Dr Anthony has, deservedly some might think, received a fair amount of stick for his policies, his lack of effective action and the introduction of VAT. He does, however, deserve our admiration for the way in which he has persevered in his single-minded implementation of an equitable, efficient tax collection system that the world financial community has deemed necessary if St Lucia is to receive continued support from institutions like the IMF and World Bank.
Dr Anthony has staked his political future on the success of VAT. Few politicians have shown such courage and determination in the face of such compact, nationwide skepticism and fear that VAT has engendered.
But the introduction of VAT is only one of two essential reforms that need to be undertaken in order to put our island’s economy on a strong footing. Dr Anthony has to tackle the question of Public Service Reform, just as nations across the globe are doing. VAT alone will not solve our problems. Public spending must be cut.
All too often in countries everywhere, politicians have taken the easy way out and increased government spending without ensuring higher government incomes. The public service payroll in St Lucia has grown, effectively, by over 37 million dollars thanks to the 2,000 or so people who are now receiving wages through non-productive programs such as STEP and its like.
Financing additional programs by introducing new taxes increases the burden on the people unfairly; costs must be cut simultaneously. If we have 100 dollars deficit, we need to raise 100 dollars somehow; if we cut our costs so that our deficit is only 50 dollars, we only have to raise 50 dollars. The government must take a two-pronged approach: raise taxes, cut costs.
Let’s cross the Atlantic and take a look at how a small nation, Ireland, is tackling the vexatious problem of Public Service reform that is changing the Public Service in terms of the way its people are managed, how it is organized and how it manages expenditure. The report states, “None of us can escape from the challenges we face as a country to restore the public finances to a sustainable footing. We remain reliant on funding from the EU and IMF to fund public services and pay people’s wages, pensions and social welfare benefits.” St Lucia and Ireland are in the same boat, and it is taking in water so badly it will be impossible to bale out fast enough unless the holes are plugged.
The Irish Public Service Reform Plan of November 2011 sets out key commitments and actions for change across the Public Service under five central themes: Placing customer service at the heart of everything; Maximizing new and innovative service delivery channels; Radically reducing costs to drive better value for money; Leading, organizing and working in new ways; Focusing strongly on implementation and delivery.
Reducing the cost of the Public Service pay bill is a key objective. Much of this will be driven by the reduction in Public Service numbers, which the Irish plan to reduce to 282,500 by the end of 2015 from a peak of 320,000 in 2008, or 12% approximately. There has been a reduction of 28,000 staff since 2008.
This bold initiative by the Irish government shows a determination to cut wage costs, but it does not mean that new initiatives are stifled through the lack of staffing. Flexible redeployment arrangements ensure that staff resources are being assigned to where they are most needed to meet operational priorities, eliminating the need to recruit new staff and securing substantial savings.
Legislation for a new single Public Service pension scheme has been passed. The new scheme will (i) introduce a career average pension scheme; (ii) index pension accrual and pension increases to the consumer price index and not pay; (iii) increase the pension age for all new entrants to the service thus significantly reducing future pension costs.
The agreed standardization of annual leave will eliminate many of the anomalies that exist under the current leave arrangements by having the same cap on the leave allowance for different public service employment groups. This will lead to greater uniformity of terms and conditions and enhance the fluid movement of staff between different sectors.
The Labour Court has issued a recommendation on management proposals on a revised sick leave scheme for the Public Service. Under the new arrangements, the amount of paid sick leave that may be granted will be halved and effective policies for the management of sick leave will be implemented. This will result in greater productivity, less absenteeism and a significant reduction in the cost of sick leave to the Exchequer.
New roster arrangements will ensure more police are available for frontline duty at peak hours. Additional working hours are being implemented in schools and universities resulting in fewer in-house training days and more teaching hours. Outmoded practices such as bank time and privilege days have been abolished from the Civil Service.
Proposals for mobility between the public and private sectors were recently agreed. The Career Break Scheme will permit participants to take up paid employment in Ireland for a career break duration of three years with an in-built review after three years. In addition, a scheme to permit one-year exchanges of staff between the Civil Service and the private sector will be put in place on a pilot basis.
The Government has agreed a strategic mandate on Shared Services, which will reduce duplication, streamline business practices and reduce transaction times. The use of Information and Communications Technology will maximize new and innovative service delivery channels to deliver better services and information in a more cost effective manner. External delivery, or outsourcing, will be considered as a means of delivery for any proposed new services. Work has also commenced to identify non-core activities that may be suitable for external delivery; a shortlist of potential projects has been developed by the four major sectors of Health, Justice, Education and Local Government.
The creation of a government performance measurement system in the areas of agriculture, enterprise, transport and public works aims to set out performance information for each program on the basis of four questions: What has been done? How much did it cost? What was achieved? How does Ireland compare internationally? One of the core aims is to ensure the information is as accessible as possible for the citizen.
Savings on a range of goods and services procured across the Public Service are to be maximized by the mandatory use of the National Procurement Service. Proposals are being developed to reform the management of the State’s property portfolio and to make savings on leasehold expenditure.
The common theme running through these initiatives relates to securing greater openness and transparency, enhanced accountability and thereby leading to more effective public governance. A comprehensive approach is proposed to the definition of lobbying to shed greater light on the question of who is lobbying whom about what.
The introduction of comprehensive whistleblower protection legislation is central to more effective management and early amelioration of risk, both in the public and the private sector. Whistleblowing should be encouraged and promoted; the need for protections against reprisals is a safety net when the whistleblowers, rather than the information they have disclosed, become the primary focus of attention. The Ombudsman’s jurisdiction will be extended to all public bodies.
The Ombudsman plays a central role in seeking to ensure that administrative decision-making is fair and robust in all circumstances. The Public Service Reform Plan contains a strong commitment to strengthening Civil Service accountability.
St Lucia, like Ireland, needs a Public Service that can lead our economic recovery and meet the needs of our people in the years ahead. The implementation of a Public Service Reform Plan must fundamentally change how we manage people, how we are organized and how we manage expenditure.
The introduction of VAT is one step in the right direction; it is designed to increase government income. The reform of the public service is an essential second step if Dr Anthony is to reduce government expenditure and get the economy on an even keel.
Initiatives in the Irish plan, such as Outsourcing, Career Breaks, External Delivery and Shared Services, point the way to offloading public service costs efficiently whilst protecting employment and stimulating the private sector to rebuild an ailing, perhaps terminally ill, economy.