Should the government borrow money to pay public servants more or should it tax the rest of the country to pay this particular group?

Govt should say no to public servants

thenassauguardian editorial





How much of the public purse should public servants be entitled to? Compensation to these workers is already around 55 to 60 percent of the national budget. Now the president of the Bahamas Public Services Union John Pinder wants the government to lift the freeze it placed on public service promotions and increments, arguing that inflation is overwhelming the resources of public servants.

This comes nearly a year after Prime Minister Hubert Ingraham announced the freeze in the 2010/2011 budget in May 2010.

Ingraham said public service promotions would be frozen, except in special cases, and that public service employment would also be frozen except in extenuating circumstances. At the time Ingraham said the government was making these adjustments to avoid job losses in the public service.

Pinder is right that inflation is a growing problem. The price of oil per barrel topped $113 yesterday. The entire country is bearing the burden of the increased cost of goods and services.

The solution to the problem, however, faced by public servants can’t simply be for the government to give them more compensation. Where would this money come from?

As we mentioned yesterday regarding the hundreds of millions of dollars being spent on infrastructure work by the government, this money is borrowed. And it is borrowed at a time when the country’s debt to GDP ratio is rising. According to figures in the 2010/2011 mid-year budget document, that ratio has risen from 41 percent in 2006 to 56 percent in 2010.

Should the government borrow money to pay public servants more or should it tax the rest of the country to pay this particular group? The first move would be silly and the second unfair.

In the short term, Bahamians will have to conserve during this period of higher prices. In the long term, a policy is needed to introduce alternative energy sources that provide energy to the country at a lower cost than via the burning of fossil fuels.

It is wiser for Bahamians to save and spend wisely as opposed to the government borrowing money to pacify its employees.

The unions know that this is election time and at election time governments borrow and spend generously, seeking to gain votes. Therefore, the unions have started making demands on the treasury.

The cost of satisfying everyone in the short term will be risking the financial well being of the country in the long term.

4/28/2011

thenassauguardian editorial

Bahamas Blog International