The wage bill must be contained – IMF Mission Chief

Western Bureau:

While not going into details because of ongoing wage negotiations between public-sector groups and the Jamaican Government, Jan Kees Martijn, the International Monetary Fund's (IMF) mission chief, says containing the nation's wage bill will be key to staying on the right fiscal path.

"Under the programme, we have an agreement on what happens to the overall budget and we also have agreed that containing the wage bill is a necessary element of staying on the fiscal path," Martijn stated at a press briefing following the 3rd annual consultation luncheon between the Montego Bay Chamber of Commerce and Industry and the IMF earlier this week.

"All I can say is that I understand from the minister (finance) that he is committed on maintaining the fiscal targets, he is committed on putting the wage cost on a sustainable path, and he is committed to modernising the public sector to support a sustainable budget and a sustainable wage bill," added Martijn.

In a press release dated February 25, 2015 and posted on the IMF website, the Fund stated that, "The authorities intend to maintain the wage bill in line with the budget allocation, and they remain committed to reduce the wage bill to nine per cent of GDP by 2016/17."

No wage freeze plans

In a deal covered by the current IMF agreement, a number of public-sector groups signed a Heads of Agreement with Government to enact a wage restraint covering the contract period 2012-2015.

However, in what appears to be a departure from the position outlined by Martijn, Horace Dalley, the minister without portfolio in the Ministry of Finance and Planning and the point man for the Portia Simpson Miller led administration in the much publicised wage negotiation, recently stated that the Cabinet had no intention of seeking another three-year wage freeze.