Finance Minister Bob Richards said no civil service jobs would be lost, but shorter work weeks and pay cuts are on the table. *File photo by Kageaki Smith
Finance Minister Bob Richards said no civil service jobs would be lost, but shorter work weeks and pay cuts are on the table. *File photo by Kageaki Smith

WEDNESDAY, JAN. 16, UPDATE 4.00PM: Government is set to have discussions with the various civil service unions on ways to cut payroll.

Government will also have to raise the debt ceiling and borrow more money in 2013-14, but six measures are being put in place to turn things around.

Finance Minister Bob Richards said no jobs would be lost, but shorter work weeks and pay cuts are on the table.

He said net public debt was up 23 per cent.

Mr Richards added that Government will have to raise the debt ceiling and borrow more money in 2013-14 to make ends meet.

He said: “I regret to report that under these circumstances further borrowing will be required. Therefore, the legally binding debt ceiling will have to be raised during the upcoming budget session. A number has not yet been set, but it will be accompanied by new rules and plans to make it a meaningful ceiling, rather than a meaningless one that is ratcheted up every year.”

The Minister declined to say how much money Government will have to borrow, but it will be revealed next month when the Budget is released.

Problem

Minister Richards said part of the problem is that it is going to take a while to turn Government’s spending and revenue. “46.8 per cent of government expenses are related to employee compensation and benefits. While keeping our promise not to lay off any civil servants, the situation calls for shared sacrifice. Cabinet has led by example by taking a pay cut and we will be commencing discussions with the relevant unions to identify strategies to reduce personnel costs throughout government, including Quangos.”

He did not want to go into details as to ways to decrease payroll as talks with the unions have not been held.

Minister Richards: “I can’t really go into that at this point as one has to be respectful of the unions. The strategies we have to talk with them about, we’ll talk with them one-on-one.

He said payroll cuts and freezes are on the table. Mr Richards said he “expects” reduced work weeks will be under discussion as well.

Read the full remarks HERE.

Read the 2012 Mid-Year Review HERE.