Perhaps the major sticking point in the preparation of the proposed supplementary estimates for the current fiscal year will be the projections made for the payment of outstanding wages and benefits to various arms of the public service.

The Bruce Golding Administration has clearly stated that it is not in a position to pay public sector workers the agreed salary increases due to them under the current signed Memorandum of Understanding covering the period 2008-2010.

Neither is it in a position to pay teachers the outstanding back pay that it still owes them. And it has boxed itself into a corner with regards to the reclassification issue with the nurses.

By taking a unilateral decision to renege on making a signed commitment to the Government agreed and negotiated salary increases, having cited an inability to pay, while at the same time stoutly maintaining the unswerving Constitutional commitment of the Government to repay its debtors in full and on time, there seems to be a disparity in the sanctity of the two types of contracts.

The actions by the Government with regard to the payment of wages could well be defined as a type of 'selective distressed default' in the absence of any law being passed to nullify the outstanding contractual arrangements.

The issue has the attention of international observers such as the International Labour Organisation.

As long as the administration takes a unilateral 'take it or leave it' approach vis-á-vis one set of binding contractual obligations, while holding that it would 'never renege on paying our debt obligations', there will always be a cloud hanging over the validity of the assumptions underlying the fiscal expenditure and revenue estimates.

For example, in the same way in which several Cabinet members including the prime minister, the minister of finance and the attorney general signed the current MOU with the public sector workers, what is to make the teachers feel any more assured when they receive a 'comfort letter' stating that they will receive their back pay over the next three years?

In the case of the nurses, they have cleverly left the issue of their salaries increases in abeyance and have been involved in protracted negotiations with the Government re a reclassification exercise.

Problems will arise, however, if and when the Government decides to reclassify various grades of nurses, without extending the reclassification exercise to cover the entire health sector.

Selective reclassification

A selective reclassification will create significant anomalies between certain categories of nurses and other health sector practitioners such as doctors, as well as the impact that the reclassification will have on the relativity between nurses and other groups of public sector workers.

And after the reclassification issue is resolved, the nurses will then expect to receive their retroactive salaries increase at the new levels in line with that already received by other categories of public sector workers.

In this regard, the nurses will have paid particular attention to the front-loading option exercised by the government in its negotiations with the police.

By not reaching closure on these outstanding salary issues, the Government runs the risk of labour unrest, especially when the severity of the contraction in government expenditure gets reflected in the expected rise in prices across the board.

The other salary-related issue to be monitored in the upcoming supplementary estimates of expenditure is the amounts set aside in the ministry of finance allocations to cover the expected redundancies in the public sector as a result of layoffs, given proposed closures and/or amalgamation of various public sector agencies.

Unrealistic contingency allocations by the ministry of finance could affect the credibility of the supplementary estimates of expenditure.

Hopefully, both the administration and the International Monetary Fund will appreciate the importance of the GOJ developing a comprehensive wages policy and that this will be reflected in the soon-to-be-released Jamaican medium-term macro-economic programme.

reneee.shirley@gleanerjm.com