In an effort to “save” public workers’ salaries and jobs and provide working capital for development projects, Government is proposing they invest in the Barbados Optional Savings Scheme (BOSS).
Originally touted as forced savings before morphing into a national meeting turn and its current form, BOSS, according to Government’s senior economic advisor, Dr Kevin Greenidge, also makes good investment sense.
He was speaking at a media briefing hosted by Prime Minister Mia Mottley on Thursday night at the Lloyd Erskine Sandiford Centre after a meeting with the various trade unions and workers’ representative bodies in the public service.
Using an example, Greenidge said if a worker opted to invest in bonds for the full life of the 18-month programme, he or she would have $4 280.33 in the bonds accounts and earn $856.07 in interest (at 5 per cent) over the four years. In comparison, saving that amount in a traditional bank would earn about $25 before fees were deducted.
He said in 2019, Government’s wage bill was $806 million and through BOSS, they would be able to ensure no worker lost his or her job while providing funds to upgrades schools, for road works, repair of building and environmental projects such as cleaning the roads and beaches. These are areas of the economy which would grow while they wait on tourism to rebound in the wake of COVID-19.
Greenidge said no one’s salary would be cut.
“So whatever a workers’ net salary is after taxes and NIS is taken out, it remains the same,” he explained.
Those who earn $36 000 or less would be exempted, but could opt in. Public sector workers earning between $36 000 and $50 000 a year would receive 93 per cent in cash and 7 per cent in bonds. Those earning between $50 000 and $100 000 annually would receive 88 per cent in cash and 12 per cent in bonds and if you earn in excess of $100 000 per annum, the split would be 83 per cent in cash and 17 per cent in bonds.
Since BOSS is optional, a worker can determine before he or she is paid that they need cash and the bonds would be converted so the full salary appears on the bank.
Additionally, Government has waived the withholding tax on interest, the bonds are fully tradable and will also be protected and immune from restructuring. Credit unions, banking institutions, corporation and even individuals can express their interest in buying through the Central Bank.
Mottley said some of those who are now unemployed could probably find jobs as these capital works programmes get underway.
She said there will be meetings with public sector workers next week to further explain the scheme to them.
Government estimates there will be a revenue shortfall between $450 and $500 million as a result of the COVID-19 pandemic. (SAT)