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PUBLIC SERVICE WAGE UNDER CONTROL: TREASURER

■ Marape Government reduces salary over-runs from over K1 billion a year down to K387.2 million in 2021

NEWS

PUBLIC SERVICE WAGE UNDER CONTROL: TREASURER

The Pangu-led Government has brought the public service wage expenditure under control, according to Treasurer Ian Ling-Stuckey.

In a media statement, he said one of the major achievements of the Marape-Basil Government was to start to bring public service wage costs under control.


“In the first two years of the former O’Neill Government, public service wage costs exploded by 48.1 per cent.

“This was a major reason for the largest increase in the budget deficit ever in PNG’s history – from a balanced budget at the start of 2012 to a massive budget deficit of 7.8 percent of GDP just two years later.  In contrast, this government is working to keep public service wage costs under control. An increase of 4.5 per cent over two years versus the irresponsible 48.1 per cent increase of the former government” stated Treasurer Ling-Stuckey.

 

Public servant wage payments were K2,496 million (K2.5 billion) in 2012. By 2014, they had increased to K3,697 million (K3.7 billion), an increase of 48.1 per cent.  Wage costs were out of control.

“From 2019 to 2021, public service wage costs, despite major increases in financing for teachers and health workers, increased just under 4.5 per cent. From K5,831 million (K5.8 billion) in 2019 to K6,093 million (K6.1 billion) in 2021. 48.1 per cent increase in public service wages over 2 years versus 4.5 per cent.

“In 2018, the former government pretended that wage costs would only be K4,137.3 million (K4.1 billion). The Final Budget Outcome for 2018 indicates they lost control of wages yet again.  Actual expenditure was K5,198.4 million (K5.2 billion). This was a fiscally dangerous blow-out of over 25 per cent in just one year. Over K1 billion extra on public service wages.  Even then, they were not paying out the retirement benefits for long-serving  public servants and building up high levels of arrears. This was a government out of control.

“In 2019, the former O’Neill government then ridiculously only budgeted for K4,448.5 million (K4.4 billion) in wage costs, thereby pretending they were going to cut wages by K750 million.  They didn’t say how they were going to do this – they just pretended. This was just one of the clear examples of why I called the 2019 budget a fake budget.  The Due Diligence review in late 2019 confirmed that this was a fake figure, and the 2019 Supplementary Budget had to lift this figure by K930.6 million to K5,379.1 million (K5.4 billion). The 2019 wages figures were a fake budget with another massive blow-out of nearly a billion Kina.

“Our hard work has reduced the levels of salary over-runs from over K1 billion a year down to K387.2 million in 2021. It takes time to turn around all of the processes of government. That is why budget repair is going to take many years.  In recent years, we have been supporting increases in the numbers of police and health workers and teachers.

From 2022, we are making the wages budget subject to warrant authority budget control. Extraordinarily, this had not been the case – once a name was in the ALECSO payroll system, they would be paid even if there wasn’t enough money in the budget.  No private firm operates this way.  As a businessman, I was not willing for the government to run this way.”

“This is fiscal responsibility. This is the hard work of budget repair. Not necessarily popular. Unions, especially under my political opponent, will protest during this election campaign. We have built into the budget responsible wage increases, but never again the weak economic policies of the previous government that threatened our nation’s budget and our development with an average increase in public servant wages of 24 per cent each year.  How irresponsible! We should never forget” stated the Treasurer.

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