The Tillman Thomas-led National Democratic Congress (NDC) administration was forced for the second time for the year to make late payments to civil servants.
The government was forced to approach the state-run National Insurance Scheme (NIS) to provide some of the funds needed to pay out an estimated EC$24 million in August salaries to the workers.
A well-placed source told THE NEW TODAY that the NIS Board of Directors were called into an emergency session on Saturday afternoon to discuss a bail out package for the Thomas government.
He said the government did not borrow all the funds from the scheme but only a portion of the sum needed in order to get the local banks to start processing the pay slips for public officers.
This newspaper got hints early Wednesday that the administration was experiencing some difficulties in putting together the pay package for workers.
A government official explained that the Ministry of Finance has been forced in recent months to find more monies to pay the interest on the country’s national debts.
He said: “After (Hurricane) Ivan we got some relief on paying our debts. Whereas, we were paying interest at the rate of 2% or thereabout, we now are paying at the rate of 4%. So you can imagine we have to find almost double the monies that we used to be paying in order to service these debts. And these debt servicing payments have to be made every February and September. That is a lot of money to find to service your debts”.
Grenada’s national debt shot up from EC$373 million dollars in June 1995 when the New National Party (NNP) of Dr. Keith Mitchell took office to an estimated $EC 1.8 billion dollars when the administration was voted out of office in July 2008.
There are unconfirmed reports that some nurses and policemen did not show up to work on Saturday, alleging that they did not have funds to pay transportation.
Late Friday evening, as civil servants were turned away from the local commercial banks handling the account of government, the Ministry of Finance was forced to issue the following statement: “The Government of Grenada regrets to advise that the payment of salaries to public workers due today, August 31, 2012 has been delayed.
As of yesterday, Government pensioners and beneficiaries of Public Assistance have been paid. Government will provide an update on the payment of August salaries by early next week.
Government regrets the inconvenience caused by this delay and is working to resolve this difficulty in the shortest possible time”.
With the funds secured from NIS, the government on Monday issued another release to assure civil servants that the payments will be forthcoming.
The release said: “Further to the release on August 31, 2012, the Government of Grenada wishes to advise that the process of payment to public workers will commence tomorrow (Tuesday, September 04) and will be completed by Wednesday, September 05, 2012.
Government regrets the delay but wishes to assure all public workers that they will be paid by Wednesday, September 05, 2012.
As previously notified, Government pensioners and beneficiaries of Public Assistance were paid last Thursday”.
The Opposition NNP weighed in on the financial crisis facing the Thomas government with Former Minister for Finance, Anthony Boatswain saying that he was empathizing with the thousands of Government workers throughout the state who have been denied their monthly salaries at the end of August.
According to Boatswain, the Congress administration has once again demonstrated its inability to manage the country’s economy and its blatant lack of concern for Government workers.
The former Minister added that the Government should do everything to immediately meet their financial commitment to these employees and must never abdicate this responsibility, as most workers are dependent on their monthly salaries to provide basic needs for their families.
Senator Boatswain expressed deep concern about the Government’s ability to find the resources, based on reliable information received that the Government has approached the National Insurance Scheme for a bail out.
He said this is becoming a dangerous habit and the Government must not feel that it is acceptable to spend recklessly on travelling and incur other unnecessary expenses during the month and then to go begging to find the resources to pay it workers.
The NNP Executive member charged that excessive borrowing from the NIS can pose a major risk for pensioners and beneficiaries in the future.
“It can negatively affect the ability of the NIS to sustain itself and meet its commitments in the near future if their reserve is depleted”, he said.
Sen. Boatswain called on Government to immediately convene a meeting of the Parliament to review this financial crisis being experienced by the Government and to put an emergency spending plan in place to avoid similar occurrences in the future.
He said that no worker should be placed in a situation where they are uncertain that they will be compensated for their labour and suggested that the long term solution to this crisis must be government’s ability to grow the economy to ensure fiscal sustainability.