Memo from public sector unions on talks with interim government over issues

Here is a memo on the points discussed by Fiji's public sector unions, the Public Service Commission and government officials on Monday. This was provided by Intelligentsiya agent Keep The Faith:

CONFEDERATION OF PUBLIC SECTOR UNIONS

G.P.O Box 1405, Suva, FIJI Ph:(679) 3311922 Fax: (679) 3301099 E-Mail: fpsags@is.com.fj

Fiji Nursing Association (FNA), Fiji Public Service Association (FPSA), Fiji Teachers Union (FTU),

12^th February, 2007

The Confederation of Public Sector Unions (FPSA, FNA & FTU) met the Chairman PSC, Acting Permanent Secretary Finance & National Planning and his senior officials at 10.30am this morning and discussed three (3) items on the Agenda.

(i) Compulsory Retirement Age Policy

(ii) Pending issues, under the Partnership Agreement and

(iii) Civil Service Pay Cut

REDUCTION IN RETIREMENT AGE

The Confederation's stand on Retirement Policy remain as previously reported. However, the Public Service Commission has already submitted a Cabinet paper on this issue and it will be discussed in tomorrow's cabinet meeting. The Confederation, will therefore, await the result of the Cabinet decision. The Commission predicts that it would save $10 million and about 3000 established and unestablished staff are over the 55 years of age.

WITHDRAWAL OF PARTNERSHIP AGREEMENT

The Chairman of the Commission told the Confederation that government wanted to withdraw from the Partnership Agreement and re-negotiate another agreement. He stated that the arrears of approximately $80 million owed under the Partnership and Memorandum of Agreement signed in April, 2006 with the SDL government cannot be met by the interim government because of its current financial position and downturn in the economy.

The Confederation stated its position that the Agreement was non negotiable but gave concession that payment for this year can be deferred but a time frame for the payment under the agreement should begin from next year or 2008 onwards. The Chairman suggested that arrears of $9million for 2003 be withdrawn from the Memorandum of Agreement and the remaining payment be deferred indefinitely. The Confederation rejected this offer from the Commission.

However, since no clear agreement could be reached in the negotiation process it was agreed that PSC will submit a proposal to the Confederation regarding the Partnership Agreement. The Confederation made its position clear to the Commission that it will oppose any move by the interim government to withdraw from the Partnership Agreement. It reiterated its stand that international convention must be observed as agreement signed by any government must be honoured by any incoming government or regime. It further stated that interim government's refusal to honour mutual agreement would send wrong signals to the investors that agreements entered or undertaking given by the government can be withdrawn at its own whim.

The Confederation now awaits PSC's proposal on Partnership Agreement.

CIVIL SERVICE PAY CUT

The Confederation has requested current update on government financial position before the meeting. Mr Aisake Taito, the Acting Permanent Secretary from the Ministry of Finance & National Planning gave overview of current government financial status particularly giving projection and forecast in various sectors as follows:

(i) He stated that declining visitor arrival is forecast at 5.3%. Earnings from Tourism was reduced from $960 million to $888.1 million, a decline of 7.5%. The overall decline in the tourism industry is expected to be 17.6% from a growth of 14% as projected in 2006 precoup.

(ii) On Sugar Industry, he stated that revenue from Sugar was expected to decline by 5.2% to $229.3million from $241.8 million. Further decline is expected to reach 15%.

(iii) The expected loss of revenue from the closure of Vatukoula Gold Mine is forecast at $65million which is 3% of GDP.

(iv) Job advertisement has been reduced by 3%.

(v) Local investment has declined from 18% of GDP and revised downwards to 13% to 14% of GDP.

(vi) $200 million is forecast for shortfall in revenue.

(vii) GDP growth was expected to increase by 2% but has now under a revised forecast is -2%.

The Chairman, Mr Rishi Ram said that interim government expected to cut down on cost and other measures such as Permanent Secretaries salary will be starting from $73,000 to a maximum of $96,000 compared to $120,000 per annum for the CEOs. He also stated that interim government plans to generate more export so that foreign reserves can be maintained at the current level.

Mr Ram also informed the Confederation that Cabinet Ministers have already taken a pay cut from $80,000 to $52,194 with only two perks which includes $10,800 housing allowance and $6,000 entertainment allowance.

The Confederation had suggested national savings from other sources to be taken into account as follows before the interim administration looks at civil service pay cut.

1. UNFILLED VACANCIES: At any time, the Public Service has approx 8% to 10% of posts not filled, amounting to 2000 to 2500 vacancies, some for lengthy periods of several years. The Budget continues to make allowances for these established numbers, year in year out. Strictly speaking unfilled posts should mean unspent salaries etc and other related resources, e.g. office, equipment, vehicles, FNPF etc. These cost savings must also be accounted for. Where have they gone?

