PRB’s Hidden Reality

The PRB salary table is a tell tale story of the ugly reality of Mauritius 53 years after independence

By Mrinal Roy

The country has buckled under the dire socio-economic consequences and costs of the Covid-19 pandemic. Tens of billions of Rupees of public funds have been used by Government to mitigate its adverse consequences andbail out distressed companies including some of the biggest conglomerates of the country. Various support measures to employees will cost Rs 12.9 billion to the public Exchequer by December whereas Rs15.9 billion have been advanced to the hotel industry from Mauritius Investment Corporation (MIC) funds. The economy shrank by 14.9% in 2020. Government is therefore desperate to see the economy pick up to shore up strapped public finances. The stakes are high. This is therefore not the time for financial largesse but for judicious and rigorous financial management of limited public funds.

Yet, the government has blithely announced last week that it had agreed to pay the new salary recommendations of the Pay Research Bureau (PRB) in full as from 1 January 2021 instead of the PRB recommendation of paying the new salaries in a phased manner over two calendar years as from 1 January 2021 andJanuary 2022.The yearly cost to public funds would be Rs 4.3 billion whereas for the period 1 January 2021 to 30 June 2022the total cost to the public Exchequer will amount to Rs 6.5 billion.

The PRB salary awards cannot be an opportunity for government to play Father Christmas nor obtain political mileage.

This raises legitimate questions regarding performance analysis, competence, accountability and transparency, cost benefit, efficiency and quality of services provided by government institutions, some of which are mired in controversy and key ministries which are the pillars of our welfare state.

Major trade unions representing government employees have been vocal critics of the tenor of the PRB report and questioned its independence. There is also a legitimate outcry at the smug boast and questionable claim in the report that the salary ratio of the General Worker to the Permanent Secretary (PS), ‘which was 1:7 pre-tax in the 2016 PRB Report has been brought down to 1:6.2.’ Is this a credible yardstick to measure PRB actions to bridge the wide disparity between the salary of the lower rungs of the civil service and those of the higher echelon of the government Establishment?

Apples and oranges

Looking simply at the salary figures in the PRB report, the ratio of the Rs 132,000 earned by a PS to the salary of Rs10,250 of the General Worker is more than 12:1 whereas compared to that of a Senior Chief Executive earning Rs 163,250, the ratio is nearly16:1.

How on earth can a higher increase of 10% on the salary of a General Worker earning Rs10,250 or Rs 123,000 in a year be compared with a 7% salary hike of a Permanent Secretary earning Rs 132,000 plus a wide range of benefits per month? It’s akin to comparing apples and oranges. The crying truth is that in absolute terms the salary gap is increased instead of being decreased. Such empty claims cut no ice among the people.

Is such a scale of inequality acceptable in Mauritius?

Is it acceptable that those earning up to Rs 10,250 (representing around 23% of the employees of the country according to income distribution data in 2020) eke out a living in a context of escalating prices of basic existential needs fuelled by the unchecked depreciation of the Rupee while the total income of the 5.7% of employees at the top of the income distribution accounts for a whopping 21% of total income for all employees which allows them to indulge in conspicuous spending and accumulate assets?

Is it acceptable that around 75% of employees earn up to Rs 25,000 and only account for some 48% of total income while the remaining 25% of employees (earning more than Rs 25,000) receive 52% of total income? Is this fair in a context when some 55% or the bulk of government revenue is collected from VAT paid by the multitude?

Holy grail

From a survey of the range of salary obtained at various echelons of the civil service hierarchy, it is obvious that the holy grail of a civil servant is to attain a salary of Rs 80,000 and above with the top job being that of the Secretary to Cabinet and Head of the Civil Service earning post PRB a handsome salary of Rs 213,250 plus a wide range of benefits. This stratospheric level of salary is a pipe dream for the majority of civil servants. Only a small percentage and presumably less than 3000 top brass of the civil service benefit from salaries of Rs 80,000 or above.

A closer examination of income distribution in the country in the private and public sector on the basis of 2019 data shows that more than 11% of the public sector employees financed from public funds earn more than Rs 50,000 compared to only 5.5% employees in the private sector which generates revenue from its entrepreneurialactivities. Unsurprisingly, the distribution of salary and benefits in the PRB report shows that it is patently skewed in favour of the higher echelon and top brass of the government Establishment.

Step back

We should also be reminded that while the post independence generation could certainly afford to buy land and invest in a house and a car (without obtaining duty free facilities), go on holidays from their savings and bequeath assets including land to their children, this is quasi-impossible for the young university educated cadre to do from his meagre savings in a context of continuously escalating land prices. Purchasing power and disposable income have been significantly eroded over time despite the official rhetoric and tom-tomming about being a high-income economy. This constitutes a major step back. It is an indictment of questionable policies promoted by successive governments during past decades.

How can such a situation be sustainable in a context of growing inequality and escalating real estate values across the country fuelled by generous fiscal largesse by government in support of promoters of Smart City and other property development schemes which allow the sale of a major share of their high-priced residential properties to foreigners? Such a policy is basically denying large swathes of mainstream Mauritians the unalienable right to buy a house or flat or buy land and build a house of their choice.

While presenting the PRB report last week, government said that the PRB will now be looking at a review of the salary and benefits of the President, Ministers and MPs, etc. In the light of relatively high salaries of the political Establishment in the country when compared to BRICS countries such as Russia, Brazil, India or China and the state of the economy in the wake of the Covid-19 pandemic, would it not be apt to freeze this salary review exercise in line with the highest norms of selfless service and patriotism to the country and the people?

Institutionalised inequality

The PRB salary table is also a tell tale story of the ugly reality of Mauritius 53 years after independence. It provides a snapshot of the difficulties and hardships faced by different categories of employees in the civil service to meet their existential needs and realize their legitimate aspirations. It lifts the veil on institutionalised inequality and the wide disparity between those in the lower rungs of the civil service and the higher echelons of the government Establishment.

The government has all the data available to analyse and have a comprehensive insight into this iniquitous and retrograde situation The role of government is to use its droit de regard to keep tabs on such realities and take urgent corrective policy decisions accompanied by the reforms required such as land reform to significantly improve the quality of life and standard of living of the multitude and provide them with the economic freedom necessary to make their free choices in pursuit of their loftiest aspirations.

* Published in print edition on 22 October 2021