Both unions and the government have to do a better job at analyzing their financial positions when it comes to their negotiations and how annual budgets will factor in their wage and benefit requests, former President of the Bahamas Institute of Chartered Accountants (BICA) Gowon Bowe told Guardian Business yesterday.
Bowe explained that the government’s payroll represents the largest expense in its annual budget, and contended that everything that comes with that expense has to be factored in, especially bargaining agreements and legal responsibilities.
There has been union unrest over the past few months, with junior doctors going on strike last week, claiming millions are owed to them in holiday pay.
In a meeting with union leaders this weekend, Prime Minister Dr. Hubert Minnis assured them that moving forward, discussions with them will become part of the government’s budget planning process.
“We want to learn from the past and make this kind of citizen dialogue happen in a proactive way,” said Minnis.
“Although union members were hoping to resolve individual issues, the purpose of Saturday’s meeting was to facilitate an open and frank discussion about the state of the economy, and to provide context for the government’s position. We recognize that finalizing all outstanding industrial agreements with the relevant unions is a pressing concern and those negotiations must be concluded.”
But Bowe questioned why these types of discussions were not happening regularly given the unionized nature of many public sector bodies and the high wage bill government is responsible for.
“Collective bargaining agreements and the terms and agreements set out in those is really what is going to drive your actual budget numbers,” Bowe said.
“A number of private business that have unionized employees… the first thing you look at when talking about your head count and head count costs is really, what are my responsibilities?
“The hotels in terms of their annual exercise look at what the costs will be. If it hasn’t been considered in the past as part of the budget exercise, why was it not?”
Bowe said he has long called for the government to treat these expenses as if they were a business. He said those estimates and assumptions that go into building the numbers must be part of the process.
“If the cost of your employee base is not factored in, then it is appropriate that it is now factored into that number because minimum wage, whatever the agreements say, will be critical assets to what can I afford,” he said.
He added that the unions also share in the responsibility to the fiscal policy of the country as well.
“I would say there is a caution on both sides in the sense that government certainly should have been doing an analysis that allows them to have the position they are currently in and where they want to be,” Bowe said.
“But equally, I would expect that the unions do a similar type of exercise, that they are not looking at it saying I haven’t had an increase in X number of years, because it shouldn’t be based on your years of seniority, it should be based on your actual job that you’re performing.
“And if you have not bettered yourself to move up in an organization, then there should not be an automatic expectation of an increase. Sadly I think a lot of the discussion has been around the cost of living and inflation over the years, but not looking at the individual.”