The Bermuda Government has proposed a ten percent salary cut across the board for all government workers, a measure estimated to save $37 million in a bid to reduce spending and the economic impact of the global COVID-19 pandemic.
Other proposals include the paying of all overtime work at straight time – a measure expected to save an additional $7 million.
The suspension of all superannuation contributions for one year, depending on the valuation of an actuary was also proposed.
Both government and employees would retain their 8 percent contributions to the fund under that scheme, which is expected to yield savings of nearly $29 million.
Another $9 million in savigs is expected from suspending all social insurance payments for one year.
The Government is also considering a program of voluntary early retirement, the details of which are still to be determined.
Also being considered are:
- a hiring freeze with some exceptions creating savings of just under 107 million dollars
- Capital Reductions – $24.0
- Supplies – $4.3
- Cut Grants to External Bodies – $4.3
- Repairs – $3.5
- Consultants (15%) – $3.2
- Training (50%) – $1.8
- Travel (50%) – $1.7
- Uniforms – $0.5
- Total projected savings from “other” cuts: – $43.2
- TOTAL PROJECTED SAVINGS – $150.0
The BPSU Executive Committee is disappointed with the Government’s proposal as it is not in keeping with their public commitment to ensuring that there is a shared sacrifice throughout the community. Additionally, despite assurances that “nothing was off the table”, it appears from our initial review of the proposal that many areas of the Government’s budget were not cut.
It is the BPSU’s position that:
- a 10 percent across the board pay-cut is unreasonable
- pension contributions must be maintained
- there needs to be further cuts on non-employee related expenses. To this end, our team has requested that the Government provide us with details of Government’s proposed cuts for each department.
The Union believes that there are other areas that can be trimmed. As an example, according to the 2020/21 Budget, Government was projected to spend nearly $313 in grants & contributions, $49m in professional services, $23m in materials & supplies, $17m in energy, $12m in rents and $9m in insurance. We believe that these expenses can and should be cut further.
Additionally, the BPSU strongly contends that any mutually agreed salary cut for Public Officers must be coupled with private-sector relief including a reduction in:
- mortgage interest rates
- electricity costs
- food costs
- health insurance premiums
Frankly speaking the BPSU said: “Without Public Service employees, Bermuda simply cannot function.”
Their position: “Public Officers are professionals dedicated to serving Bermuda; many of whom have taken on additional responsibilities for years without any additional compensation due to on-going budgetary constraints and hiring freezes.
“Many BPSU members have been serving on the Covid-19 frontline since the beginning of the pandemic at the very risk of their own lives.
“There are wide-sweeping economic consequences associated with a cut in Public Officers’ salaries. Public Service employees are taxpayers; cuts to their salaries will negatively impact tax revenues.
“Public Officers are also the largest employee consumer group on the Island; they are major supporters of local businesses. Officers are tenants and have rents to pay; they have mortgage obligations.
“It is the position of the BPSU that there must be shared sacrifice and a re-balancing of the burden; this is even more important given the economic crisis the country is facing as the inequities in Bermuda have been magnified.
“The BPSU will be submitting a counterproposal which will include the wide range of suggestions from our members regarding cost-cutting initiatives, improving efficiencies along with revenue-generating ideas.”
Reiterating “the protection of workers”, and in particular the union’s members, the BPSU says the issues at hand “will not prevent us from working with the Government to find a resolution that embraces the principle of shared sacrifice while at the same time maintaining quality public services”.