Prime Minister Allen Chastanet says government negotiators will meet with trade union representatives on Tuesday. Government’s offer is that for three months part of the salaries of public servants in Grades 7-21 will be paid in cash and part in interest bearing bonds.
Persons in Grades 1-6 and pensioners will be paid as usual.
Mr. Chastanet says if the offer is accepted this will allow government to keep some cash on hand to pay debt and other emergency services. He notes that government cannot default on loan payments as repercussions will be severe.
He says all government is asking for is a little time, ‘three months to be precise’. Government revenue for April declined to $40M – a sixty percent drop over the $101M collected in April 2019.
The Prime Minister reported that the economy has been decimated by COVID-19 and recovery requires stringent cash flow management and a great deal of fiscal prudence including a reduction of non-essential expenditure.
He revealed that a phased re-opening of the economy has already started and a gradual opening of borders will likely take place between June and September.
Mr. Chastanet went on to add that the RECOVERY process will start in September after the country has had a ‘clear assessment of the economic impact of COVID and only then can we consider making permanent adjustments to our fiscal projections”.
He said a lot will “depend on the pace at which international travel and commerce resume”.
The Prime Minister reported that key to the economic recovery is the continuation of large scale investment projects such as St. Jude Hospital and the redevelopment of the Hewanorra International Airport.