Chris Ram urges reversal of salary increases for Ministers, MPs

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The David Granger administration.
Chartered Accountant, Christopher Ram
Chartered Accountant, Christopher Ram

[www.inewsguyana.com] – Chartered Accountant Christopher Ram is urging that the Government of Guyana reverse its decision to implement salary increase for Ministers, and Members of Parliament.

Read Ram’s full post below:

After less than five months in office, members of the Granger Cabinet have decided to award themselves salary increases of 50%. The increases take effect from July 1, so that the increase of 50% was after less than six weeks the Ministers had been on the job. When the press approached him some months earlier, Governance Minister Mr. Raphael Trotman had said there would be no astronomical increases. But is it not astronomical when compared with what Cabinet approved in the Finance Minister’s Budget for government employees and pensioners?

In that Budget, the minimum salary in the public service was increased from $42,703 per month to $50,000 per month, or 17.1%. But there was a catch: unlike every other year in the past thirty years, the increase was for half the year only. The effective increase then, for the people at the bottom of the scale, for 2015 over 2014, is 8.5%. For public servants receiving a salary of $100,000, the increase was 10%, or 5% over a full year, and for those receiving $200,000 and $500,000 the effective annual increase was 3.75% and 3.0% respectively. There was an additional increase of $5,000 per month for persons above the minimum wage. Note that for public servants the higher salaries attracted lower percentages and lower salaries attracted higher percentages. Cabinet clearly did not think that principle applied to them. The APNU+AFC’s 100 days commitment was “Significant salary increases for government workers, including nurses, teachers in primary, secondary and tertiary education; security personnel; and civil servants on the traditional payroll.”

And how about pensioners? Ram & McRae’s Budget Focus 2015 had noted that 2015 pension increases were subject to no retroactivity. And while the Finance Minister announced a $3,875 increase in the monthly pension from September 1, 2015, the Budget withdrew the monthly subsidy of $2,500 and $990 for GPL and GWI previously enjoyed by pensioners. Net increase: $385 per month but payable from September 1, an increase in 2015 of less than 1%! The APNU +AFC’s 100 days commitment was “Significant increase in Old Age Pensions”.

It seems however, that no percentage, however egregious, can truly reflect the palpable outrage felt by citizens over the increase awarded to themselves by a Cabinet in office after less than half a year. This is not about bad optics, bad timing or bad politics as some are suggesting without any regard for the finances of the country. Unless the Government can transform the 2015 projected $50,000 million deficit into a surplus, pay its public servants a living wage, and afford its pensioners some dignity, the increase will be as bad next year as it is now.

The unprecedented increase has been justified on some unusual grounds: this is about wage-led growth; that Cabinet is made up of quality persons; the beneficiaries were earning more in their private practice; they deserve the increase; or the increase will stop them from thieving. The merit of each of these is not only arguable, it is dubious.

The question for me is if the financial situation which confronted Cabinet when it took office was worse than they thought, and which therefore prevented them from honouring commitments they made to voters, how come they can meet commitments they did not make? That is not the integrity and transparency which many thought would be the principles on which an APNU+AFC Government would operate.

I remain open to persuasion and therefore invite my professional colleagues in the Cabinet to make public their tax returns to show the kind of income which they now demand, because, as they claim, that is what they used to earn. And if that is indeed the case, why did they not tell us about their plan? And is there no element of public service to their work? And can they confirm that they have all shut shop and have given up their private businesses?

Many commentators and bloggers argue that the increase is really about income maximisation, and that what was involved was the use of creative counting to achieve the desired result. So take the salary of the Attorney General which in turn is the salary of the Chancellor. Now, because the Chancellor gets a tax-free salary, the thinking is that the AG’s salary should be treated as net. And since the AG cannot earn more than the Prime Minister, the Prime Minister’s net salary has to be higher than the AG’s, followed by VP’s, followed by Ministers and MP’s. One has to ask, why stop there?

But the base is clearly wrong. Only three persons are statutorily permitted a tax-free salary: the President, the Chancellor and the Chief Justice. Anything else is illegal and even Cabinet cannot make it so. I respectfully recommend that they read the Income Tax Act and the Financial Administration and Audit Act.

