The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Public Services Union (BPSU) president yesterday said he was “blindsided” by the Prime Minister’s pledge of imminent civil service pay rises and a $112m jump in the Government’s wage bill.

Kimsley Ferguson told Tribune Business that he and other union executives were last week informed they would be unable to see the public service salary review, which Prime Minister Philip Davis KC yesterday said justifies between 2 percent to 8 percent salary increases for non-managerial civil servants, before it was approved by Cabinet.

While “excited” about higher incomes for all civil servants, he argued it is “ludicrous” for the union to be denied “a seat at the table” over the salary review because it will be unable to identify - and advocate for the correction of - any shortcomings that may negatively impact its members as the Government will have already made decisions.

And Mr Ferguson told this newspaper he was unaware that 2025-2026 Budget data is forecasting a 13.9 percent, or more than $112m increase, in the size of the civil service wage bill over the next three fiscal cycles.

Total wages and salaries are projected to be $807.459m in the upcoming 2025-2026 fiscal year, which begins on July 1, before further increasing to $881.692m in 2026-2027 and then reaching $919.734m in 20272-2028. The BPSU chief said a key driver behind the projected increases is likely to be “allocations” for salary increases given that a number of public sector union deals expire at end-June 2025.

The data, though, signals that The Bahamas’ size of government is set to further expand, rather than shrink or remain the same, thus placing an ever-increasing burden on Bahamian businesses, citizens and residents to finance it via tax increases.

And it seemingly puts a dent in hopes voiced by Robert Myers, former Chamber of Commerce chairman, that “burners will become earners” - meaning that civil servants, and other public sector workers, whose salaries are funded by taxpayers will instead become tax generators or “earners” through switching to the private sector as a result of recent economic growth.

The Prime Minister, unveiling details of the Government’s spending plans as he led-off debate on the 2025-2026 Budget in the House of Assembly, disclosed that the public service’s middle manager ranks will experience an increase in their take-home pay with this month’s end-June pay cheque. And non-managerial staff will enjoy their own income rises as early as September 2025.

“We are moving forward with the second phase of our comprehensive Public Service Salary Review,” Mr Davis said. “The first phase, now complete, focused on middle management and above. Public servants will see increases in their salaries at the end of this month.

“This second phase will bring salary adjustments of 2 to 8 percent for the remainder of the public service, a vital step to help restore purchasing power lost to inflation while also promoting fairness, retention, and morale across the public sector. The second phase will be implemented in September 2025.”

The Prime Minister said the Government is “also expanding the health insurance coverage for all government employees”, adding that this will “provide broader protection for our public officers; reduce out-of-pocket medical costs; and improve overall access to healthcare for those who serve our nation”.

No details on the health insurance expansion were provided, even though successive administrations have struggled with the build-up of arrears on medical coverage premiums for Royal Bahamas Police Force officers and other public sector employees. Several observers yesterday suggested that the civil service pay rises, and their timing, are being made with one eye on the upcoming general election.

“You know an election’s coming. That’s the easiest group to grab. That doesn’t surprise me at all,” one private sector professional said. Another added, referring to the projected surge in the total civil service wage bill over the next three Budget cycles: “At least they’re budgeting for it. That’s the political pay-off for the public service.

“But they continue to prime up the spending side, and there is no discussion with regard to restraint. It’s the sustainability of that.” Mr Ferguson, meanwhile, signalled that himself and other BPSU executives were caught unawares by the Prime Minister’s statement on imminent salary increases.

“I appreciate any form of engagement that the Government will convey to public servants,” he told Tribune Business. “However, the statement the Prime Minister has made, the union is extremely blind in that regard.

“The financial secretary, we met with him some time last week. We had been hearing about the salary review and, being the sole bargaining agent for public servants, we wanted to go in while the salary review was in draft form so that the union could have sight of it, and we could make suggestions and recommendations on how certain things should be handled.

“Today, the union knows nothing about the salary review,” he added. “Simon Wilson indicated to the union, along with its attorney, Khalil Parker KC, that once approved by Cabinet we will be able to see it. How ludicrous is it to tell intelligent people, who represent the sole bargaining agent for public sector employees, that?

“If any one of our people is adversely affected there is no means by which it can be remedied because it because it has already been approved.”

Noting that the BPSU was directed by Pia Glover-Rolle, minister of labour and the public service, to speak with the Ministry of Finance on the salary review, Mr Ferguson added: “Someone should have had the fortitude in that meeting with the ministry to ensure the union had a seat at the table. The repeated claim that labour in this country is stable, I don’t support that statement. It is far from the truth. 

“There are so many outstanding claims and, if the Government has such a surplus [the forecast $75m Budget surplus for the upcoming 2025-2026 fiscal year] why can’t the senior doctors be paid, why can’t Customs and Immigration promotions be executed, why can’t all the outstanding classifications and reclassifications be completed if they have such a surplus.”

Reiterating that he was “excited” about civil servants earning increased salaries, the BPSU chief joined his union colleagues in calling for The Bahamas to implement a livable wage rather than focus on the minimum wage. And he also queried why middle management civil servants, rather than those they supervise, are receiving their rise first.

“Don’t get me wrong; I’m very excited, but we need to see this become a reality,” he added. “And we are starting off in the wrong direction. We should be looking at the marginalised first before we deal with the upper class. We should be addressing people who are below the poverty line, having to make a decision between paying rent and putting food on the table.

“The Consumer Price Index is no longer a measuring stick to determine what the minimum wage should be. At the BPSU, we’re of the view that we need to pursue a living wage versus the minimum wage because the cost of living will always outpace the minimum wage.”

As for the projected surge in the Government’ wage and salary bill over the next three Budget cycles through 2027-2028, Mr Ferguson told this newspaper: “Again, blindsided. However, the Government has pending a number of industrial agreements that are expiring on June 30. From where I sit, that is probably allocations for negotiations for salary increases.”

The $807.458m wage bill projected for 2025-2026 is the ‘block’ that consumes the greatest share of the Government’s recurrent Budget at 23.4 percent, meaning that more than 20 cents out of every $1 paid by Bahamian taxpayers will go towards covering civil service pay. Of the $767.95m allocated to the public service wage bill in the present 2024-2025 period, some $555.744m was spent at end-March.

And, based on the $735.96m wage bill for the 2023-2024 fiscal year, the Government’s payroll will have increased by almost $184m in just five fiscal years if the projections for 2027-2028 come true.

Mr Ferguson, meanwhile, said the salary review and increase announced by the Prime Minister is not something agreed to by the BPSU. He added that the union had agreed to a salary review as far back as 2016, but he argued that it had never taken place, and this present exercise is the Government’s.