­tion have a se­vere cash flow con­straint sim­i­lar to the PNM in 2016?

* Are pub­lic ser­vants pre­pared to wait un­til 2027 to get all of the bal­ance of their back­pay in cash?