The Cayman Islands government has reinstated the 3.2 per cent cost of living allowance it deducted from civil servants’ salaries last year.
Public sector workers will see a 3.2 per cent pay increase in their salaries on their next pay day, in time for Christmas.
Acting Deputy Governor Franz Manderson notified civil servants Monday that the cost of living allowance, which was removed from their salaries in July 2010, would be re-instated for the 15 December payday and would be effective from 1 December.
Premier McKeeva Bush, who is also the Cayman Islands’ Minister of Finance, said in late August that a modest pay raise for government workers was possible since Cayman ended the last budget year with a $25 million operating surplus. In his Strategic Policy Statement on 1 December, Mr. Bush announced the government was facing a $4.5 million operating deficit for the current financial year of 2011/12.
Commenting on the reinstated allowance, Mr. Bush said: “If you recall, when we were considering reducing salaries, I offered a 15 per cent salary reduction of the highest paid Civil Service posts all around and 5 per cent at the low end. No one agreed with that. What was offered was the 3.2 per cent, so I had to go along with that, but I have always said that any reduction in civil servants’ salaries is money taken out of the Cayman economy and I said that when it was possible, the 3.2 per cent would be reinstated.
“Times are difficult for everyone and civil servants are no different than other people. I’m happy it is possible to reinstate the 3.2 per cent COLA. This was something we had to take from them because the last government made such a mess of public finances. We must still be prudent and watch our expenditure. I believe that God will help us through these difficult times.”
President of the Cayman Islands Civil Servants Association James Watler said the association was pleased the government had found itself in a position to reinstate the allowance and was meeting its commitment to factor it back into public sector workers’ pay packets.
“We do welcome it, especially at this time when the cost of living has surged over the past couple of years to new heights. We take this as a sign that the government accounts have been strengthened through the many cuts the Civil Service has implemented over the last few years and from the plethora of cost saving suggestions and recommendations that was provided by many of you,” Mr. Watler said in a statement to civil servants released Monday afternoon. “Obviously these suggestions and recommendations that were taken on board have paid dividends.”
He said the association’s management council urged civil servant to continue to keep their eyes on the bottom line and keep finding ways to economise and increase efficiencies.
“The global economy is still very unsettled so therefore we must be vigilant and continue to be mindful of our very vulnerable situation. We must continue to motivate and encourage each other, working together both corporately and personally, for the betterment of other civil servants, our nation and our fellow citizens,” he said.
Mr. Watler thanked civil servants who had to accept the cuts but who had not compromised the integrity of their work. “You sacrificed professionally by cost cutting as well as personally doing more with less because of the salary cuts but also emotionally; finding ways to cope despite the high cost of living, the umbrage of persons in jobs even more exposed to the financial downturn than ours, many of whom do not appreciate how uncompetitive your monthly salary is compared to what you could be making in the private sector had you chosen a different career, and the other stresses that were compounded by this pay cut. You stepped up to the plate and made the sacrifice that you were called upon to make,” he said. He described the cost cutting within the Civil Service as a “painful exercise”.
The government estimated in June last year that the removal of the cost of living allowance would save Cayman $5.4 million in the 2010/11 financial year. That reduction moved civil servants back to the salaries they were receiving in 2007.