The Government has warned public sector groups that if they fail to settle wage agreements under its new compensation scheme in the coming weeks they could have to wait more than one year to get any increase in their salaries and retroactive payments.

Minister of Finance Dr Nigel Clarke on Tuesday announced that there will be no room in the 2023/24 budget to accommodate those payments and the Government workers would have to wait until post-2023/24 fiscal year to start getting whatever new wages are agreed, in increments.

Clarke made the announcement in the House of Representatives while tabling the 2023/24 Estimates of Expenditure for the country’s first $1-trillion budget, which is just about $2 billion more than last year’s, which finished at $998 billion at the end of January.

This was after three supplementary estimates were taken to Parliament, the second and third to pay retroactive wages and new salaries to public sector workers under the new compensation scheme.

Clarke drew attention to the largest single item of expenditure — $338 billion for wages and salaries, which includes provisions for the second year of implementation of the public sector compensation restructuring.

“This level of expenditure is approximately $100 billion higher than the wages and salaries for fiscal year 2021-22, after adjusting for allowances previously captured in programmes. It should be abundantly evident that there is no room in the upcoming fiscal year (2023-24) for salary payments related to 2022-23 to be made. The amount of $338 billion only contains 2023-24 salaries,” he stated.

Clarke stressed that the Government is working feverishly to complete negotiations in the remaining weeks of the current fiscal year to facilitate salaries for 2022/23.

“Any of these amounts not paid this fiscal year will have to be paid over a number of years beginning in the fiscal year that follows the upcoming one [2023/24],” Clarke said, adding that even if the first answer to the new wage offer is no, the Government is not deterred. “That doesn’t mean we cannot get to a yes. There are only a few weeks left. We are available morning, noon, and night, weekday and weekend, let’s talk, let’s get it done.”

This would affect major public sector groups including members of the Jamaica Constabulary Force, teachers, and medical doctors who work in the public system.

The finance minister stressed that this will also have an impact on the political directorate, who are awaiting their turn, while agreements with the rest of the public sector are wrapped up.

“The people have to come before us. We will not be in a position to make compensation adjustments until we adjust for the major groups. This may not be convenient, but it’s simply a matter of principle,” he told the House.

Clarke reiterated, after concerns were again raised by Opposition spokesman on finance Julian Robinson about the apprehension and dissatisfaction among the workers, that the process is a complex one involving 180 bargaining units and representatives across the sector.

“As a result, by definition it will result in persons engaging the public domain in conversation, but that should not deter us, nor should this lead us to develop narratives that aren’t completely accurate,” he said.

In the meantime, Clarke — providing an overview of the allocations in the proposed budget — outlined that $665.7 billion or 22.5 per cent of gross domestic product (GDP) is allocated to non-recurrent debt expenditure; $75.3 billion (two per cent of GDP) to capital expenditure; and $280.6 billion (9.5 per cent of GDP) to debt servicing.

The non-debt recurrent expenditure includes allocations to implement the second year of the three-year public sector compensation restructuring, and allocations to operationalise the Independent Fiscal Commission. Capital expenditure allocations include spending on existing capacity to implement capital programmes, and development programmes.

Clarke told the House that, “Debt service, which reflects both principal payments and interest payments, reflects actions taken over prior years to reduce the debt burden with interest payments this year of $155 billion being fully financed by revenue.”

He said overall public debt is estimated to end the current fiscal year at 79.7 per cent of GDP, which is expected to decline to 74.2 per cent of GDP in the upcoming fiscal year. According to the finance minister, this projection, if achieved, “would mark the first time… that debt has entered the domain of pre-Finsac levels”.

Meanwhile, central government revenues and grant inflows are estimated at $897.6 billion, which alongside the above-the-line expenditure of $887.7 billion will generate the required fiscal balance surplus of $9.9 billion, or 0.3 per cent of GDP, consistent with fiscal rules, Clarke told the House.

He said overall revenue and balance surpluses of $581 billion and $29.2 billion, respectively, is projected for financing public bodies in 2023/24, while the capital expenditure programme for these bodies is budgeted at $75.9 billion, with the National Housing Trust, Clarendon Alumina Production Limited, and the National Water Commission accounting for 68 per cent of the capital budget.

The finance minister is scheduled to open the budget debate on March 7.