Fury over wage hikes
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While public servants in the US and most of Europe are paid competitive salaries, it is Singapore that pays the highest salaries in the world for public servants, largely to deter corruption.Singapore’s Prime Minister Lee Hsien Loong was once quoted as saying: “(It is) best to pay the person according to what he is worth and according to what he is contributing. If you don’t do that, either you compromise on the quality of your civil service or people will find ways to make up and compensate, camouflage forms of compensation …”
High salaries for Central Bank staff have become a widely debated topic. It has caused shock and consternation in the public domain and triggered calls for a revision. Central Bank officials including the Governor have stood by these proposed increases but have consented to a new government committee to re-examine the issue and present a fresh report on the controversial salary hikes.
This was the topic of conversation on Thursday morning when I received a call from ‘human resource’ pundit HR Perera, popularly known as HR.
“I say, these Central Bank (CB) new salary increases are mind-boggling,” he said.
“That has led to a huge public outcry but in defence CB officials say they are entitled to these increases which don’t happen all the time and there is a need to offer competitive salaries to attract educated talent,” I said.
“Yes, but can they justify such high wage hikes when others in the country are struggling to survive, some on half-pay?” asked HR.
“That’s a good point. A reasonable wage hike in keeping with current competitive trends is what the new government committee would have to look into,” I said, before finishing the call.
According to a salary scale note revealed on social media – disputed however by CB trade unions – some salaries have risen by 70 per cent where a Deputy Governor gets a gross of Rs. 1.6 million from an old gross of Rs. 974,000 according to the proposal. In the case of an Assistant Governor the salary scale has been ramped up to Rs. 1.2 million from Rs. 715,000 while a head of department gets Rs. 1 million, up from Rs. 600,000.
In comparison, private bank CEOs (small banks) would be getting anything between Rs. 1.6 to 2 million+perks and benefits, while large bank CEOs would receive anything between Rs. 2-3 million+perks and benefits, it is learnt.
Bank DGMs (deputy general managers) could receive anything between Rs. 900,000 to Rs. 1.5 million. Bankers point out that CB officials also get pensions (which private banks don’t get) and EPF contributions in addition to low cost loans.
A CB trade union says the institution needs to offer competitive salaries to attract the crème de la creme to this sector. “In the past year alone, the Central Bank has lost nearly a hundred officers of its wealth of human capital and the fact that some have joined international organisations including the World Bank and its affiliates, Bank of England and the Commonwealth Secretariat etc., is a confirmation of such movements. If this salary revision did not take place, a considerable number of the remaining officers would have left the Central Bank as well as the country and the bank’s activities could have been severely disrupted,” the union said in a statement.
In the public sector, the Ceylon Electricity Board (CEB) engineers are among the highest paid in this sector – receiving around Rs. 920,000 per month – while SriLankan Airlines pilots (in particular) receive competitive salaries in keeping with wage standards maintained in other airlines.
Entry level is also competitive at the CEB. According to officials, to be selected as a CEB engineer, you usually need to have a 1st class or 2nd upper BSc Engineering degree from a reputed local university and go through a comprehensive interview process.
So, is the salary hike for CB workers justified? That is what the new committee would have to address while taking into consideration the views of the Governor, Monetary Policy Board and staff unions. It is also important that the salary scales are commensurate with attracting the right talent for an institution that is independent, regulates financial institutions and safeguards public deposits.
Last Saturday, the CB said a majority of its senior management and professionals made a collective decision to consider a revision to their salaries. In a statement, it said this decision was communicated to the Committee on Public Finance (COPF) on March 16 prior to the COPF Chairman recommending that the salary revision be reviewed by an independent committee.
It said the CB is held accountable in achieving and maintaining domestic price stability and securing stability of the country’s financial system. “To achieve this critical national mandate, the CB employs many experienced and professional staff under its wing and the recent salary revision was made with the intention to retain its experienced staff in order to function at its full capacity,” the statement said.
As I walked to the kitchen to take a break, I spotted the trio under the margosa tree discussing a different topic. “Elavalu mila adu wela wagey (Vegetable prices seem to have come down),” said Serapina.
“Ow…..market eke bonchi, carat, gova, thakkali wala mila adu wela (Yes……in the market, the price of beans, carrot, cabbage, tomato has come down),” noted Kussi Amma Sera.
“Govinta honda aswennak labilada nethnam meka chanda gunduwakda [Farmers seem to have had a better crop or is this an election gundo (stunt)],” laughed Mabel Rasthiyadu.
IMF’s Senior Mission Chief for Sri Lanka, Peter Breuer, when asked to respond to the ‘high wage’ hike at the CB, was quoted as saying that what’s important is that “there (should) be a high degree of transparency on the part of the Central Bank to explain how it is benchmarking its decisions”.
The new government committee to review the new salary scale of CB workers, as proposed by COPF, is yet to be appointed and should present a report within four weeks. With New Year holidays round the corner, it is doubtful whether such a committee will be up to speed in examining and finalising recommendations.
Winding up this column, my thoughts were on a compromise solution being reached quickly taking into consideration the views of CB officials and perceptions of the sector in addressing an issue that has drawn widespread interest. Sri Lanka needs to move forward from such distractions.
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