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Mr. Speaker, a Presidential Public Service Salaries Review Commission was appointed in June 2007 to review the conditions of service (including salary scales, allowances and fringe benefits) for the Public Service. The Commission submitted its Report to His Excellency the President in November 2007.
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Mr. Speaker, the Commission concluded that the Public Service remuneration policy should aim at establishing a pay system sufficient to attract, motivate and retain the right staff to facilitate effective and efficient operation of the Public Service, and to evolve over time to keep up with socio-economic changes. It found that the Public Service pays between 20% and 30% below the market lower quartile for basic salary. This is partly attributable to inadequate inter-grade differentials. The Commission recommended that inter-grade differentials be increased to between 20 percent and 30 percent at all levels, and the 2% intra-grade differentials should be maintained.
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The Commission therefore developed four (4) scenarios of an adjusted salary structure at fifteen (15%), twenty (20%), twenty-five (25%), and thirty percent (30%) across the board increase, after the inter-grade differentials adjustments. In the final analysis, the Commission recommended that the thirty (30%) percent case be adopted.
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Mr. Speaker, in considering the report of the Commission Government looked at the following:
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Government expenditure should not exceed 40 percent of GDP;
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Expenditure on development projects, at 25.4 percent of total expenditure, should not fall far short of the agreed target of 30 percent of total Government expenditure; and
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The Government budget deficit should not exceed 3 percent of GDP, which is the international norm for an acceptable deficit ratio.
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Mr. Speaker, in view of the aforesaid and given the wide range of issues, including affordability and sustainability, Government has decided to award a fifteen percent (15%) salary increase across the board, as well as fifteen percent (15%) increase of all allowances.
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Mr. Speaker, The increases will take effect from 1st April 2008.
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