Interview by the Minister for Finance, Economic Planning and Trade Naadir Hassan following the budget address |13 November 2021

Minister Hassan speaking during the interview with the media (Photo: Jude Morel)

‘No raise in salary for public servants over next year’

Following the 2022 budget address yesterday morning, Minister for Finance, Economic Planning and Trade Naadir Hassan met with media representatives in the afternoon at Liberty House, for clarifications on the proposed budget.

In starting, the minister explained that the R95.5 million allocation to Etihad does not go directly to Air Seychelles as support for its operations, but to start paying off the debt that it acquired.

“Air Seychelles had two debts – one to Etihad itself and the other to bond holders. As announced earlier this year, government negotiated a discount on the Etihad debt, or bought the debt at 79 per cent discount, so now, Air Seychelles, through government, owes Etihad US $11.5 million by virtue of purchasing that debt, for the shares to return to government. It is around R95.5 million for this year,” Minister Hassan noted.

With regard to the increase in retirement age from 63 to 65 years by 2023, he highlighted the urgency in doing so to prevent the Seychelles Pension Fund (SPF) from collapsing.

Government earlier this year implemented measures to incentivise private pensions.

He also explained the rationale behind the announcement that there will not be any salary increments for public servants over next year.

“The increase in pension age will happen in 2023. We understand that some people are not able to work above 60, and we made provisions for a staggered approach. You can retire at 60 years, but of course with a lower amount. The closer you are to 65 years, the more a person will get in terms of the total amount for the pension”.

“Where we have come from and where we are today, and with no employee having their salary cut, this is an achievement in itself. What we are saying is that we are still in a deficit budget and it has reduced significantly, and we are now forecasting that if we remain on the same trajectory, by 2023 or 2024, we anticipate having a surplus budget which will give us the fiscal space to adjust salaries,” the minister added.

Considering the demand for housing and accommodation which cannot be met by government, government has in the 2022 budget made provisions through a public private partnership (PPP) with Green Island Construction Company (GICC) for housing solutions to young professionals.

“As it stands today, government lacks the budgetary resources to take out additional loans or spend directly from the budget, so we need to find other means to achieve the same objectives, but in a manner which does not financially impact on the budget in the short-term. We are also inviting other banks and interested investors to come forward. There is a great demand for housing today and government itself lacks the resources to build, so government is saying that it is focusing more on low-cost housing for persons who cannot afford 100 percent, but these schemes are self-financing.”

“Graduates can get a loan at 5.5 percent interest over 30 years which makes it affordable so you self-finance. The bank provides finance for the build, instead of having to wait for government to build,” he added.

The minister also spoke about the reduction in business taxes, to promote the growth of the private sector, which will eventually result in the creation of employment and better remuneration for employees.

Laura Pillay