TUC hails 'ambitious' 2017 budget

The Trades Union Congress (TUC) has described the 2017 Budget as an ambitious one that seeks to address the challenges confronting the country.

It has, therefore, pledged to work with government and other stakeholders to support both the growth and jobs initiatives outlined in the budget.

In its comments on the 2017 Budget statement, TUC said a careful reading of the budget indicates that government recognises the employment challenge as such and has a clear intention to address it.

Tax reliefs, way to go

In view of the TUC, one policy initiative that sets this budget apart from all previous budgets has to do with taxation or tax reliefs, to be more precise.

It noted that the elimination of these taxes may spur the growth of businesses and raise the disposable incomes of Ghanaians.

The union said this is the way to go because blanket tax reductions do not automatically lead to job creation even as they reduce government revenues.

According to the TUC, government seems to have ignored the Union’s suggestion to raise the tax-free threshold to GHC12,000 per annum (or GHC1,000 per month).

It explained that the implication is that even minimum wage earners would pay income tax, urging government not to tax workers into poverty.

The Union noted that successful implementation of the various initiatives such as the one-district-one-factory and one-village-one-dam initiative would help create decent jobs in all parts of Ghana and go a long way to alleviate the employment challenge which is the greatest challenge facing Ghana today.

“We find these job creation initiatives very positive and refreshing. We will support government to ensure successful implementation of these employment creation initiatives,” the Union added.

Need for clear targets for employment creation

However, TUC drew government’s attention to the need for clear targets for employment creation to serve as a guide for assessing performance, sector by sector, region by region and district by district.

New jobs that benefit women and young people

In addition, the labour union said since women and the youth have suffered discrimination in terms of decent jobs, it would be important to assess performance in terms of the proportion of new jobs that benefit women and young people directly.

Consequently, it charged government to make resources available to the Ghana Statistical Service (GSS) and other agencies to begin collecting data that would allow for an objective assessment of the efforts towards employment creation in each of the ten regions and all districts for men, women and the youth to enable government to review its employment policies regularly or even annually.

“This may appear burdensome but that is the only way we can ensure that new jobs are equitably distributed across regions, districts and across men and women,” it added.

Bold commitment to private sector

TUC noted that the budget made a bold commitment to private sector development as a means of creating employment citing tax reliefs as a notable example.

The union stated that the commitment to improving the business environment and reduce transactions cost for the private sector are commendable.

Pending challenges

Despite this high degree of commitment to the growth of the private sector, the union said the budget failed to address the fundamental challenges that have hindered the development of the private sector.

It identified the high cost of borrowing and the negative effects of the unbridled trade liberalisation policy are areas that need urgent attention and very specific policy measures.

Unbridled trade liberalisation policy

“Our trade policy has become a hindrance to the growth of the domestic private sector.

“The national trade policy offers our foreign competitors much more than our commitments in the World Trade Organization (WTO) require from Ghana. “We need to re-calibrate our trade policy to make domestic production profitable,” it added.

TUC holds the view that a free trade area with the European Union without the participation of Nigeria will constitute a formidable threat not only to the regional market upon which Ghana intends to build its industrial ambitions. The EPA Fund, which government intends to access, is simply a bait to lure Ghana into a trade agreement which is bad in every conceivable respect for the domestic private sector and for job creation.

The TUC does not and will never support this trade policy initiative with the European Union because it will not support our effort towards building a strong domestic private sector for job creation.

Underfunding of labour administration institutions

The labour union lamented underfunding of the labour administration institutions explaining in Dollar terms, the 2017 allocation to the Ministry of Employment and all its agencies is about $13.1 million compared to a budgetary allocation of the Ghana Cedi equivalent of about US$23 million in 2009.

“We cannot achieve industrial peace for economic growth if government continues to treat the ministry responsible for employment and labour relations as a non-priority ministry,” it noted.

Poor pensions

The trade union blamed low pensions on low earnings, poor administration of pension funds and excessive government interference in the operations of Social Security and National Insurance Trust (SSNIT).

It expressed fear that with the transfer of the supervisory responsibility of National Pensions Regulatory Authority (NPRA) from the Ministry of Employment and Labour Relations to Ministry of Finance, workers envisage more government interference in the pension system that may gravely affect the operations of SSNIT, NPRA and second tier pension schemes.

It, therefore, called on government to give the National Pensions Regulatory Authority (NPRA) the autonomy it needs to effectively regulate the agencies in the pensions industry.

ECG privatisation

TUC called on government to activate the dialogue mechanism in respect of ECG privatisation without further delay.

“We find it extremely difficult to understand why Ghana must handover assets of ECG to a foreign private sector firm for 25 years.

“We also find it insulting to the good people of Ghana that the agreement between Ghana and the Millennium Challenge Corporation of the United States of America “will prevail over the domestic laws of Ghana’ as clearly stated in Article 7.1 of the Millennium Challenge Compact,” it said.