PRB 2013 – An Alternative

By GP Ramrekha

The PRB Report 2013 on the revision of salaries to become effective as from January 2013 has in essence recommended an average across the board increase of 22% on the 2008 level of salaries, with some variations here and there. Why 22%? This is because the government has put Rs 4.2 billion to be distributed among the 90,000 or so civil servants and state pensioners for this exercise. The real increase of PRB 2013 salaries is very modest in view of the amount of price increases that have taken place during the intervening years from 2008.

The cry of indignation from low wage earners being granted sheer marginal increases far below the 22% average increase had to be expected. The protest movement is gathering steam and the authorities seem to have realized that meaningful and concrete action is now required to repair the damage. Tinkering with say Errors and Omissions will simply not address the structural weakness of the PRB Report 2013 recommendations in such a context.

It is unfortunate that the unions, at the head of the protest movement against the inequity of the PRB recommendations, have up to now not offered a viable alternative of their own to PRB director Aujayeb’s proposal. Everyone is fighting for his own patch. The real question is whether there is an alternative or alternatives to the current recommendations of the director of the PRB.

It is my view that the present report is but one approach to salary adjustment in the public sector and then an extreme one at that. Another extreme to consider is that all salaries could have been increased uniformly by a fixed sum, irrespective of grades. With Rs 4.2 billion in the pot, salary and state pensions could have been increased by Rs 3,800 a month uniformly, with both the humble messenger and head of the civil service getting the same increase. This alternative has the merit of reducing the high income gap in salaries in the present difficult economic circumstances especially for those at the bottom. The wide inequality in income that the PRB Report 2013 has reinforced is at the heart of current social debate worldwide. A survey in last week’s Economist emphasizes this point. In the past high salaries increase for top earners could have been justified when personal income tax rates were 60% and over for the higher income brackets. Now when personal income tax is uniformly 15% for all levels of income earners, the situation is different and there was no need to keep accentuating the big income gaps.

Anyway, everybody pays the same price for bread, butter and petrol and a fixed sum salary increase would be fairer towards all than the one proposed in the PRB report.

If the proposed alternative is not fully acceptable, a just and viable approach would be to base any increase in salary on a judicious combination of the two propositions: partly a fixed and partly a percentage increase. One possible approach would be to distribute half the pot Rs 4.2 billion equally among all grades and the other half as a fixed percentage, namely an increase of 11% across the board on the salaries of 2008.

The three possible outcomes, including the PRB Report 2013 recommendation, are given below with the effects on two levels of salaries at either end of the salary spectrum, namely Rs 7,000 and Rs 125,000 a month.

Now might be the time to question the practice of extra payments reserved for the lucky few in terms of housing allowances, responsibility allowances, entertainment allowances and clothing allowances, etc. What is the rationale for paying a housing allowance for a 9 am to 4 pm job in Port Louis? Why not extend this facility to everybody? As the saying goes, sauce for goose is sauce of gander. All PS derive considerable income from attending various committees which are mostly held during normal working hours. If these allowances cannot be suppressed, they could at least be frozen at their 2008 level.

Government should seriously consider setting aside the PRB Report 2013 and adopt either of the two proposals as shown in the example above in the name of fairness and equity.

(Retired Civil Servant)

* Published in print edition on 27 October 2012

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