A 12.5 per cent pay cut for MPs and senators plus a suspension of payments to the public service superannuation fund will be tabled in the House of Assembly on Friday, it was revealed last night.

David Burt said the cuts were agreed at a Cabinet meeting on Sunday after talks with government backbenchers and the Opposition.

Mr Burt added the Government would be “leading from the front” with the wage cuts — despite the reductions coming several weeks after many members of the public lost their employment or took big salary hits in the wake of the coronavirus crisis.

The news came after the island’s white-collar union said it would put forward a string of counterproposals, having rejected a government plan to slash public-sector costs in the wake of economic havoc caused by the pandemic.

The Bermuda Public Services Union kicked out suggestions the Government said could save almost $150 million, including a 10 per cent cut in public-sector salaries, a ban on overtime, a hiring freeze and an early retirement scheme.

However, Mr Burt last night denied the plan had been rejected. He said there had been “no official response from any public-sector union”.

Mr Burt added: “What was sent to the union over the last week, following our conversation, is the only proposal from the Government of Bermuda.”

Mr Burt emphasised that no civil servant would be “taking home any less money” under the proposed cost-cutting deal.

He said pay levels would be maintained in the next financial year by a one-year suspension of superannuation payments by employees and the Government and a freeze on social insurance payments.

The BPSU declined to comment yesterday, but a leaked e-mail to its members said it was “disappointed” at the offer.

The union executive committee, in a memo leaked last Friday, branded the wage cuts “unreasonable” and said pension contributions “must be maintained”.

The union also asked for a list of proposed cuts for each government department and added that “further cuts on non-employee related expenses” were needed.

The statement added: “The union believes that there are other areas that can be trimmed.”

The statement highlighted potential further cuts to grants and contributions, as well as reductions in the cost of professional services, materials and supplies, energy, rents and insurance.

The statement said the BPSU “strongly contends that any mutually agreed salary cuts for public officers must be coupled with private-sector relief” — including a drop in mortgage rates, electricity and food costs, and health insurance premiums.

The counterproposal was said to include suggestions from BPSU members on how to save money, including improved efficiency and better revenue generation.

It added that budget constraints and a hiring freeze had piled extra responsibilities on to the public sector, which had gone years without extra compensation, and pointed out that public service employees were “the largest employee consumer group on the island”.

The statement said: “It is the position of the BPSU that there must be shared sacrifice and a rebalancing of the budget — this is even more important given the economic crisis the country is facing, as the inequities in Bermuda have been magnified.”

It added the Government’s proposals were “not in keeping with their public commitment to ensuring that there is a shared sacrifice throughout the community”.

The e-mail to members from Armell Thomas, the president of the BPSU, came the day after a meeting between the Bermuda Trade Union Congress and the Government.

The e-mail sparked criticism from the Premier, who insisted talks should be kept private.

Mr Burt, speaking at the close of last Friday’s Covid-19 briefing, said the proposals were “a one-time emergency item”.

The Government had suggested $106.8 million in employee-related cuts, with a further $43.2 million slashed elsewhere in the Budget.

These included reductions that ranged from $24 million in capital spending, $4.3 million on supplies, another $4.3 million from grants to external bodies, as well as cuts in spending on repairs, consultants, training, travel and uniforms.

A 10 per cent cut in salaries would have saved $37 million, with another $7 million clawed back from an end to overtime payments.

The Government also called for $25 million in savings through a hiring freeze, and an unknown savings through an incentive for early retirement.

The superannuation payments freeze was estimated to be worth $28.8 million and the social insurance payments moratorium would save $9 million.

Mr Burt said on Friday that the proposals represented “significant savings” that would help Curtis Dickinson, the finance minister, to meet deficit targets.

Mr Dickinson said during the last sitting of the House of Assembly that the island faced an “unsustainable” and “economically and fiscally imprudent” deficit this financial year.

Talks were launched by the Government earlier this month with the BPSU and the Bermuda Industrial Union.

Mr Dickinson said in an online forum on May 2 that public sector workers had not suffered salary cuts during the Covid-19 pandemic “whereas a broad swath of the community has”.

He said it was “not unreasonable” to expect concessions and said he would expect legislators and ministers to “follow suit with what the public officers do”.