SUGGESTED REMEDY (1): PSC should identify vacant posts in all Ministries or Depts at all levels. Those unfilled for a significant length of time, e.g. 2 years or more, should be scrapped and funds saved to be identified. Posts unfilled for one year or less should be put to strict audit to justify them, then abolish them by next Budget. Any request for new posts in future to be justified anew by the requesting authority. Adjust the approved Budget costs accordingly.

2. CURRENT STAFFING LEVELS : There was a steady influx of unchecked recruitments since the 1987 coups, including temporary, relieving or retired staff, some via affirmative action programme or other causes, all without much accountability. Thus some Ministries & Depts would be overstaffed, others may be understaffed. These status are reflected in complaints about staff and service from all directions.

SUGGESTED REMEDY (2): Complete 2003 JER and implement it strictly in line with agreed MQR. Those not meeting the MQR to be subject to strict audit and given a time line to comply or face re-deployment (see below). Then adjust Budget costs accordingly.

SUGGESTED REMEDY (3): Take an immediate census of all staffing levels in line with approved existing established figures. Those common user posts found to be surplus in one area are to be transferred to under-resourced areas. Further savings may be made by application of finished JER MQR requisites. Then adjust Budget cost figures proportionally.

3. GRANTS, REFUNDS & SUBSIDIES: Each annual Govt Budget contains huge grant and subsidies etc to organisations like Provinces, Religious bodies, social & sports bodies, USP, schools etc. Some may need urgent review to ensure all conditions are complied with. Some have their own sources of income and should not be subsidised.

SUGGESTED REMEDY (4): All such outlays and expenses should be scrutinised and those falling outside the judicious scope of due diligence and accountability should be reviewed and/or discontinued.

SUGGESTED REMEDY (5): Amounts allocated in current budget should be halted until full acquittals are provided for all past periods. Further scrutiny and inquiries should be instituted. "User pay" principle applies.

4. WASTAGE, UNWANTED LUXURY etc.These are recurrent stories that are well known all over Fiji . They are a good target to aim for during this exercise.

GOVT VEHICLES - SUGGESTED REMEDY (6): Drastically reduce high level of expensive vehicles through the Public Service, introduce car pool system at all levels, allow taxi usage within urban areas.

OVERSEAS TRAVEL - SUGGESTED REMEDY (7): Reduce level of superior class air travel by the Public Service officials.

5. RENTED PROPERTIES: Previous PSC Chairman identified millions being spent in rents each year. The budget spent on space rental can be better utilised by building and owning own infrastructure in a pooled and centralise manner.

NOTE: Up to Independence in 1970, all Govt Depts were housed under one roof at Govt Buildings.

SUGGESTED REMEDY (8): Take proper audit and identify wastage in overused or underused rented properties. Investigate improper rental agreements etc and rectify. Allocate same Budget amounts for plans for a progressive building project.

6. CIVIL SERVICE FRAUD: The Govt continues to suffer from small or large frauds of all types and at all levels and to a great and repeated extent. Nothing concrete has ever been done about it. More teeth & weapons are needed.

SUGGESTED REMEDY (9): Adopt policy of "ZERO TOLERANCE". Publicly expose all confirmed cases.

SUGGESTED REMEDY (10): Introduce widespread internal and external audit systems using existing resources at more regular intervals, in addition to the powers and tasks of the Auditor General.

SUGGESTED REMEDY (11): Delegate more powers for penalties, surcharges and recovery action all more effective levels. Surcharge full amounts, those exceeding current salary levels to be cleared in full within 4 years.

SUGGESTED REMEDY (12): Empower Auditor General to levy charges and penalties at source and to recommend options for higher level offences.

7. FEES & LEVIES: Interim Attorney General has identified many areas where fees for Govt services are outdated by decades. These need a swift and coordinated and consolidated review and implementation

SUGGESTED REMEDY (13): Remove all manual work, introduce reliable electronic equipment to speed up service on the spot, no waiting, no queues.

SUGGESTED REMEDY (14): A neglected area - Incoming VISA/PERMIT Fee. Fiji nationals when travelling overseas pay at average rate of F$100 per visa per person per visit. They are trapped, no pay no visa. On the other hand, nearly half million visitors walk into Fiji ports for free without paying a single immigration fee. Thus Fiji is on justified grounds to charge them a few for permit to land and stay in the country, even for visiting/tourist purposes.

Targetted Revenue via Immigration Permit Fee:

Year 1 500,000 visitors x $20 each = $10,000,000

Year 2 550,000 visitors x $30 each = $16,500,000

Year 3 600,000 visitors x $40 each = $24,000,000

Year 4 650,000 visitors x $50 each = $32,500,000

NOTE: Fiji passport holders will be exempt.

NOTE: Departure tax will apply to all departing is for separate purposes.

PAST NATIONAL FRAUD: Millions have been lost through systematic looting of the nation's coffers in the past, e.g. National Bank, Agriculture scams etc. It appears that powerful sources have colluded to deny us the justice. The "clean up" campaign should revive such cases for possible recoveries

R Singh

CHAIRPERSON