Government has ignored the outcry of two major public unions and has implemented the reclassification exercise in full.{{more}}

As he laid the estimates of the $750,904,091 budget for 2009 in Parliament on Wednesday, November 26th, Prime Minister and Minister of Finance Dr Ralph Gonsalves announced that the payments for phase two of the reclassification exercise will appear in November pay packets of public servants whose positions have been green circled.

The payments, which will be retroactive to July, 2008, will cost the government some $4.15 million. Payments arising from the determination of the appeals’ committee and the Joint Evaluation Technical Team (JETT) will also be paid retroactively to January 1, 2007 at a cost of $4 million.

Furthermore, government will grant salary increases amounting to 12 per cent over the next three years; three per cent in 2009, five per cent in 2010 and four percent in 2011.

Dr Gonsalves said that even though the teachers and the public service unions did not come to the negotiation table to discuss salaries, as a result of their reclassification protest actions, “the government recognizes that given the current global situation, public sector workers would expect to receive some upward adjustment in their wages.”

“This increase taken together with the implementation of the R2 salary bands adds up to more than a modest enhancement in salaries for public servants in 2009,” he said.

The wages and salary expenditure for 2009 has been estimated to increase to $228.50 million or an increase of 4.7 per cent or $10.35 million over 2008. This will be part of the overall estimated recurrent expenditure for 2009 of $553,597,796, which represents an increase of seven per cent or $35,995,846 over the approved recurrent expenditure estimates for this year.

This is made up of current expenditure of $482,278,985 and debt servicing of $71,318,811.

While the estimate for current expenditure is pointing upward from 2008, the capital budget is estimated to be down by 17.7 per cent or $42.46 million from the 2008 budgeted amount to $197,306,295.

The Prime Minister said that this is resulting from “a more targeted and realistic capital programme which is aimed at stimulating economic activity within the productive sectors and through the provision of supporting infrastructure.”

Some 35.4 million has been allocated for roads and airport infrastructure.

On the income side of things, “the trend of the increasing dominance of tax revenue as the main source of government’s inflows” is expected to continue in 2009, Dr Gonsalves said.

The current revenue for the fiscal year 2009 is estimated at 484,574,780, which represents an increase of 8.2 per cent or $36.76 million over the approved revenue estimates for 2008.

Tax revenue will account for 92.4 per cent of government’s collections in 2009, which is up from 90.3 per cent in 2008.

Revenue from non-tax sources is also expected to increase by 19.1 per cent in 2009.

During his address on the estimates, Opposition Leader Arnhim Eustace called on the trade unions to take note of the way that the Prime Minister has gone ahead and instituted government’s proposals.

He called on the unions to respond “very clearly” to what the Prime Minister said.

Eustace, as he has done on several occasions, warned that attention has to be paid to the economic situation that is affecting the world, stressing that the size of a budget isn’t important.

What is important, in his estimation, is to ensure that the budget fits into the circumstances that the nation finds itself in.

He said that he was wary that tourism numbers, which show a 36 per cent decrease in arrivals for this year, are down from what was a good 2007 for the same period.

Eustace suggested that the situation with tourism is an indication of the type of challenges the nation will face next year and the coming years. (KJ)