President - Winston Smith

Concern Grows As End of Duty Concession Era Nears

Publication Date: 
Wednesday, April 13, 2022

Debate has intensified about plans by the Ministry of Finance and the Public Service to discontinue the 20 per cent duty concession on motor vehicles and weave it into travelling officers’ salaries, with one major union expressing concern about the implications of the move.

Meanwhile, a lawmaker has given the thumbs up to Dr Nigel Clarke for the new approach, but the minister would be aware of the threat of labour restiveness so soon after a whirlwind .

Those developments coincide with revelations in a mid-2020 draft report by consultants Ernst & Young showing that civil-service salaries are more than 53 per cent below market.

“The gap is most significant at senior levels, where civil-service salaries are 66.4 per cent below the market median for both basic salaries and for total compensation,” the report said.

President of the Jamaica Teachers’ Association (JTA), Winston Smith, said his association learnt about the proposed dissolution of duty concession through the media, noting that he was disappointed that the negotiated settlement was being treated in a non-consultative manner by the finance minister.

Smith said the JTA was of the view that dialogue should have first taken place with the unions before announcing what appears to be a unilateral decision to remove workers’ benefits.

The JTA boss wants to know how the Ministry of Finance will arrive at a figure to replace the sum for duty concession.

He argued that the value of duty concession varies according to the type, and value, of vehicle purchased by the travelling officer.

“If I purchase a motor car, for example, the concession value is about $900,000, but if I purchase a mid-size SUV, it could be around $1.2 million. However, if I purchase a BMW, Prado, or Mercedes-Benz, the concession value will also be different,” said the teachers’ union president.

Using a range of prices for vehicles, Smith is questioning how Clarke would arrive at a baseline figure to roll into the travelling officer’s salary.

Another concern highlighted by the JTA head is that when the concession sum is rolled into salaries, those amounts would be subject to taxation.

“This is supposed to be a benefit that is free from taxation. It’s a tax-reduction benefit to civil servants to encourage them to do the work that the Government is unable to pay them effectively for,” he said.

With spectre that associated vehicle-purchase government loans to travelling officers may be on the chopping board, Smith warned that such a move would further erode public-sector workers’ commitment.

The JTA president indicated that it was regrettable that the minister announced plans to eliminate the duty concession without first engaging the association to arrive at a mutually acceptable position.

Smith also argued that incremental monthly payments over a protracted period may have less net value than a one-off lump sum.

“Money today is not money five years down the road, unless the minister is going to say to me that we will do our calculation and look at the future value of money and apply that principle so the money is adjusted with inflation, rather than a flat figure given at a point in time,” said Smith.

Quizzed about the Ministry of Finance’s proposal to scrap duty concession to travelling officers, government Senator Dr Saphire Longmore said that she was confident in Clarke’s approach to resolving what has been a demonstrably inefficient system. She said the process to access the benefit was was tedious.

“I am actually quite relieved to see that we might be getting a new solution and I would go with his reassurance that we will not miss out on the benefit of giving our service to the public service in this way,” Longmore said in a Gleaner interview.

“I am really impressed with the fact that he made such an announcement and ‘yes’, we have elements who are aware and have some concern, but the public outcry that you would have gotten from something like this in the past is definitely not forthcoming.”

But opposition counterpart Lambert Brown has sounded a note of concern.

The senator cautioned against removing public-sector workers’ benefits without dialogue and agreement.

“In the absence of consultation, the Government would be acting arbitrarily and that would run counter to the freedom of collective bargaining,” he declared, adding that such a scenario would be frowned on by the International Labour Organization.

However, Garfield Angus, a public-sector worker, argued that in 2010, he made a proposal to the Public Service Commission that benefits such as duty concession should be rolled into salaries.

He said that there was an absence of equity in some instances where public-sector travelling officers in similar positions carrying out the same job receive different travelling benefits.

Angus is in agreement with the finance minister and wants duty concession and travelling benefits due to him covered in his pay cheque.

“Pay me and allow me to make my own decision,” Angus insisted.

The leadership of the Jamaica Civil Service Association (JCSA) made it clear on Monday that it has not accepted, or signed off, on any adjustments to total compensation arising from the review.

The union said in a press statement on Monday that while it welcomed attempts to rationalise benefits and to move public-sector compensation closer to market, details of the policy shift have not been fully shared with the JCSA.

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