7% salary increase contextualised: Govt focusing on boosting spending power of Guyanese – President Ali

…says disposable income was crippled under APNU/AFC coalition

In defence of the seven per cent retroactive across-the-board salary increase for all public servants, President Dr Irfaan Ali on Friday said his Administration is focused on holistically improving the lives of Guyanese by enhancing their spending power.
During a live broadcast to the nation, President Ali posited that the salary increase that was announced by his Administration last week cannot be viewed in isolation and must be compared with the living conditions under the A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition from 2015 to the early parts of 2020.

He reminded that the coalition Administration inherited a buoyant economy when they took office in 2015, whereas his party – the People’s Progressive Party/Civic (PPP/C) – entered Government in the midst of a global pandemic and at a time when most of the economic sectors in the country were on the decline.
“Disposable income was reduced to rubble under APNU/AFC… Public servants, like all other Guyanese, bore the brunt of the tax increases and new tax implemented by the APNU/AFC when they were in Government,” he stated.
These include Value-Added Tax (VAT) on water, electricity, medical supplies, and even private education.
He reminded too that one of the first actions of the coalition Administration was to give their Ministers a 50 per cent salary increase, while many public servants, such as medical professionals, were driven out of the system after they were forced off of contract employment and placed on the permanently established system. This, the President explained, deprived many persons of benefits they were receiving under the contract system, such as gratuity that is equivalent to 22.5 per cent of their salary.
The Guyanese Head of State further highlighted that the ban on the importation of vehicles more than eight years old has made vehicle ownership practically inaccessible to the ordinary man. He added that homeownership was similarly out of reach after the APNU/AFC Government reduced the ceiling on mortgage interest relief by 50 per cent.

Crippled spending power
These, Ali noted, were also coupled with the removal of cash grants to children in the public school system as well as the thousands of workers that were placed on the breadline by the coalition regime.
“All of this was introduced by them that disappeared your disposable income. VAT on essential foods – all this crippled the spending power of the public servants and the Guyanese as a whole,” the Head of State argued.
According to President Ali, the current criticism over the salary increase is to distract from the destruction the coalition caused the Guyanese economy, which resulted in the drastic reduction of disposable income and crippled the spending power of Guyanese including public servants.
“You know how you can understand the effect [of the measures by APNU/AFC], let us go back to the records, and see how many people build homes in that period, how many people accessed a loan to do business in that period, and compared that with just one year of the PPP Government in office. You’ll be blown away because now, there is more disposable income in the hands of people to do more,” he stated.
In fact, he further reminded that it was his PPP/C Administration that had to put several initiatives in place to reverse these draconian measures and burdensome taxes upon taking office in August last year. He also recalled the host of other initiatives such as cash grants that the current Government implement over the past year to bring relief to Guyanese; firstly, from the impact of the pandemic, and then from the unprecedented May-June floods – which have resulted in billions of dollars being placed into the pockets of the people.

Strengthening disposable income
Nevertheless, President Ali contended that the seven per cent increase must be taken into context holistically coupled with his Government’s “balanced approach” to improve the lives of Guyanese in all facets.

“Our focus is on strengthening your disposable income. Our focus is giving back more to you; giving to your families; enhancing your welfare; improving your livelihoods; making homeownership easier; building a strong, healthy, highly-educated society; scholarships for you. In addition to the scholarship, we still have the commitment to making university education free. All of those measures we have to find resources for,” he stressed.
Moreover, the President further stated that in addition to the seven per cent pay hike, his Government has also set aside $400 million specifically for frontline health workers, while also hinting at more benefits for public servants.
“We’re still not at the end of this year… and we still have announcements to make… I promise you that we will be transparent in every measure… All our commitment in the manifesto will be kept, mark my words this morning. We don’t hide from what we do because what we do can withstand scrutiny,” Ali declared.
Further insisting that he is not in the business of scoring cheap political points or misleading people, the Head of State called on naysayers to be objective in their assessments.
He specifically mentioned trade unions that have been critical of the seven per cent increase, saying that those leaders must “take off its political hat and put on the hat of reality” as he outlined the situation across the globe and how public servants in other countries have not benefitted from so many measures during the pandemic as Guyanese have.