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Govt agrees to pay cut

OBA Leader Craig Cannonier

One Bermuda Alliance Leader Craig Cannonier yesterday insisted that Cabinet Ministers should bear the brunt of pay cuts.“The One Bermuda Alliance supports a pay cut for Ministers because they are the people in charge of the Government from policy to operations. It is Cabinet Ministers who run the Government, no one else,” Mr Cannonier said.“They are where the buck is supposed to stop.”His statement came hours after receiving a well publicised letter from Premier Paula Cox asking whether his party’s legislators would agree to a scheme which would see their take home pay drop by five percent.“We will agree to a five percent cut for MPs and Senators plus a one-year suspension of pension contributions if Cabinet Ministers agree to a ten percent pay cut and suspend their use of credit cards and expense accounts an area of personal spending that has been allowed to spiral out of control in recent years,“ Mr Cannonier said.He reminded the public that his party had pledged from inception that it would reduce Cabinet salaries by ten percent, but that the Premier had rejected Ministerial pay cuts as an “empty gesture”.“That refusal was not acceptable then and it became more unacceptable as Government cutbacks continued to pile up on the backs of working Bermudians.“The final straw, it appears, was last week when the Premier asked workers to take an eight percent pay cut without offering any similar sacrifice by her colleagues.“It was unacceptable then, and became more so as the arrogance of such a one-sided request sank in.“Indeed, the pay cut proposal may go down as the low-point in the history of the PLP in power illustrating how much the distance had grown between workers and their government.“That being said, the move for a pay cut, no matter how late in the game, is fundamentally right for Bermuda in these tough times.”In a similar deal to that offered to the Island’s public service workers, Government legislators have now agreed to a combined 17.5 percent decrease in pay.The first 12.5 percent is cancelled out by a freeze in pension contributions. Politicians have a different pension scheme to public workers who only have to pay eight percent in contributions.Premier Paula Cox wrote to Opposition Leader Craig Cannonier yesterday afternoon to ask whether OBA legislators would be willing to join the Government members. She also asked UBP MPs Kim and Charlie Swan to consider the same request.“You will be aware from media reports that representatives of the unions/associations who represent Government employees are currently considering a proposal which would, for a period of one year, involve a cessation of pension contributions together with a commensurate reduction in gross salary,” Ms Cox wrote.“I write to inform you that the Government members in the Legislature are prepared to accept a similar arrangement which would for a period of one year involve a cessation of pension contributions together with a commensurate reduction in gross salary. Further to this, Ministers and Government members in the Legislature are prepared to accept an additional decrease in their salaries of five percent.”She continued: “The combination of the two measures above will see a reduction of 17.5 percent in Minister and members’ salaries for this upcoming fiscal year. I would be grateful if you would indicate whether your members would be willing to join the Government members, and agree to a decrease in your salaries and a one-year freeze in pension contributions.”UBP MPs Kim and Charlie Swan have agreed to the proposal.In a statement last night Premier Cox said: “I was pleased to receive a response to my letter from Kim Swan who indicated that he and Charlie Swan would agree to the proposed 17.5 percent reduction in salaries for Ministers and Members of the Legislature.“This is the type of behaviour that is befitting of those that are truly interested in benefiting the country. I will continue to work with those who put the country ahead of politics and I am grateful for MP Swan’s swift and statesmanlike response.“I am disappointed that rather than working together, the OBA and their Leader Craig Cannonier insist on playing politics with this issue.“Instead of responding to me directly, I only learnt of their position through the media. Nonetheless, we will move ahead and I look forward to bringing the resolution to Parliament to make this 17.5 precent reduction a reality.“On the day of the vote, I hope both opposition parties will do what is in the best interest of the county and support this reduction.”Bermuda Industrial Union president Chris Furbert said yesterday on the evening news that workers would be encouraged by the news of Government’s decision.“It would appear that the Government is prepared to lead from the front,” he said.That view was echoed by Shine Hayward, president of the five-union Trade Union Congress who said: “Government wants to lead by example. I think that’s a very good thing.”Mr Furbert could not be contacted for his reaction to the OBA’s counter proposal by press time last night.“It would be interesting to see what type of decision they come up with, with respect to their respective proposals,” said Mr Hayward when told of the OBA’s response.The Premier’s offer to the public sector, if accepted, could save the Government millions of dollars, as its matching pension contributions would also be reduced. But the idea has drawn criticism in some quarters where it is considered a raid on already underfunded Government pension fund.All the unions involved pledged to consult their membership before responding to Government’s proposal.“Every one should have gone to their memberships by the end of the day tomorrow or Monday,” said Mr Hayward.Premier Cox is preparing her second budget as Premier and Finance Minister.Mr Cannonier’s statement referred to the Premier’s proposal to the public sector workers as a “desperation move to get her Government off the hook for what is shaping up to be the worst Budget in Bermuda’s modern history.“The workers’ pay cut has nothing to do with making things better for people. It has everything to do with making her Budget look better than it is,” he said.“Worker acceptance of the pay cut will allow the Premier to bury the hard reality of the Government’s extremely poor financial position and to postpone the consequences that she and her colleagues should confront as responsible people, as a matter of honour and self-respect.”In December the Premier said that a revenue shortfall of between $10 million and $20m was projected for the current fiscal year. Spending is expected to be $43m more than originally projected. OBA Shadow Finance Minister Bob Richards has estimated that the deal with the public sector workers could save the Government $64m but Government would still have to borrow more money.