Financial analyst wants Williams to comment on wage bill
Published:Tuesday | March 25, 2025 | 12:11 AMEdmond Campbell/Senior Staff Reporter
As the 2025-2026 Budget Debate comes to a close today, one financial analyst wants Finance and the Public Service Minister Fayval Williams to comment on two critical issues, including the current wage bill.
Financial analyst Dr Adrian Stokes said the public sector wage bill is currently a big problem and will be even a bigger issue going into the next financial year.
He pointed out that the wage bill is expected to take up about 50 per cent of tax revenues, leaving only 50 cents of every tax dollar to deal with other critical public expenditure.
“There is no mechanism to impose discipline or moderation on future wage increases. Before, we had a fiscal anchor of nine per cent of gross domestic product (GDP). Now there’s no formula to determine what is a reasonable basis to determine wage increases going forward,” Stokes said.
Earlier this month, Fiscal Commissioner Courtney Williams suggested that the Government reintroduce what he describes as a “fiscal rule” on wages and salaries in order to “hold wages and salaries expenditure in check”.
His comments came in the first Independent Fiscal Commission’s Economic & Fiscal Assessment Report (EFAR) to Parliament. The report on the Government’s fiscal policy paper outlined that compensation of government employees is programmed at nearly $496 billion for financial year 2025-2026, comprising new rates of pay for several groups as well as retroactive payments due to medical consultants and the judiciary.
Williams also highlighted in his report that wages and salaries are projected to rise by $38.7 billion to $463.4 billion compared to the $424.7 billion estimated to be spent in fiscal year 2024-2025.
He added that wages and salaries as a share of GDP are projected to end 2025-2026 at 13.3 per cent and remain unchanged through the medium term.
In her opening Budget Debate presentation, Williams said while the administration would no longer pursue a cap on wages, there were controls on the Budget.
She signalled that the focus in the public sector has to shift to pay for performance and improvement in productivity.
Stokes said the other big issue the finance minister needs to discuss is how Jamaica should position itself given multiple bilateral trade wars breaking out among some of the country’s major trading partners.
“Is Jamaica at risk of being a pawn that will be sacrificed or do we see opportunities to position the country as a global hub to assemble critical manufacturing going to the North American market,” Stokes questioned.