The energy windfall is temporary | Local company

UNLESS it borrows huge sums of money, the government will not be able to afford the wage increases demanded by the unions representing public servants.

This was stated by the Prime Minister, Dr Keith Rowley, during a public meeting in Arima on Tuesday evening.

He said a four per cent raise – two per cent for each of the two collective bargaining periods – would cost $1.45 billion in back wages and an additional $730 million in additional costs for workers’ wages. civil servants for each subsequent year in perpetuity.

“The question is: is it sustainable? He asked.

“Let’s be generous and say we give eight percent — four percent plus four percent. This would cost a backlog 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 right now? Do you see the finance minister of Trinidad and Tobago being able to come up with that money on a monthly basis to ensure that you (civil servants) with jobs are paid at the end of the month? said the prime minister.

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

Referring to the war in Ukraine, the Prime Minister said that circumstances beyond the control of that country “resulted in abnormally high oil prices and some improvement in the price of gas, which allowed the government to receive a little bit more money than expected…it could be around $4 billion which is the increase outside of what we budgeted but you would have seen we went to Parliament last week and added to the 2022 budget, $3.1 billion (additional spending) to be paid out of that $4 billion (additional revenue),” he said.

Having already spent $3 billion of the $4 billion, he said that “the war (in Ukraine) is stopping. It might drag on a bit longer, we don’t know. Of the $4.2 billion, we are already spending $3.1 billion. Say we have $1 billion left, the backlog at 4% would be $1.45 billion. Do you know what that means? We have to go and borrow $450 million to pay off this backlog. He said the government might or might not, but “let them have their own way.”

people under pressure

The Prime Minister said that although the government had indicated that part of the windfall would go to civil servants, it had to determine what was affordable.

“We have to make a reasonable offer to the public servants because we don’t need anyone to tell us the pressure that the people of this country, like the public servants, have been under. We are the ones who said that we will not go to the International Monetary Fund (IMF), we will prescribe our own medicine giving us the possibility of doing what no IMF program will allow us to do. We didn’t fire a single public servant…because we said the first objective was to keep people in their jobs. “Second, the goal is that at the end of the month we have the money to pay you.

“And third goal, as soon as we can, we will improve your earning power. This is the order in which the government has operated. And if we get into a situation where we put (goal) number three ahead of number one, then you know what’s going on there,” he said.

The most important thing is to keep all jobs in place, the Prime Minister said, adding; “We have some respite now. I said let’s not overreact, let’s not get carried away.

“Because we all know what is happening in Ukraine might be temporary. More than likely, this is going to be temporary. Because the war in Ukraine has driven the largest oil exporter and one of the largest exporters of natural gas – Russia – out of the market. If something happens that changes this situation, then this pressure for the high price will disappear and the price of oil will fall,” he said.

“If tomorrow the Russians tried to stop the war, this pressure on the price of oil would be reduced. If tomorrow the Saudis decide that we have made enough money from this special arrangement and they are going to pump more oil; or if tomorrow the Venezuelans return to the market, this (high price) is gone. We are therefore in a temporary situation motivated only by the fact that the Russian offer was driven out of the market as a sanction for Russian behavior in Ukraine. So if we’re going to cut our fabric based on those prices that exist today, when the turnaround comes, we could end up with parts of our body exposed because the fabric wasn’t cut properly,” a- he declared.