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MPs reject 121 percent wage hike: lawmaker

Minister Ali Hasan Khalil, right, receives a delegation from the Lebanese Bank Association in Beirut, Friday, May 2, 2014. (The Daily Star/Dalati Nohra, HO)

BEIRUT: The MPs tasked with hammering out a solution for the controversial salary scale for government employees and public school teachers consider demands to raise wages by 121 percent “ludicrous,” a deputy said Friday.

“We have submitted a comprehensive plan to finance higher wages for civil servants and teachers. We also have submitted a proposal on the size of this increase. But we definitely won’t accept the 121 percent wage increase. This is ridiculous and astronomical to say the least,” Future MP and member of the parliamentary committee discussing the salary scale Ghazi Youssef told The Daily Star.

Youssef, who did not elaborate on the new proposals, stressed that financing the wage hike was the responsibility of all parties in Lebanon, including the private and public sectors.

He added that the committee would unveil the plan next week but declined to say whether the proposal would enjoy the support of the Union Coordination Committee, which has for the last three years campaigned for the 121-percent wage hike.

“We have done our job and made sure that all parties are happy. But I can’t say for sure if the UCC will support these proposals,” Youssef said.

UCC officials and representatives of civil servants have repeatedly refused to compromise on their demands and have threatened to escalate strikes and sit-ins across the country if Parliament fails to pass the new salary scale.

Youssef hinted that the MPs had considered most of the proposals made by Finance Minister Ali Hassan Khalil, including raising the value added tax from 10 to 12 percent. “We had some reservations on raising the tax on interest rates on assets invested by the commercial banks. This is like double taxation,” he said.

However, he did not rule out raising taxes on banks’ profits.

“Apart from taxes, we are proposing cutting waste in many public departments in order to save money.”

Youssef also said the wage hike proposed by the committee would be paid in full and not in installments.

Meanwhile, Khalil met a delegation from the Association of Banks in Lebanon headed by Francois Bassil at the Finance Ministry.

Talks focused on Khalil’s proposal to raise taxes on the banks’ dividends and interest generated from investments in Lebanese securities.

Bassil said banks support the demands of the UCC provided the financial resources are fully secured.

Khalil said he was awaiting the proposal of the parliamentary committee and would comment on their suggestions once he received them.

Economists have warned of grave economic consequences – including soaring inflation and a ballooning deficit – if the government and Parliament yield to all of the UCC’s demands.

Observers say MPs are likely to shelve the issue of the salary scale until after the presidential election, noting that no one is willing to take such a huge political risk at this stage.

 
A version of this article appeared in the print edition of The Daily Star on May 03, 2014, on page 4.

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