 

As the Ministers make their case for entitlement, they must not ignore the range of benefits which they receive at taxpayers’ expense: 24-hour security; all expenses paid vehicle and chauffeur; tax-free gratuity for their chauffeur; free electricity; free telephone; housing or housing allowance for Senior Ministers and the Attorney General, even when they live in their own homes; entertainment allowance when everyone knows the Ministers are the ones to be entertained; free crossing on toll bridges; no airport tax; generous leave and leave benefits; access to valuable medical benefits; and perhaps as valuable as all the other allowances put together, the right to duty exemption on a vehicle every three years.

Oh, and these are not all. MP’s are paid an additional $20,000 per month for being a member of a Parliamentary Sessional Committee; an additional $25,000 per month as a Chairman or Deputy Chairman (sic) of such a Committee; and an allowance of $15,000 per month as a representative of a Geographic Constituency. Conservatively, these are easily worth another million per month.

Oh, and I forgot. Members of Parliament earn a pension after four years while the average person has to work and contribute to the NIS for fifteen years!

Is there a way out? I think so. But Cabinet needs to admit that they have made a giant misstep. It is not too late to reverse the decision and have the National Assembly appoint an independent Compensation Committee to look into the question of compensation for Ministers, MP’s and other political appointees. Indeed, this should be a permanent arrangement which prevents what is a clear conflict of interest for Cabinet members.

The terms of reference of such a Committee should not be difficult to establish: not too high to make it a coveted job and not too low to deter suitable persons; comparability with jobs in the public sector; ability to pay (they tell public servants that all the time); and evaluating the compensation package in its entirety, including all perks. To the extent that there is any comparability with other countries, regard must be paid to the economic and other conditions of those countries.

16 COMMENTS

  1. You are the only idiot to say something negative. Stick to the topic. He had a agreement and he worked for it. Whats these new minister agreement with the public. They said they will listen to the public concern and fix it.

  2. This defacto government said that the treasury is empty, but it found money to give it boys and gals.

    A big rip off of the treasury .
    God have mercy.

  3. Have we notice the increase was effective July 1’st? Therefore it was just six weeks into office that they got a raise of pay for being into opposition for many years.What have they done to justify this increase? How can harmonon tell us this is the right path to a non corrupt gov’t?

  4. I love the way u did all the necessary research to bring us the facts. For them not wanting to reverse the decision, then i do not think that they should be annoyed when after their 5 years and the democratic voice of the people speak. They justified this by saying that they would not have to thief like the corrupt PPP but what about the actual people who has to do the work and has to survive on a small salary? Would we still see thiefing/corruption coming from the ordinary man? Come on government, rethink that decision.

  5. Reversing this decision will never happen under APNU+AFC=PNC Defacto Government. These guys just wanted to get into office so they can full their pockets and take from yours (the electorate). This is a boys club and most importantly the old boys club. Fellow Guyanese stand up for your rights. Let your voices be heard. You have made a mistake by supporting this Defacto Government however in 2020 you can reverse this trend. Let’s put Guyana FIRST.

  6. Okay Ram, prove to us that you have two testicles in that big scrotum of yours by bringing out Sherlina Nageer to protest the raping of our treasury.
    Can you and Sherlina do to Harmon and Moses, what you did to Beri??

  7. Although I know as well as many others out there know. Where Mr ram political allegiance lies l,i must say that he sounds more conscious and alert of the current situation guyana is in.. look at the incentives and allowances the ministers get and still getting a fat salary just to add insult to injury… it doesn’t mean that Mr ram would be side tracked from his political liking of his govt.. we all know that his comment on this issue would definitely hurt and embarrass his frens and cohorts in the govt… thank you Mr ram for not stifling your conscious.. let’s see how the cookie crumbles.!!!

  8. I am very disappointed in the government’s decision to raise the salaries of the ministers and members of parliament only just after five months in office. I have now changed my mind in returning for the 50th anniversary. Shame.

  9. Well said Mr. Ram. Yes we all want to be rewarded for our efforts; however, the choice to represent the citizenry of Guyana is one that members of this administration freely selected. As such, they need to place the needs of Guyana’s citizens first and there’s second. If monetary compensation is what’s driving their desire to serve the people, then they should not be part of the administration/cabinet.
    Additionally, I agree that there needs to be an independent committee responsible for the review and dispensation of salaries for Ministers, MP’s and other political appointees. To not do as such will forever perpetuate the stigmatisms of conflict of interest and continued instability in the allocation of compensation.

  10. Mr Ram reversing their decision would never happen. They would now be getting more than T&T Ministers even though their economy is three times the size of Guyana economy.

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