Government took on more debt to pay full cash April salaries
Senior Communications Officer in the Office of the Prime Minister, Nicole Mc Donald
The Government of Saint Lucia has puts itself further into debt after paying public servants their full salaries in cash for the month of April.
According to Senior Communications Officer in the Office of the Prime Minister, Nicole Mc Donald:
"The Government confirms that public servants were paid their salary in full cash payments today, April 23, 2020."
"In order for the Government to make the payment of salaries in all cash in April, the Government increased its overdraft and incurred further debt. The Ministry of Finance is currently dealing with compounding issues: extremely low revenue intake, significantly high debt repayments and additional financial resources which needed to be allocated to managing COVID-19, hence the proposal of a blended payment to public servants of part cash and part treasury bills.
The Government is still hopeful for support from the unions and the public service on the sacrifices that have to be made by all of us for Saint Lucia to survive this crisis."
Mc Donald says that what was proposed in discussions with the Ministry of Finance and the unions was paying the civil servants partly in cash and partly in bonds or treasury bills for a three-month period. This was determined to be necessary due to the fact that the government must conserve cash at this time in order for Saint Lucia to meet its debt commitments. To not do so would likely lead St Lucia to default, which would have even more dire consequences for our country going forward.
"It must be noted that the Government of Saint Lucia continues to dialogue with trade unions on the current economic crisis facing Saint Lucia and the world and the need to make drastic adjustments in the current COVID-19 Climate.
As the prime minister has said, at no time did the administration propose any form of pay cuts and the government is honouring the collective agreement with public servants," said Mc Donald.
Discussions are expected to continue with the unions and the special ministerial sub-committee set up by Cabinet which includes Minister of Labour Hon Stephenson King as chairperson along with Minister for Equity Hon Lenard Montoute and the Minister for Commerce Hon Bradly Felix.
As the prime minister has explained, the shutting down of borders and the partial scale down of our economic activity, as well as the additional costs to the health sector associated with the pandemic, has severely affected government revenues.
The prime minister will address the nation on this issue and will also speak to the impact on the economy of making the full cash salary payments in April.