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There has been considerable media attention to Ministry of Finance and Planning Circular no 21 dated 22nd September 2003. The Circular addressed to Permanent Secretaries and Heads of Departments directed that there should be no:
The Circular also indicated that "Permanent Secretaries and Heads of Departments should ensure that this directive is brought to the attention of all concerned and is strictly adhered to. If it becomes imperative for a vacancy to be filled the approval of the Ministry of Finance & Planning must first be sought. In such circumstances reasons must be given as to why it is necessary to fill the vacancy". All of this is with a view to containment of costs within the Public Sector. The Public Sector, like any other organization has to pay attention to the rate of growth of expenses in relation to the rate of growth in revenues. In the case of Central Government, the two fastest growing components are wages and interest costs. Fiscal prudence dictates that attention must be paid to the containment of these costs. Operational costs such as wages and interest must be financed from revenues and not loans. In the case of Central Government, between 1998/99 and 2002/03, tax revenues grew by an annual average of 11.74% while wages and salaries grew at an annual average of 12.4%. The provisions of this Circular is therefore designed to reduce the rate of growth of the Public Sector wage bill to keep it in line with the rate of growth in revenues and the medium term fiscal targets.
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