Labour Minister Shane Gibson said yesterday that the government could freeze public servants’ salaries to get them more in line with the fragile conditions of the country’s economy.
He said ultimately, the government is trying to keep the cost of living down.
“The only way we could do that is to keep the cost of running these corporations at a bare minimum. I’m not sure how we are going to do it whether we are going to recommend salary freezes because it is difficult to change unilaterally persons’ terms and conditions of employment and so the idea is to see if we could have an agreement to do it, if not then we will have to put a structure in place to require ministerial approval once you deviate from it,” Minister Gibson said.
The minister, who is also the minister for national insurance, spoke with reporters while on his way to the weekly Cabinet meeting.
He said his concerns came about after it was revealed that executives in the National Insurance Board (NIB) awarded themselves hefty bonuses.
Former NIB Director Algernon Cargill was terminated along with other executives because of this.
“There’s a salary structure already in place at NIB. It’s difficult to move away from that structure now. I believe that when you look at the salary within structures at most of the public corporations particularly those that are not making money the way they did in the past, it is difficult to justify those high salaries,” Minister Gibson said.
“And then when you look at National Insurance, personally I believe that it got out of hand because it is a social security system. I think the downside of what happened in the past is that persons went into National Insurance and treated it like a private entity making hundreds of millions of dollars – paying out bonuses with high packages and compensation packages. They were getting meal allowances. The only thing they didn’t get was school and housing allowance and I believe if they were left in there long enough they probably would have gotten that as well. And so you can’t treat public corporation in that manner.”
The minister said there is also some concern with the Bahamas Electricity Corporation (BEC) and the Water and Sewage Corporation (WSC).
“Even if you look at BEC, years ago BEC made a lot of money. Now when you look at the cost of electricity, we really have to review the entire salary structure to see whether or not if it is relevant to the monies that the corporation is making or losing at this time,” Minister Gibson said.
“And so it’s the same thing at National Insurance and Water and Sewage. I’m not sure what’s happening at the Broadcasting Corporation but certainly when you look at BEC and National Insurance, I believe that all of their executives would make if not $100,000 a year it wouldn’t be far from that. I would venture to say that executives – the minimum they make is around $90,000 to $95,000. I would be surprised if any of them makes that low. Most of them are over $100,000. Cabinet Ministers only make $66,000 a year.”
The minister said he has requested a manpower assessment to be carried out throughout the public service.
“I am trying to get my colleagues to agree to extend it to the public corporations as well where we could approve a structure and for any corporation to move away from that structure we are trying to get them to get ministerial or cabinet approval because I think what happened over the past years is the individual boards were able to increase compensation and salaries of these corporations and really sort of put them out of whack,” Minister Gibson said.
“I think that they compared them with each other for a while and then they started to compare them with the private sector. And when they looked at the private sector to compare them to they compared them to private entities that were making millions of dollars. These corporations are not making millions of dollars.”
