Arrears issue for budget

A major challenge for the 2020 budget is dealing with unpaid bills or expenditure arrears, Treasury Minister Ian Ling-Stuckey says.
“One major area of arrears is in the area of payments to our public servants,” Ling-Stuckey said.
“My advice is that the level of wage arrears could total K1,827 million.
“This was the figure derived by the Strategic Budget Committee, represented by deputy secretaries of the central coordinating agencies.
Ling-Stuckey said in a statement that it was an “extraordinary amount”.
“This is a shameful legacy where the cash has not been provided to pay the legal entitlements of our loyal public servants, health workers and teachers,” he said.
“The majority of this estimate is based on funds not being available to cover the exit and superannuation payments of public servants and teachers who are over the age of 65 and were required by law to retire.
“However, the lack of funds means that they continue to be paid, even though the law says they should be retired.
“They are paid even if they are not at work.
“This is such an unfair situation – teachers and public servants who have loyally served this country right up to age 65 should not be treated in such a way.
“This is also a foolish decision from a financial point of view –making the exit payments means major salary savings for future years – a 30 per cent rate of return for every year.
“In addition, the 3 per cent pay increase that should have been made in 2019 by the previous government was not funded and this now stands as a legal liability costing K122 million.
“In addition, 13 agencies and national departments have collected personnel income tax from their employees, but have not paid this to the IRC.
“This amounts to K203.5 million.
“It is illegal for agencies to with-hold such payments.
“And appropriate action will be taken as part of clearing the arrears backlog.”