Budget Speech 2014: Major pay raise to take effect next year |11 December 2013
The government has announced a national salary increase of between 10 and 20% effective January next year.
It will also establish a new Public Service Salary Table which will replace the current Wage Grid.
These announcements were made by the Minister for Finance, Trade and Investment Pierre Laporte when delivering his budget address for 2014 in the National Assembly yesterday morning.
He said increases being proposed will ensure a proportionate increase in the salaries of all individuals across government.
Therefore with effect from January 2014, the minimum wage for all workers other than casual workers will increase by 20% from SR22.25 to SR26.70 per hour or from SR3,375 to SR4,050 per month (based on a 35 hours’ work per week). The rate for casual workers will rise from SR25.65 to SR30.78 per hour.
Minister Laporte pointed out that through the lowering of business tax to 30% for most medium sized businesses, this will allow the private sector to absorb the increase minimum wage, without the need to increase the cost of goods and services.
With regard to salaries in the public service, Minister Laporte said as from January 1, 2014 these will increase and will be based on the existing salaries as at December 31, 2013. The enhancements will be as follows:
• Employees from SG1 to SG4 on the government wage grid will receive salary increases of 20%;
• Employees from SG5 to SG8 will receive salary increases of 15% ;
• Employees from SG9 to SG12 will receive increases of 10%;
Home carers will also receive an increase of 20%.
These increases in public service salaries, constitutional appointees, and others like home carers, will cost government R131.5 million, of which R101 million will be for ministries and departments and R30.5 million for budget dependent agencies.
“To absorb these significant salary increases and other raises in benefits, the government has decided to review its recruitment policies in 2014,” Minister Laporte said.
He explained that a thorough manpower budgeting exercise will be conducted during the coming months to review the structure of all government ministries/department/budget dependent entities.
“Government expects that through the salary enhancements public servants will become more productive and hence minimise the need for additional recruitment,” he stressed.
Addressing salary increases in public enterprises Minister Laporte noted that over the years, because public enterprises were accorded more autonomy in setting their salaries, and since salaries of constitutional appointees were fixed under the law, the gap between salaries of public enterprises and constitutional appointees has widened significantly.
“To address this anomaly, government has decided to cap salaries in all public enterprises to be consistent with the new Salary Table,” said Minister Laporte.
He said commercial enterprises will continue to be allowed to give other benefits such as bonuses. However, this will be subject to new policies and guidelines.
Alongside the national salary increases, Minister Laporte also announced increases in the various benefits and allowances as follows:
-Orphan Benefit R80
-Invalidity Benefit R140
-Injury Benefit R130
-Survivor (widows) Benefit R130
-Sickness Benefit R130
-Maternity Benefit R130
-Retirement Pension R200
Minister Laporte explained that the impact of raising those benefits on the 2014 budget will be R25.2m.
With regard to increases in allowances Minister Laporte said an increase of R100 per month on allowances of apprenticeship and post secondary institutions is being proposed with a total impact of R4.9 million on the 2014 budget.
Housing allowance for graduates will be increased by 50% in 2014 relative to the current level, from
R2,000 per month to R3,000 per month.
As to the new Public Service Salary Table, Minister Laporte said this will determine salaries of constitutional appointees and the public service.
“Government will shortly present details of this new structure to the National Assembly and seek approval for this structure through new laws and amendments to existing laws,” the minister explained.
He said new Salary Table will provide a fair and transparent mechanism for salary management in the public service.
The new Salary Table will become fully effective for the Judiciary from July 1, 2014. For Constitutional Appointees other than the Judiciary, it will become effective in two stages; they will receive the first increment from July 1, 2014, and the second from December 1, 2014.
Minister Laporte explained that the increases in salaries and allowances are the fruits of the economic reforms which the Seychellois people have made numerous sacrifices and gone through great pains to sustain for five years. He noted that while there have been salary increases in recent years, these have lagged behind inflation.