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25 February 2017

2017 Budget must make job creation main priority. TUC proposes to government

tuc propose

Mr Solomon Kotei — General Secretary of ICU, Dr Anthony Yaw Baah — TUC boss

Workers in the country have tasked the government to commit to a range of policy initiatives to improve upon employment opportunities and secure their pensions.

The policy initiatives include governmental measures that will facilitate a vibrant private sector for sustainable jobs and ensure that all tax, investment, procurement and trade policies of the country are geared towards the creation of jobs for Ghanaians.

These proposals were made in a policy document by the TUC, titled: “Proposal for the 2017 Budget Statement and Economic Policy of the Government of Ghana.’’

Other proposals were made by the General Secretary of the Industrial and Commercial Workers Union (ICU), Mr Solomon Kotei, and the General Secretary of the Health Services Workers Union (HSWU), Mr Reynolds Ofosu Tenkorang, in separate interviews in Accra.

TUC

In its 17-page document, the TUC made a range of proposals in relation to employment, taxation, labour administration, housing, the IMF Extended Credit Facility Programme and the privatisation of the ECG.

“We would like to propose to the NPP government to make job creation the main priority in its economic policy. We expect to see employment targets in the 2017 budget,”  the TUC said in its proposals.

Conceding that job creation was a private sector activity, the TUC, however, emphasised the fact that creating sustainable employment required massive support from the domestic industry, while building a dynamic private sector would be central to overcoming the employment challenge.

“We expect the government to announce in its first budget measures that will create the right environment for business to thrive. Tax policies, investment policies, procurement policies and trade policies should all focus on creating jobs for Ghanaians, especially the youth,” the TUC said.

Taxation

Within the context of the NPP’s position on taxation that was emphasised throughout the 2016 general election and its pledge to abolish or reduce some of the taxes upon winning, the TUC advised the government, from an employment-creation perspective, “to proceed with caution and to be strategic in its tax concessions.”

It said while excessive taxation could discourage economic activities and employment creation, lower taxes did not automatically guarantee employment creation.

“We would like to propose that the proposed corporate tax concessions must be tied to job creation so that only companies creating jobs or have the potential to create jobs here in Ghana will qualify for the tax concession,” the union said.

“To be fair to workers, the TUC also urges government to consider reducing personal income taxes (Pay-As-You-Earn),” it said.

Labour administration

On labour administration, the TUC decried the underfunding and the lack of requisite staff in labour market institutions such as the National Labour Commission (NLC), Labour Department (LD), and the department responsible for workplace inspection, as well as the Ministry of Employment and Labour Relations (MELR).

It was also not happy about the underfunding of the Ghana Statistical Service to provide employment and other labour market data.

“The shortfall in funding has gravely affected labour administration,” it stated.

“If employment is so important, why is it that the most recent data on employment is found in the employment module of the Ghana Living Standards Survey conducted in 2012/13?” it queried.

“We expect the government to announce measures that will address these challenges, especially measures that will strengthen the ministry responsible for employment and labour relations to deal with labour-related challenges and to effectively take charge of the Youth Employment Agency (YEA) and other initiatives that will create jobs for young people.”

Earnings

The union pointed out that earnings on the Single Spine Pay Policy (SSPP), which was mooted by the NPP administration in 2006 and implemented in 2010, initially increased in both nominal and real terms.

“But since 2012, real earnings for public sector workers have declined considerably. In dollar terms, the base pay on the SSSS declined from US$764 per annum in 2010 (when the Single Spine was introduced) to US$550 in 2016. In 2017, the base pay is pegged at GH¢201 per month, which is lower than the legislated national minimum wage (GH¢237),” it said.

“We believe that the Single Spine Pay Policy holds the key to addressing the problem of low incomes. The SSPP has been implemented for the past six years with varying degrees of successes and challenges. A review of the SSPP will be necessary to address the remaining challenges,” it said.

Pensions

On pensions, the TUC sought clarification on some investment decisions of the Social Security and National Insurance Trust (SSNIT), and wanted the government’s interference in the administration of the scheme checked.

It said the billions of cedis were locked up in the Temporary Pension Funds at the Bank of Ghana that could be channelled into economic development and job creation programmes.

It urged the government to give the National Pensions Regulatory Authority (NPRA) the independence it needed to regulate SSNIT and the privately managed second tier schemes in order to avoid crisis in the pension system.

The union suggested that the government work with domestic private sector partners to address the housing crisis.

IMF

On the International Monetary Fund (IMF) programme, the TUC said it was “disappointed that the NPP Government is seeking to extend the IMF programme. We had expected government to go through the current programme as quickly as possible and take this country out of IMF programme as Kufuor did in 2006.”

“The TUC had always maintained our position that IMF programmes cannot solve Ghana’s problems. This position is based on our faith in the ability of Ghanaians to provide home-grown solutions to our problems, if we are given the chance,” it added.

“Our opposition to the IMF stems from the fact that in the last 30 years, or so, our economic and social policies have been determined largely by IMF programmes. But the economy is still in a bad shape.  After more than two years of implementing austerity measures (under the current IMF programme), both internal (fiscal) and external (trade) deficits have remained high…”

Privatisation of ECG

On the privatisation of the ECG, the TUC said the main challenge had to do with supply, pointing out that, “If we do not address the supply challenge, no Private-Sector-Participation (PSP) can end a looming power crisis.”

“We believe that Ghana can deal with these challenges. We urge the Akufo-Addo government to pull out of this deal if the MCC is not willing to review the Compact,” it said.

Other proposals

The General Secretary of the HSWU, Mr Renolds, for his part, tasked the government to increase its budgetary allocation to 15 per cent in accordance with the Abuja declaration.

He said although the government had committed itself to the declaration, that commitment had not been met.

Mr Renolds also wanted a full account of workers’ pensions lodged under the tier-two pension scheme from the government.

The Abuja Declaration and Frameworks for Action on Roll Back Malaria was a pledge made in 2001 by members of the African Union (AU) during a conference in Abuja, Nigeria, by which member nations pledged to increase their health budget to at least 15 per cent.

The General Secretary of the ICU, Mr Solomon Kotei, also said the government had to definitely pronounce on the reduction of taxes on workers.

He said PAYE and taxes on incomes were too much for the Ghanaian worker.

 

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