The reform of salary scales in the public sector is waiting for Godot

Wed, 01/08/2014

The fate of the proposed new law for reviewing public salary scales remains unclear despite the declaration made by MP Ibrahim Kanaan, the president of the parliamentary commission in charge of its review, and who stated that the said commission completed its review and introduced some changes on the proposals following which the law petition was sent to the assembly for endorsement. While doubts remain regarding the final version of the project and its sources of funding, which both have yet to be officially revealed, serious questions remain as to the applicability of the proposed salary scales amidst a continuously deteriorating economic situation, and the absence of any consensus regarding key political milestones, and the absence of a budget for 2014.
As soon as Kanaan had made his statement, the Trade Union Coordination Committee (TUCC) issued a declaration in which it said that it will be awaiting to receive the final version of the proposal so as to react accordingly and decide whether or not it will go ahead with its general national strike which was previously scheduled for 26 November 2013, but was subsequently suspended in view of the deteriorating overall situation in the country.
The declaration of the current Minister of Finance, Mohammed Safadi, regarding the need to reschedule the settlement of the salary scales payments into installments payable over a period of four years raised doubts regarding the outcome of the work of the Parliamentary Commission. Safadi warned against paying the entitlements totaling some LBP 1700 billion in one installment as requested by the TUCC, stating that such an action will lead to a spike in inflation and therefore will affect the purchasing power of the Lebanese Pound. Safadi’s statement came at the time in response to various queries raised by the parliamentary commission in 2013, and which has prompted the commission to consider two scenarios, the first involving an increase of 73.5% and the second of 121%. At the end the latter scenario seems to have been finally favored by the Commission.
Furthermore, MP Kanaan revealed that the new law proposal includes three key sections: the first on rights and justice, the second on available resources and the third on the needed related reforms. He went on to say that the Commission has searched for additional new revenues to cover the costs of the proposed new salary scales and was successful in increasing revenues by LBP 600 billion without forcing any new burden on the poorer strata of society. He added that new revenues are expected to come from raising the VAT on luxury boats, revising some customs taxes, based on a study carried out by the Customs Bureau, raising the tax on costal properties from LBP 4 to 60 billion and imposing new taxes on tobacco.
Kanaan also proceeded to outline the administrative reforms which are needed to accompany the implementation of the new salary scales, namely at the level of national budgeting, whilst describing the current budgeting practice as “dangerous”. He also argued in favour of halting the practice of approving budget advances, and finally confirmed that there will be no need for rescheduling the payment of the workers’ entitlements since the needed sources of revenues were secured.
In conclusion, it is important to note that the endorsement of the proposed new salary scales constitutes a step forward in meeting the rights of workers and employees especially those of the public sector, and should in no way be considered as a “Makramah”.
Any attempt to link this process with the economic situation should be looked at with suspicion since the proposed project law faced similar resistance and criticisms when first discussed during a much better economic climate. Finally, any attempt to resort to economic and political arguments to block the implementation of this new salary scales is but a smoke screen and an excuse for stalling and for not meeting workers rightful demands, at a time when Lebanese politicians seem to be more preoccupied with their deepening quarrels that have led to the almost total paralysis of the country.