Search form

Last updated: 27 min 21 sec ago

You are here

Business & Economy

Lebanese Cabinet to look at ways to fund public sector pay rise

Prime Minister Saad Al-Hariri’s government in Lebanon in March agreed the first state budget in 12 years, but economists are worried about the impact of new taxes. (Reuters)
BEIRUT: Lebanon experienced a nationwide strike involving all public sector institutions as well as both public and private schools on Monday, with those on strike demanding a public sector pay rise.
A new salary scale was approved by Parliament only for the constitutional council to revoke it on Friday. The government then failed in its emergency session on Sunday night to agree on a plan to fund the salary scale law.
The one-day strike affected key sectors across the country such as courts, government hospitals’ administration, educational institutions and official government departments.
The cabinet held another session late last night in an effort to work out a way to fund $917 million public sector pay rise. The majority of ministers have agreed that the salaries should be paid according to the new law.
Economic expert, Ghazi Wazni said: “If September’s salaries are not paid in accordance with the salary scale law, the resulting unpaid additions will be considered as debt.”
He said that the government had three choices.
“(It could) issue a new law revoking the old salary scale law; issue a new law to suspend the old law; or postpone it with a ministerial decree,” Wazni added.
The salaries for the first month according to the salary scale law amount to more than 110 billion Lebanese lira ($73.3 million). Wazni said that the government could cope with that amount, adding that “the government can present a draft law within a month, with new tax items that can be added to the draft budget of 2017.”
Lebanese President Michel Aoun, who is in Paris on a state visit, said that he “had personally highlighted the reasons why the constitutional council revoked the law of financing the salary scale law.”
He confirmed that the salary scale law “will be implemented and in the event of any technical delay it will be recovered later through the Ministry of Finance’s available funds.”
Ali Hassan Khalil, the minister of finance, said: “The ministry has prepared the payment of salaries according to the new law in force; however, it is still to be confirmed during Tuesday’s cabinet meeting.”
He also pointed that the ministry had amended taxes, “as referred to by the constitutional council’s decision.”
Melhem Riachi, the information minister, stressed that taxes were of vital importance if the country was going to responsibly finance the public sector pay rise.
“The implementation of the salary scale law without taxes will turn Lebanon into (another) Greece,” he warned.
The Association of Public Administration Employees and other unions called for a rally on Tuesday in Riad al-Solh Square in Beirut, near the Grand Serail, where the cabinet session will take place.
Beshara Asmar, president of the Confederation of Lebanese Workers, said that the salary scale must be immediately implemented, condemning the tax hikes on employees with limited incomes, especially the VAT increase.
The MPs who signed the tax law appeal said that the government proposes very expensive projects without controlling the spread of corruption in state institutions.
In a statement read out by MP Boutros Harb following a meeting, the MPs stressed the beneficiaries’ right to the pay scale approved by Parliament.
He added that the MPs will suggest “amendments to the budget by increasing taxes on banks, increasing fines on maritime violations, as well as proposing other reforms.”
BEIRUT: Lebanon experienced a nationwide strike involving all public sector institutions as well as both public and private schools on Monday, with those on strike demanding a public sector pay rise.
A new salary scale was approved by Parliament only for the constitutional council to revoke it on Friday. The government then failed in its emergency session on Sunday night to agree on a plan to fund the salary scale law.
The one-day strike affected key sectors across the country such as courts, government hospitals’ administration, educational institutions and official government departments.
The cabinet held another session late last night in an effort to work out a way to fund $917 million public sector pay rise. The majority of ministers have agreed that the salaries should be paid according to the new law.
Economic expert, Ghazi Wazni said: “If September’s salaries are not paid in accordance with the salary scale law, the resulting unpaid additions will be considered as debt.”
He said that the government had three choices.
“(It could) issue a new law revoking the old salary scale law; issue a new law to suspend the old law; or postpone it with a ministerial decree,” Wazni added.
The salaries for the first month according to the salary scale law amount to more than 110 billion Lebanese lira ($73.3 million). Wazni said that the government could cope with that amount, adding that “the government can present a draft law within a month, with new tax items that can be added to the draft budget of 2017.”
Lebanese President Michel Aoun, who is in Paris on a state visit, said that he “had personally highlighted the reasons why the constitutional council revoked the law of financing the salary scale law.”
He confirmed that the salary scale law “will be implemented and in the event of any technical delay it will be recovered later through the Ministry of Finance’s available funds.”
Ali Hassan Khalil, the minister of finance, said: “The ministry has prepared the payment of salaries according to the new law in force; however, it is still to be confirmed during Tuesday’s cabinet meeting.”
He also pointed that the ministry had amended taxes, “as referred to by the constitutional council’s decision.”
Melhem Riachi, the information minister, stressed that taxes were of vital importance if the country was going to responsibly finance the public sector pay rise.
“The implementation of the salary scale law without taxes will turn Lebanon into (another) Greece,” he warned.
The Association of Public Administration Employees and other unions called for a rally on Tuesday in Riad al-Solh Square in Beirut, near the Grand Serail, where the cabinet session will take place.
Beshara Asmar, president of the Confederation of Lebanese Workers, said that the salary scale must be immediately implemented, condemning the tax hikes on employees with limited incomes, especially the VAT increase.
The MPs who signed the tax law appeal said that the government proposes very expensive projects without controlling the spread of corruption in state institutions.
In a statement read out by MP Boutros Harb following a meeting, the MPs stressed the beneficiaries’ right to the pay scale approved by Parliament.
He added that the MPs will suggest “amendments to the budget by increasing taxes on banks, increasing fines on maritime violations, as well as proposing other reforms.”

MORE FROM Business & Economy