The Government has no money to pay public servants their arrears in salaries and backpay resulting from wage negotiations settled by the last People’s Partnership administration, Finance Minister Colm Imbert admitted yesterday.
Imbert made the statement while speaking on a government motion on the Exemption from Import Duties of Custom in Parliament.
Blaming the last PP administration for maxing out the overdraft at the Central Bank and leaving the People’s National Movement (PNM) Government with a severe cash flow problem, Imbert said there was simply insufficient money to pay the outstanding money owed.
He said public servants, among them members of the health sector and protective services, were owed “billions and billions of dollars.”
Imbert gave the assurance, however, that public servants, who were hoping for their arrears in time for the Christmas season, would get this month’s salary by December 18.
He also promised that he intended to raise the money, an estimated $5 billion, to pay them via special bond issues and said he had met with commercial banks yesterday to start this process.
Imbert said he would do all he could to ensure the outstanding salaries were paid at the earliest opportunity in 2016.
Asked by former planning minister Dr Bhoe Tewarie if the Government did not receive $12 million from a revenue stream left by his former government, Imbert said that was a figment of his imagination.
“I have heard references to alleged revenue streams but the paperwork was never done. No arrangements were made for these revenue streams.
“They were figments of your imagination,” Imbert shot back at Tewarie.
Imbert insisted, despite charges by the Opposition to the contrary, that “this Government is managing our fiscal finances in a prudent manner.” However, the Government has recently been confronted with a hitherto unseen cash flow problem, he added.
He said a government’s expenditure in a typical month was usually around $3 billion, but in October this amounted to $3.2 billion. In September, on the other hand, he said, it shot up to $8.5 billion when it should have been no more than $3 to $4 billion. Combined expenditure over those two months totalled close to $13 billion, he said.
Imbert said the last government’s mad rush to settle payments to contractors and suppliers before the end of the fiscal year on September 30 caused this unusual pattern.
He said the Central Bank’s overdraft was mismanaged and because of this other funds could not be accessed until it was brought back to a normal level. And this was why the Government had no money at this time to pay public servants their arrears and backpay, he said.