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Feb 9, 2021

Should G.O.B. Execute a Public Sector Wage Cut?

The Belize Chamber and Commerce and Industry has written to Prime Minister John Briceño regarding budget consultations.  The letter dated February eighth expresses the Chambers’ appreciation to be included in the budget consultations.  One of the foremost concerns expressed by the Chamber is whether or not the Government of Belize should execute a public sector wage cut. The B.C.C.I. reminds the Prime Minister that Belize’s public-sector wage bill has—since the mid 1990s—surpassed its benchmark indicators for a country of our size.  The letter says, “recognizing that there have always been economic, social and even political arguments against an abrupt cut, the B.C.C.I. had adopted the advice from the likes of the International Monetary Fund as it pertains to attrition, which would have allowed the gradual reduction in the wage bill by rehiring at a rate lower than the natural rate of retirement or resignations from public service.”  Chamber is suggesting that in the event the government decides that a wage cut is its most prudent option; it is important to consider the progressivity of any such cut, so as to not have those on the lower pay scales equally affected as those at the higher scales. Government is being recommended to insulate essential, frontline workers from any such cut.  The Chamber says that the government needs to rapidly take administrative steps to close tax loopholes such as instituting a hiring freeze and commencing or finalizing a thorough payroll audit. The B.C.C.I. states that it will not object if the government ultimately decides that this is the most prudent option, after it has judiciously weighed its benefits and costs.

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