Public servants’ salary increase joins long list of Gov’t relief interventions

As Christmas approaches, an across-the-board increase of 7% was announced for public servants, teachers, members of the Disciplined Services, Constitutional office holders, and government pensioners, by Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh.

The announcement was highly anticipated all year, as Government officials including His Excellency Dr. Mohamed Irfaan Ali, repeatedly sought to reassure the public throughout the year, of the coming increase.

This intervention will not only benefit the individuals who receive them, but the economy in the whole. Minister Singh, in an interview with the Department of Public Information, said the interventions will inject significant liquidity into the economy.

“When this money is paid to the teachers, to the members of the disciplined services, to the public servants, it doesn’t vanish into thin air, or they don’t lock it off somewhere in a box and it disappears, or put it under a mattress or somewhere and it disappears. They then take this salary increase, this money, this additional income that they would have received, what do they do with it logically? They go to the markets. They go to the shops. They go to the service providers and they spend it.”

In addition to the public servants’ pay hike, the finance minister announced that the PPP/C Government would make provisions in Budget 2022 to fix disparities and anomalies which exist in the remuneration systems of the public service. Particular note was made of pay disparities for persons who have the same qualifications but are paid differently across the public service.

The finance minister also announced that $400 million has been set aside for a special 2021 payout to frontline workers in the health sector who have endured challenging circumstances as they provided healthcare during the height of the COVID-19 pandemic.

These injections into 50,000-60,000 households, the Minister explained, begins a cycle that benefits the economy.

Interventions like these have been happening all year, since the new government assumed office.

Dr. Singh reminded during his announcement on Thursday that a COVID-19 cash grant of $25,000 per household was granted, resulting in the distribution of over $7.5 billion to families across all administrative regions.

Frontline workers in the health sector and disciplined services received yearend bonuses totalling $1 billion in December 2020.

All public sector employees received a one-off payment of $25,000 in December 2020, totaling $2 billion.

The monthly old age pension was increased from $20,500 to $25,000, amounting to a total annual benefit of $4 billion for the elderly.

The government increased public assistance by 33% from $9,000 to $12,000, handing over an additional $500 million annually.

In August 2021, the Government announced measures to provide a one-off grant of $25,000 to old-age pensioners, public assistance recipients, and persons living with disabilities, benefiting some 90,000 persons to the tune of $2.2 billion.

It also purchased $200 million of electricity credits for the most vulnerable households.

The Because We Care cash grant, which were taken away from public school children by the previous administration, was restored, increased to $19,000, and extended to private school children, amounting to an injection of $3.6 billion to help them get back to school.

These interventions were made after the PPP/C Government relieved citizens and businesses of a series of burdensome tax measures and provided much needed liquidity to reboot the economy.