Trinidad PM: `We will have to borrow to pay salary increases’

(Trinidad Express) Unless it borrows vast sums of money, the Government will not be able to afford the salary increases being sought by the trade unions representing public servants.

So said Prime Minister Dr Keith Rowley. Speaking at a public meeting in Arima on Tuesday night, the Prime Minister said an increase of 4 percent2 per cent for each of the two collective bargaining periods- would cost $1.45 billion in back pay and an additional cost of $730 million more for public servants salaries for each succeeding year in perpetuity.

“The question is: Is that sustainable?”, he asked.

“Let’s get generous and let’s say we give 8 per cent- 4 percent plus 4 percent. That would cost a back pay of $3.6 billion and an additional annual cost of $1.4 billion. Do you see that money in the Treasury in Trinidad and Tobago at this time? Do you see the Minister of Finance in Trinidad and Tobago being able to find that money on a monthly basis to make sure that you (public servants) with jobs get paid at the end of the month? ” the Prime Minister said.

“We will have to borrow the money and if we do that on this scale, in this way, and the oil price and gas price change, we are leaping in the dark,” he said.

The Prime Minister said circumstances beyond this country’s control- (ie the war in Ukraine)- brought unusually high oil prices and some improvement in the gas price, resulting in the Government receiving a little more money than it budgeted for… It might be approximately $4 billion, which is the increase outside of what we budgeted for. But you would have seen that we went to Parliament last week and added to the 2022 budget, $3.1 billion (in additional expenditure) to be paid for out of that $4 billion (in additional revenue),” he said.

Having spent $3 billion of the $4 billion already. The war (in Ukraine) is grinding to a halt. It might drag on for a little while longer, we don’t know. Of the $4.2 billion, we spend $3.1 already. Let’s say we have $1 billion left, the backpay at 4 percent would be $1.45 billion. You know what that means? We have to go and borrow $450 million to pay for that back pay.” He said the Government may or may not do that, but “let it work itself out”.