Budget memorandum: Trade union calls for more tax deductions

The Confederation of Free Trade Unions, SEF/IUF sent a memorandum to the government in the context of the Budget 2017-2018. The union is asking for a number of remedial measures to improve the lives of those at the lower rungs of the social ladder while also improving the working conditions of public sector employees.

Introduction of a minimum living wage

Government has committed itself to go forward with the introduction of minimum wage. Although it has set up a National Wage Consultative Council comprising of several stakeholders which is a good thing in so far as participative democracy is concerned, yet we are not agreeable to the clauses of the Act which limits the powers of the council and requires the latter to calculate the minimum wage as a percentage of the median wage.

The confederation considers that a more equitable and socially acceptable basis for the computation of the minimum living wage should be the basket of commodities as calculated by Statistics Mauritius for a typically family. Furthermore there should also be a maximum pay package determined for ALL persons paid from public funds such as advisors and other political nominees. The rationale adopted by the PRB for civil servants should be used for the latter equally.

Income Tax

The fiscal measures should be designed so as they do not nullify the positive effects of better remuneration. Thus better pay via introduction of minimum wage should not be accompanied by a rise in income tax payable. This is why we are requesting that Personal deduction be increased for individuals to Rs500,000 yearly.

Additionally the following proposals are aimed at addressing Poverty and Social Inequality while providing for Social Equity:

• Allowing Deduction for dependent relatives to include unemployed children, elderly parents and invalid kins,
• Deduction for a child receiving tertiary education should be Rs 500,000
• Deduction of interest paid on loans for the purchase of a plot of land and/or the construction/refurbishment of a first residence should not be restricted to the first loan only, provided the subsequent loans relate to the same residential project,
• To introduce deduction of interest on all education loans,
• Genuine Fiscal incentives should be provided to encourage renewable energy production. Thus the totality of investment for SSDGs should be deductible from the amount of tax payable and not from taxable income as is the case presently. 
• Refund of sick leaves for civil servants as well as retirement benefits, whatever the quantum should not be taxable.

Youth Employment Programme (YEP)

In the Government Programme 2016-2019 (page 10 para. 36) commitment was taken to extend the duration of the contract of employment to a period of 2 years. Unfortunately, as it presently stands, employers are not allowed to retain the YEP trainee beyond a period of one year. We feel that there is inconsistency here and remedial action taken for the YEP trainee being allowed to remain with the same employer for the two-year period. However, accompanying measures should be taken to discourage unscrupulous employers who would be inclined to abuse the system.

NO to the privatisation of the CWA

Essential resources and services remain a common right in the context of the SOCIAL CONTRACT. Provision and management of those services and resources should NEVER be privatized. They should remain accessible to all and this can only be ensured if they remain under the direct control of the State. Privatisation of services has always proved costlier to the public. Promotion of Quality Public Service is the only guarantee for sound economic, social and sustainable development. The recent financial crisis is testimony of the limitations of privatization.

Decentralisation of Public Services

Government should accelerate the decentralization of its services, thus bringing them closer to the population. This measure will result in less money spent in commuting both for public officers and the public. The ensuing decrease in traffic congestion to and from Port Louis will also help in reducing the carbon footprint of the country while at the same time reducing to a certain degree the fuel bill on the economy. Care should however be taken to have a better planned relocation of Government offices bearing in mind the havoc in the surroundings of the cyber city in Ebene.

Corporate Social Responsibility Policy

It is undeniable that trade unions have been and still are a major stakeholder and active player in the civil society arena. They are funded primarily by way of union fees paid in by their members. Office bearers work on quasi voluntary basis while the trade unions have running costs in terms of logistics and staffing which reduces the capacity of the unions to better serve the working population’s interest. It is therefore proposed that trade unions be qualified for CSR funds for training, purchase of equipment as well as improvement of their office and that they be represented on the CSR committee for a better expression of the needs of a large chunk of the of the working population. This will help in the promotion of an effective social dialogue specially if the three partners are on the same level playing field.

Environment, Renewable Energy and Climate Change

Climate change is a major challenge. The following are measures can help in mitigating its impact at the level of individual households. Acting locally while thinking globally: 

Incentives should be given to individual households to produce their own renewable energy with a view to reduce dependence on fossil fuel (see our proposal in that respect under income tax). 

Purchase of solar heaters and rain water harvesting equipment should be fully subsidized. 

The distribution of compost bins should be further extended to reach the largest number of households. Ideally, each household should be provided with a compost bin.

Waste segregation can further be enhanced by the setting up of selective collection of non-degradable waste by waste collectors.

1. Allocate Sufficient Resources to Ministries/Departments to:

(a) Fill vacancies – The Public Service is the executive arm of the government and no economy can progress without a modern public service. The non-filling of vacancies badly affects the vision of quality public service all stakeholders are looking forward to. The Confederation therefore urges for provisions to fill the vacancies.

(b) Appropriate equipment should be provided to Ministries/Departments to ensure delivery of quality public services.

(c) Provide Training and Retraining to Officers of Public Service/Parastatal Bodies, Local Authorities and Municipalities so as to promote a culture of quality in those sectors.  Appropriate fund to be made available for the training of the Officers and that the 1% levy grant for training applicable in the private sector be extended to the other sectors including the public sector.

Public Service Bill

The introduction of a Public Service Bill is a commitment of this government as mentioned in the Government Programme 2016-2019. This piece of legislation is vital in demarcating the prerogatives and respective powers of the administrative arm, on the one side, and the political arm, on the other, of the executive. For the sake of good governance, transparency and accountability, we are urging the passing of this Bill. Legislation should be passed to provide for the mandatory declaration of assets for MPs and other high ranking public officers and officials.