Public sector workers could be laid off this fiscal year, Finance Minister Bob Richards warned as he lamented the union leadership’s refusal to continue with furlough days.

Mr Richards said job losses could no longer be ruled out as Government trims its expenditures to hold on to its financial independence against the growing threat of crippling debt.

Accusing the union of “changing its mind” on furloughs, the Mr Richards stressed Government had a duty to help not just public sector workers, but also the private sector, charities, children, students and seniors.

New figures show Government is budgeting for 5,222 full-time employees for 2015-16, costing an average of $75,193 each. This compares with 5,793 full-time employees, at an average of $69,303, five years ago. Mr Richards told the House of Assembly in his Budget statement: “The forecast reduction in current spending is estimated at 3.5 per cent or $33.1 million after the savings from the furlough have been allocated back in the Budget.

“We cannot guarantee that the planned reduction in spending can be achieved without layoffs of workers in the public sector for the coming fiscal year.”

He said furloughs were intended as a less painful measure than alternatives such as redundancies.

“Government understands and regrets the trauma associated with cost cutting and we are endeavouring to enact these adjustments in a way that minimises the negative fallout for public servants,” the Finance Minister said.

“The furlough arrangement that expires on March 31 was an example of minimising negative fallout. Government was committed to cutting spending by 7 per cent for the fiscal year 2014-15.

The furlough was an important component in helping to reach that goal.

“No one likes the furlough. It is a pain in the neck for everyone. But it enabled the Government to minimise the negative impact on public service employees by avoiding redundancies.

“Two years ago, the unions and Government agreed that one furlough day per month would preserve public sector jobs. It was true then and it is true now. The financial stresses behind that decision have not abated.

“Government has gone more than the extra mile to consult with the union leadership, seeking mutually agreed solutions to Government’s financial difficulties.

“Their participation in the budgeting process has been literally unprecedented.

“The union leadership has now changed its mind on the furlough; so be it. The arrangement is voluntary, so it cannot be forced. The Government appreciates their cooperation in the two-year MOU that ends next month, and we presume their change of stance is in the interests of their members.

“However, the Government’s responsibilities include the whole of Bermuda: private sector businesses, private sector workers, public sector workers, charities, children, students and seniors. The risks posed by the deficit and the public debt threaten the welfare of all sectors and all people in this Island and everyone should be prepared to be part of the solution.”

Responding yesterday, Chris Furbert, president of the Bermuda Industrial Union, said: “I think he basically has blamed the Trade Union Congress for not continuing furlough days. The TUC will be making a comment on that. I know how it may affect my members as it relates to what he said and BIU will be taking a look at that.”

Mr Furbert said a full statement would be released early next week.

Mr Richards also took issue with suggestions that Government is trying to place the financial burden on the public sector — pointing out the private sector, including blue collar workers and those in financial services, retail and exempted companies, have already had to withstand thousands of redundancies, reduced hours and reduced days.

He said of Bermuda’s 3,000 unemployed people: “There’s one thing all these people have in common, and it is that none of them have been made redundant from the public service. None! All of Bermuda’s unemployed are from the private sector.

“The question of whether or not that is fair is an open one.

“Public sector workers have fared much better than their private sector counterparts during this recession.”

Earlier in his Budget statement, Mr Richards had highlighted the potential consequences if Bermuda does not address the causes of its financial problems, with the International Monetary Fund forcing one Caribbean island to lay off 15 per cent of its public sector workers.

Already, Mr Richards said, the failure to renew furlough had forced the Government to budget for a series of painful cuts, including a cap on financial assistance and school consolidations.