GOB too big, needs to be cut down

BBN Staff: Any discussion about scaling down the size of government and cutting the country’s wage bill obviously involves a discussion about letting people go. It’s a very touchy and controversial subject because no government wants to feel the wrath of a public dejected by retrenchment. 

The truth is, however, if government doesn’t find a way to cut public spending things could get much worse for the country economically. And this is something the Belizean public also needs to understand. Just recently, the International Monetary Fund (IMF) released a report on the current status of Belize’s economic situation and among the many recommendations it made was that Belize find a way to cut its public wage bill and curb public spending.

The writing is on the wall. It’s very clear. What isn’t clear is why it seems so difficult for the government to implement measures to improve the current economic slump.

The IMF projected that growth would continue slowing unless GOB implemented structural reforms including a combination of strong revenue and expenditure measures such as broadening the tax base and implementing other tax reforms, containing the public sector wage bill, initiating a parametric reform of the public pension system and strengthening controls in multiple areas of public financial management system.

Several months ago Business Senator Mark Lizarraga also raised concern over the public sector wage bill. At the time, he illustrated through the approved budget estimates from the Ministry of Finance, that the total in labor-related costs represents some 63 percent of government’s expenditures. Lizarraga maintained that Belize’s wage bill is among the highest in the region.

Teachers and other public servants are also due to receive another salary adjustment soon, as part of its Collective Bargaining Agreement with the government. In 2014 GOB approved a 5 percent increase for teachers, and in June 2015 teachers and public officers got an 8 percent increase, worth $43 million.

The staff of the Karl Heusner Memorial Hospital (KHMH) also received a 14 percent salary adjustment in 2015, valued at $1.6 million. Last year the Belize Energy Workers Union (BEWU) also received a 7.5 percent salary adjustment to be rolled out between 2015-2018.

In 2014 the Belize Chamber of Commerce and Industry (BCCI) had even called for a public sector audit. Such an audit would have pointed out all the redundant positions within the public service, many of which are occupied by friends and relatives of government officials. It is no secret how inefficient the government is as it relates to accountability of public funds and the wage bill is a glaring example of that.

Add to the fact that GOB can’t stop borrowing and growing the country’s national debt, there is real cause for concern. GOB needs to find a way to cut public spending among other measures. The survival of the economy depends on it. The government and the public, however, seem to be focused on other issues; Guatemala to be exact. It is an important issue, no doubt, but there are other issues here at home that deserve the same level of attention.

 

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