Unions satisfied with pay increase package, tax cuts

THE RECENT pay increase package and tax reductions agreed to between the government and trade unions, seemed to be quite acceptable to the workers’ representatives.

The parties agreed to a seven percent wage increase spread over three years, along with an adjustment in the standard deduction for personal income tax which the union representatives said is something to work with though its not the “optimum”.

This seemed to be the general conclusion of the heads of the St Vincent and the Grenadines Teachers’ Union(SVGTU), the Police Welfare Association(PWA), and the Public Service Union(PSU), as expressed at a press conference on Tuesday, September 20.

EDMOND JACKSON, director general of finance and planning

This press conference was called following the conclusion of negotiations on Friday, September 16 between a Government-appointed team from the Ministry of Finance and representatives of the unions representing teachers and central government workers as well as the police.

“The team work was a very effective one and we were able to go into the negotiations in good faith, very comfortable and to represent all workers in St Vincent and the Grenadines,” president of the SVGTU, Oswald Robinson noted. He described that the team was well equipped, having done their research and that there were five principles that guided their deliberations.

The first was equity. “We wanted to ensure that all workers in St Vincent and the Grenadines benefit. Even though we were from our side here present, we were representing the public sector workers, we have to be our brother’s keepers and to look out for every worker,” Robinson said.

Also, there was employer’s affordability, “being able to afford what we are asking for”, and the principle of sustainability, Robinson added.

“You may ask for something now and then over a next year or two you realise you really out all the eggs in one basket and we didn’t really want that to happen,” he further explained.

The teachers union president also noted that they wanted to be reasonable in their “quest” and demonstrate respect.

“There was mutual respect right around the table and that, from my own vantage point, having been involved in several negotiations in the past, that one that we had last week Friday was very cordial. There was that listening ear on both sides and we were able to deliberate in a meaningful way and in good faith.”

He said their expectations were high.

“…That’s the nature of negotiations – some time you go a little higher, which is the best, but sometimes you have to go a little lower based on the aforementioned principles that I’ve outlined,” he explained.

“We didn’t want to go there and appear to be greedy and grab everything and then at the end of the day we miss the status of the economy, the performance of the Government.”

While they had reviewed growth projections from “reputable” organisations, he said those are just projections, and there should be an appreciation of reality.

The workers’ representatives proposed a pay increase of 9% spread over three years, but “when we really look at, for example we saw – whereas Government was making a lot of money from the VAT(Value Added Tax) in tourism and the hotel rooms guest houses, we realise that tourism has not really done well and you notice now the cruise season has not really picked up as yet.”

Robinson said looking at the whole picture they decided on seven percent increase in wages over three years.

“..We haven’t done too badly there because we sought to get 9% over three years but we finally went down to 7%.”

The pay package takes effect from 2023 with a 2.5% increase; followed by 2% in 2024 and 2.5% in 2025.

Additionally, on a general note for all workers, the personal income tax standard deduction will be $22,000, up from $20,000, which is targeted towards reducing the numbeggr of workers paying personal income tax. This is a “a very important achievement” Robinson said.

“The third area that we agreed which is a reduction of the top personal tax, marginal rate, to 28%, we move it from 30%. So we didn’t only look at those at the bottom but we look[ed] at those at the top, which is like a tax break,” he said.

According to the chairman of the Police Welfare Association (PWA), Corporal Germano Douglas, “If you ask me if this is enough, I would say no, but given the principles as explained sustainability, and the other of the finances, I would say this is a start for us.”

And, first vice president of the PSU, Gweneth Baptiste-Stoddard who was present at the negotiations, said “We went there with a mission to accomplish, we did. We didn’t get everything that we asked for but at least we got three.”

“So we basically settled for the seven percent but we [are] still working along with it until whenever the time comes for any more negotiation,” she said.

President of the PSU, Elroy Boucher commented that the team from the PSU did a very good job “…balancing the needs of the state versus the needs of workers and what we came away with, while it may not have been the optimum that we were looking at – because I still believe that 2022 there should have been something done because this was a very difficult year – but given the arguments that were put forward, the team agreed to forego 2022 and address 2023, 4 and 5.That is accepted,” he said.

“These tax reductions, when combined with the salary increases is going to put some monies back in workers’ hands,” Boucher said.

“Let’s say you are making around $22,000 a year, you’re not gonna be paying any tax, and from there on upwards there are great gains in what you would have gotten as tax returns,” he highlighted.

“Combine that with your salary increase and you will see that at least you will have something that you can work with,” he added as he commended the negotiating team for achieving this.