EDITORIAL: Public needs answers on giant salary mistake

Like many residents, we are dumbfounded.

We cannot even begin to understand how the government’s laudable attempt to update all public officers’ salaries to a “living wage” misfired so badly that an initial $10 million estimate ballooned overnight to some $25 million.

But now that the error is known, officials from multiple government agencies should work with the consultant involved to conduct a rapid, comprehensive and transparent assessment of the problem.

That way, policymakers can offer realistic solutions for the way forward.

Given the scale of the mistake, these solutions could well involve costly, painful choices for the territory’s approximately 2,500 public officers, one in five of whom were previously paid below the “living wage” of $23,719.80.

But they won’t be the only ones affected. Indeed, the continued health of the VI’s 2024 budget, and therefore the well-being of all VI residents, depends on understanding the mistake.

In his November budget address, Premier Dr. Natalio “Sowande” Wheatley, who is the minister of finance, said the 2024 budget would include about $377 million in recurrent spending. That included some $160 million to be spent on “employee compensation.”

The stakes, then, were already high even before the government revised its salary schedule on March 31.

Supposedly, the move was based on recommendations from a Trinidad branch of PricewaterhouseCoopers, the consulting firm that government paid more than $300,000 to carry out a “Compensation Review and Job Classification.”

Aside from defining the living wage, the exercise compared public officers’ salaries to private-sector salaries; researched the cost of living in the territory; and suggested tweaks to the government’s system of allowances and benefits.

The consultant’s 103-page report also offered three options for a wage increase for public officers.

A $25.9 million option required a 17 percent hike in salaries at all levels to bring up the lowest earners to a “living wage.” A $9.45 million option, based on raising salaries at all levels to meet “industry salary averages,” required a six percent increase all around. A third option, costed at around $5.4 million, called for an “approximately 45 percent increase to median salaries for specific positions within targeted industries.”

Dr. Wheatley said last November that the 2024 budget would include around $10 million to pay for the planned wage increase.

Why, then, is there now a roughly $15 million gap between that initial projected cost and the actual cost, and why didn’t officials catch the discrepancy before authorising the increase? That remains to be seen.

Earlier this month, Dr. Wheatley blamed the variance on “a number of problematic assumptions” made in the consultant’s report.

This excuse falls flat. True, the report uses technical language that is unclear and confusing at times.

But the government — not the consultant — was responsible for carrying out due diligence, analysing the numbers, and deciding the way forward for the increases.

The current predicament suggests that the government failed at this task with flying colours.

Perhaps most disturbing is the lengthy list of officials and agencies that should have reviewed the plan and flagged the variance. Besides Dr. Wheatley, this list includes the Ministry of Finance, the financial secretary, the Department of Human Resources, the Deputy Governor’s Office, the Governor’s Office, Cabinet members and various department heads, among others.

Surely, VI taxpayers deserve far better.

Dr. Wheatley said that Governor Daniel Pruce has agreed to his request for an investigation into the matter. Cabinet, he added, has also recommended several other measures to the governor: “an immediate freeze on non-essential hiring; restrictions on travel; advancing the implementation of a contributory pension scheme; and the establishment of a committee to develop proposals or consider proposals for revenue-raising initiatives and cost-saving measures.”

These measures all seem sound.

Moving forward, the probe should be carried out swiftly and transparently, and a comprehensive report should be presented to the public as soon as possible.

The multimillion-dollar mistake — which is particularly troubling coming amid so many ongoing governance reforms — is a jaw-dropping indicator of unacceptable systemic problems at the highest levels of government.

The community deserves to know what went wrong, and why.