IN keeping with its promise to improve the economic situations of those on the lower rungs of the income ladder, Government has increased the minimum wage by 17 per cent, with effect from January 1, 2024.
It has also approved a $1 billion Christmas bonus package for public-sector workers who accepted the four per cent wage increase, and will not increase any taxes in 2024.
In announcing the measure as he presented his 2023/2024 budget on Monday, Finance Minister Colm Imbert said, “I propose to initiate action to minimise the country's socio-economic imbalance and stimulate consumer spending aimed at economic expansion.
“To achieve this objective, I propose to increase the minimum wage by 17 per cent, or $3 per hour, from $17.50 to $20.50 per hour.”
Trade unions had advocated for an increase to $30 an hour, but business chambers called on Government to do a balancing act so those earning minimum wages would not be the first to be fired.
Imbert said, “This measure will benefit approximately 190,000 persons in the workforce and will require an amendment to the Minimum Wages Act, Chapter 88:04 via a minimum wage order."
He said it should be noted this pay rise will increase government expenditure by at least $50 million per year. For those who work a basic 40-hour week, it would put an additional $500 in their monthly pay packet.
“For those who currently work a 12-hour shift at the minimum wage for a six-day week, like some security guards, this will increase their monthly take-home pay by over $900 per month,” Imbert said.
“The focus is on improving the well-being of every individual in our society so that they can reach their full potential.
“We are investing in our people,” he said.
A deliberate decision was taken not to increase or reduce any existing taxes in 2024, other than adjustments to the energy-sector tax regime to stimulate exploration and production, among a few other minor adjustments.
“In this year, 2024, we did not feel that we should impose any further burdens on our citizens, but rather, we should provide some relief in key areas to those at the lower end of the scale.
“Therefore, our fiscal and budgetary measures for 2024 are quite simple.
“We have provided $1 billion in back pay for those 37,000 public-sector workers who have accepted our offer of a four per cent increase, plus increases in some allowances.
“We shall also bring all those public-sector workers up to their new salary levels immediately, at a cost of an additional $360 million per year. We are also exempting the one-off payment of $4,000 to retirees from tax, which forms part of this process.
"I am also giving these 37,000 public-sector workers an undertaking that all ministries and agencies involved will be provided with the necessary funds to pay this $1 billion in back pay by Christmas 2023. I am requesting all permanent secretaries and accounting officers to immediately start preparing the paperwork to achieve this deadline for these payments.”
The post Budget goodies: minimum-wage hike, Xmas bonu
