(A GINA Feature)
THE YEAR 2008 was one of unprecedented macroeconomic and financial challenges, not the least of which was the historic rise in commodity prices in the first half of year, to which government responded with numerous interventions at significant fiscal cost.

This was followed in the second half of the year by the global financial crisis, the onset of recession in the major economies of the world, and a rapid receding of commodity prices.

Nevertheless, the government was able to maintain macroeconomic stability and overall expansion in the real economy. Price and exchange rate was also stable and the fiscal deficit was contained and notwithstanding the challenges, was still able to implement interventions, including increasing public service wages.

Minimum wages and salary increase
The government has, over the years, in seeking to offer Guyanese a chance of elevating themselves, steadily increased public service minimum wages. It moved closer towards it’s commitment to ensure progressive improvement in the disposable income of its employees, especially those at the junior salary scale level during 2008 as it effectively increased Public Service Minimum wages by more that 19 per cent.

This includes a five percent increase and the retention of the Temporary Cost of Living Adjustment (TCLA) of $4, 000. This is an adjustment in wages to offset a change in purchasing power, (inflation) as measured by the Consumer Price Index (CPI).

The TCLA was granted in May of 2008 when there were adverse macroeconomic conditions, such as the upward pressure on fuel and food prices as a result of global factors and when there was great uncertainty of relief from the external conditions. It was paid monthly and tax free.

Public servants, teachers and members of the disciplined services earning a basic salary below $50,000 per month benefited. This was taken into account after a five percent increase across the board was announced at that time too.

Upon the ascension of the People’s Progressive Party/Civic (PPP/C) to office in 1992, there have been steady increases in the minimum wages to afford public servants a better standard of living. Wages and salaries have grown from $3.2B in 1992 to more than $22B.

The minimum wage in 1992 was $3,137 which has been consistently increasing over the years. In 1999 the minimum wage was $15,000 which was raised to $19,000 a year later. In 2005, the minimum wage increased to $23,204, in 2006 to $24,828, in 2007 $28,415 and in 2008, to $34,055. The amount varies depending on public servants’ category.

Government’s decision to incorporate the TCLA allowance into the basic salaries of eligible beneficiaries, along with the five percent salary increase has the combined effect of increasing the gross pay between 18 and 24 per cent.

A practical example to illustrate this: Peter is a Government employee earning $28,415 in December 2007. After the five percent increase is added and the TCLA allowance is grossed- up for employee’s National Insurance Scheme (NIS) contribution and added on, the revised gross pay becomes $34,055. This reflects an increase of 19.8 percent from the December level.

For those public servants, teachers, and members of the disciplined forces who received the TCLA, taking into account the five percent increase and the grossed-up TCLA now incorporated into basic salaries, this is a reflection of a 24.1 percent increase.

Public servants earning $50,000 per month were not eligible to receive the TCLA, but benefited from the five percent increase. Approval was also granted for that to be adjusted upwards to 10 percent which was effective from May 2008.            

Increased Income Tax Threshold
The number of persons paying taxes is lessened every year as Government continues to increase the income tax threshold.

The income tax threshold increased from $28,000 to $35,000 monthly starting in January 2008. This is one of Government’s ways of ensuring that citizens’ lives are improved. Increasing the threshold level affords a person who earns a minimum salary more spending power.  This measure saw 36,000 employees being removed from the tax net.

A nation’s well-being depends on the performance of its economy and in the case of Guyana; it has constantly been evolving to record significant achievements which are serving to propel the nation’s development and to ensure a more sophisticated way of life for its people.

Such growth has been the basis for Guyanese being assisted with financial incentives and assistance in many areas.