President of the Grenada Trades Union Council (TUC) Madonna Harford has once again taken issue with the one-year old government of Prime Minister Dr. Keith Mitchell for not backing down on its stated policy to tax pensions.
Harford who was a guest on GBN’s “To The Point Program” last week Tuesday said pensioners who are now being called upon to pay personal income tax would have already paid the tax on their income while employed.
According to the female trade union leader and former Permanent Secretary, this has never happened from since colonial days under any previous administration.
“Pensions were always a non-taxable item. I am sorry to say that Dr. Mitchell will be a very unhappy man to know that his administration brought taxes on the backs of the pensioners,” she said
The TUC President indicated that most of the pensioners in Grenada are above the age of 60 years old and have to meet financial commitments for their medical bills.
“To be a pensioner and to have an ailment… it is not fair, it is not right for government to now come back and tax the pensioner,” she remarked
Harford explained that pension is not an income but money held back from an individual until that person reaches the retirement age.
The tax on pension of $3000 and above is part of the austerity measures implemented by the cash-strapped Mitchell government to correct a fiscal imbalance caused by government spending more than it is collecting each month in revenue.
The administration says it is collecting approximately EC$35 million and spending EC$50 million each month.
Of the monies collected 70% is used to pay salaries and wages and the remainder to finance the other areas of government operations.
The TUC has given support to the three Public Sector Union – Grenada Union of Teachers (GUT), Public Workers Union (PWU), and Grenada Technical and Allied Workers Union (TAWU) – for not accepting government’s proposal for them to accept a wage freeze during the life of SAP.
Harford who was instrumental in assisting the unions in drafting a new 16-point proposal for submission to government pointed out that the local trade union movement will hold Prime Minister Mitchell accountable for his word in giving a commitment that there would be no retrenchment during the duration of the programme.
Grenadian economist and senior lecturer at the Cave Hill campus in Barbados of the University of the West Indies, Dr. Brian Francis has predicted some lay-off in the public sector in Grenada as part of the addressing of the fiscal imbalance.
The Mitchell government has stated that it will primarily rely on natural attrition to reduce the size of the public service.
However, Harford does not believe this would go a long way in creating a dent in the size of the wage bill in the public service.
She believes that in this tough economic times, people who reach the mandatory retirement age of 60 may seek a further one year extension in the service.
Harford said there are still many people who would have had to renegotiate loans to undertake repairs on their houses that were damaged by hurricane Ivan almost ten years ago.
The size of the public service in Grenada is estimated at close to 7000 persons.