BEIRUT

Lebanon News

Mikati reiterates Cabinet’s commitment to salary hike

Prime Minister Najib Mikati arrives to attend a Cabinet session at the presidential palace in Baabda, Wednesday, Sept. 19, 2012. (The Daily Star/Mohammad Azakir)

BEIRUT: Prime Minister Najib Mikati assured civil servants in remarks Saturday that his Cabinet would not backtrack on the promised salary scale increase, and said that there is no cause for them to protest.

“We are not backing down from this issue. The decision has been made in Cabinet and a search is under way to guarantee sources of funding for the scale,” Mikati told An-Nahar in an article published Saturday.

“The Cabinet is taking its time in this matter, with the aim of finding sources [of revenue] that do not burden citizens, the economy or monetary stability,” he added.

Mikati was responding to the Union Coordination Committee, a coalition of private and public school teachers and public sector employees, which threatened Thursday to stage a nationwide strike in 10 days if the government fails to implement the long-awaited salary scale increase.

The committee is asking the government to refer the bill, which it has already approved, to Parliament for final approval. The Cabinet is still studying the means to fund the increase, which will cost the treasury around $1 billion a year, according to estimates.

In a bid to fund the salary hike, the Cabinet has levied new taxes, slapping an additional LL1,000 on every telephone land line and cellular bill, raising taxes on the profits netted by lottery winners from 10 to 15 percent, and imposing fines on people who maintain illegal coastal properties.

The Cabinet has said it will pay the raise over a five-year period.

In his talk with the local daily, Mikati said that there is no cause for the committee to call a protest, as the government is committed to referring the salary scale to Parliament, but only after having figured out how to secure the money to fund it.

“There is no reason to return to protesting. Since the government is going along with the scale [increase], why protest? And for what?” he asked.

Meanwhile, Central Bank Governor Riad Salameh said that the salary scale increase is essential, but that it must not have monetary consequences that lead to inflation, which in turn would increase the balance of payment deficit.

"Pumping liquidity [into society] all at once [encourages] consumption and increases imports, which in turn raises trade deficit, not to mention the treasury's deficit,” Salameh told As-Safir in remarks published Saturday.

Several economic committees representing the private sector have warned that the new pay scale would have “catastrophic” consequences on the country, and have renewed their rejection of any tax increases, particularly the proposed hike on taxes that banks pay to the state.

 

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