BASSETERRE, St. Kitts – TALK of the recently-announced payment of double salary by the Government to civil servants is still making its rounds, and questions are being asked about whether or not the hierarchy of priority of needs was considered when the decision was being made.
Social commentator and former Minister of Government, G. A. Dwyer Astaphan – in an interview with this media house – explained that he is in no way making any argument against the payment of double salary. But he questions whether or not alternative measures of bringing financial relief to the people of St. Kitts and Nevis were considered when this particular decision was made.
“…I don’t know if the government has taken this approach but I believe it is time that when a government is contemplating things like this, it should do it within as broad a context as possible to see if there are other ways in which relief can be brought, not just to public servants but to the public generally, without doing any fiscal harm to the government.
One such suggestion made by the former Government Minister is an adjustment in the VAT (Value Added Tax).
“The government’s performance on VAT collection since the introduction of VAT in 2011 has been very strong. Can the government afford fiscally to reduce the VAT on all consumables, not just a VAT free day one day a year, and not to remove the VAT entirely but to reduce the VAT on a year-round basis to put more money in consumers’ hands? And more money in consumers’ hands means more spend in the economy which means you have a continuing and maybe even and increased income to government and its agencies. So the double salary can be an alternative, it could be additional to that as well. And I don’t know if they are thinking like this.”
Still on the VAT issue, Astaphan explained that if an item is bought for $50,000 and attracts a 40 percent duty charge and a six percent Customs Service Charge, VAT is calibrated against the full sum rather than against the original price of the item.
His suggestion is, if the VAT is calibrated differently, this could being relief to the people of the Federation.
“That is charging tax on tax which I don’t think is proper… If the VAT is properly applied and they change the law so that the VAT is calibrated against the CIF cost of the goods, then the government can save consumers a significant amount of money. And that saving would ripple out into the economy and bring savings to everybody.
“So while I don’t have any argument against the double salary, I am asking whether it is considered in isolation along with the political capital that you can gain, the economics of it…and stimulating activity, albeit for a short time or have more long term arrangements that can bring consistent benefits.”
While reiterating that he is not making any argument against the payment of double salary, Astaphan questioned whether or not the money could have been used to produce life-saving equipment for the hospital, to advance water-conservation efforts, bolster the crime fight or assist with the construction of a new Basseterre High School.
“…Given that the Prime Minister has said time and again that the economy is in a healthy state…or even if it is not in as healthy a state as he claims, is this the highest priority in so far as spending that $15M is concerned by the government... For example: What would the Basseterre High School cost? $15M, $20M, $30M? This could have gone a long way towards that unless they would have already secured the funds for that. What about an MRI for the hospital or other life-saving equipment and critically needed things in the health sector? I am not arguing against the double salary; I’m asking if it is being considered in the hierarchy of priority for the country on an ongoing and long-term basis.
“Or things in education or things for national security or watershed management, soil conservation, coastal things… they are having a lot of problems with environmental matters now. You see how the weather is changing? There are a number of other serious issues that should be at the forefront of the government as it deliberates on these things and I don’t know if the double salary was decided upon on the basis of considering all of these other phenomenon or on a narrow basis.”
