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Salary increases, long service allowances and revised Schemes of service.

Presenting the national budget for 2019,  the Minister of Finance, Trade, Investment and Economic Planning , Maurice Lousteau-Lalanne announced  that a sum of SR 2.67 billion has been allocated to Wages and Salaries, which represents 31.5% of the total Appropriation Bill and  over 11%  share of total Gross Domestic Product (GDP) forecasted.

The Minister recalled that last week, Seychelles celebrated ten years of economic reform programme, which ushered  so much progress, based on the socio-economic development  of the country.
The main highlights of next year’s budget is a 5% salary hike  on the basic salary and the introduction of a long service allowance  ranging from SR 500  to SR 4,000 monthly, both effect as from July 2019. There is also a revision of schemes of service for various categories of public employees.
Minister Lousteau-Lalanne  noted that President Faure  had appointed a committee in January 2018 to review the Public Service Act 2013. The committee proposed a 5%  salary increase on the base pay as per the Public Service Salary Table. Government has approved their recommendation and this will be implemented  from July 2019. A budget provision of SR 42 million has been allocated in the 2019 to provide for the salary increases.
The Minister went on to recall that during the 2018 budget, Government announced the introduction  of a long service allowance during 2019.  Subsequently, Government will introduce a long service allowance for the public sector non-contract employees as follows

5 to less than 10 years service                         R 500 monthly allowance
10 to less than 15 years                                  R,1000 monthly allowance
15 to less than 20 years                                  R 1,500 monthly allowance
20 to less than 25 years                                  R 2,000 monthly allowance
25 to less than 30 years                                  R 2,500 monthly allowance
30 to less than 35 years                                  R 3,000 monthly allowance
35 to less than 40 years                                  R 3,500 monthly allowance
More than 40 years                                         R 4,000 monthly allowance                     
This will cost  R 50.6 million in the 2019 budget  and double that figure in 2020. This will ensure  that staff with more experience  in the public service will be compensated for their vast experience.
A total  5,530  staff will benefit on this new incentive , representing 53% of the total Government workforce. From the total eligible staff for 2019, 69% will receive R500 or more.

Revised schemes of service

The Finance Minister went on  to state that a total of R 58.5 million is allocated for the revision or introduction of various schemes of service ion 2019.
The following schemes of service will be revised from January 2019.

.Retention allowance for Dental and Allied Professional, Health Care Assistant under the Public Health Authority.
. Doctors revision in supplementation and risk allowance
. Allowances  for library and archives employees at the Culture Department
.Road Transport offices
. Seychelles Revenue Commission adjustment in basic salary
. Agency Social Protection Welfare officers
. Veterinary Officers  at the National Biosecurity  Services
. Department of Employment
. Brass band at the Department of Defence
. Research  Officers cadres for all ministries, departments and entities.
The following schemes of service  will be revised from July 2019

. Department of police
. Seychelles Fire and Rescue Services Agency
.Department  of prison services
. Department of Foreign Affairs Diplomatic cadre for headquarters staff
. Attorney General Office

Increased take home pay for most public sector employees

Minister Lousteau-Lalanne  stated that Government employed 10,351 staff  as per the August 2018 payroll. The average earnings  in the Government sector  is R 14, 598  monthly, compared to R 11,318 in the private sector.
According to the statistical bulletin  quarter two  of the National  Bureau of Statistics, it is highlighted that 64% of the total work force is working in the private sector , compared to 21% in the Government  and 15% in state-owned enterprises.
Minister Lousteau-Lalanne reiterated  that as part of the Progressive Income Tax System, 54% of the Seychellois are not paying any income tax since the first R 8,555.50 are exempt  from income tax and also currently there are 13 exempted emoluments.
These include:
.All compensation payments
.All gratuity payment for long term services
.A bonus not exceeding to an amount equal to 1/12 of the annual basic salary.
.Thirteenth month salary as per the Employment Act.
.An end of contract payment limited to 15% of the total basic salary earned during the period under contract.
.Services charges and overtime payment as per the Employment Act requirements.

Budget for social programs

In the 2019, Government will maintain its commitment to finance social programs , benefitting the most vulnerable people in our society. Retirement benefits paid by the Social Welfare Agency  will go up from R 5,050 to R 5, 250  monthly. Invalidity and Disability benefits from R 5,050 to R 5,250 and funeral benefits from R R1,700 to R 2,000.
 The budget for the  various social programs are as follows.;
. R 40 million for Social Safety nets by the Agency for Social Protection (ASP).
. R 240 million for Home Carers, which include their 13th month salary. The salary increase of 5% for full time home carers will come into effect as from January 1,2019. The Home Carers on part time basis will be pro-rata.
. R 8.5 million for home improvements/ re-roofing scheme for pensioners through the Housing Finance company ( HFC).
. R 10 million  for Vulnerable  Home  Repair Scheme  for Pensioners, through HFC.
. 18 million  for housing finance subsidy scheme.
. 4.2 million for dedicated funds for  schools.
. R 6.7 million for Daycare Scheme and
 .R 3.2 million Foster Care Scheme.

Education and Training schemes

The Finance Minister also highlighted the new allowances allocated to post-secondary students.
We note that  Education receives the lion’s share of the 2019 budget allocation, representing  12% of the total.
. First year post- secondary students will receive R 850 monthly
. Second year students – R 950 monthly
. Third year students  R 1,050 monthly.
Praslin and La Digue  students in post-secondary institutions receive an additional R 1,400 monthly for all three years of study, while R 200 is deducted for the use of the Youth Hostel.  
In 2019, there shall  an increase of stipend for students in the tertiary education institutions. With the aim  of ensuring that our overseas students are binding to the visa requirements , the Government shall align  the stipends to the costs of living index in those countries.  
Government will from February  2019 increase the stipend for all students studying abroad.   In addition, the students studying for a degree at the University of Seychelles , will also receive an increase. Details will be provided by the Agency of National Resource Development soon.
In 2019, Government  will also offer budget support to the various business schemes.
. R 5 million for the Youth Employment Scheme ( My First Job Scheme).
. R 16 million  for the Small Medium Enterprises Scheme (SMEs)
. R1 million for the Youth Entrepreneurship Scheme (YES).
Government will need to invest  for the preparation and participation of the Seychelles team  in the Indian Ocean Island Games  to be held in Mauritius in mid 2019.  
During the year 2018, all corporate Social Responsibility (CCSR) tax contributions  from our public enterprises are being used  to finance  the housing projects. During 2019, the same collection  will be done  from the public enterprises and funds used for the training of athletes for the IOG .  
Thus, a total R 24 million is anticipated for the Games preparation and participation. This will complement the R 10 million that was allocated in 2018.  Additionally, a sum of R 4.5 million has been budge ted for the 2019 All Africa Games.


Miniister Lalanne stated that  R 161 million has been provided in the 2019 budget for the different land and housing projects.  He added that during  2017 , Property Management  Company (PMC)   signed a loan of R 150 million and expected to raise an additional R 200  form the financial market during the last two months of 2018.  This will ensure that the land and houses target are achieved in the next  3 years.  
Government has meanwhile engaged with the government of India to finance the construction of 3,000 houses through a special purpose vehicle.  The total indicative cost of the 3,000 houses is R 3,026 million.
The financing  from the Indian Government  will be through a mixture of loan and grant . There will be a grace period  of 5 years  for repayment of the loan.. It is expected that 558 and 506 houses will be made available  in 2020 and 2021 respectively.
Government has also taken note of the higher cost of building materials  on Praslin and La Digue, taking into account the transportation element. As of January 2019, all loan applicants with HFC, will have their personal contribution reduced from 7.5% to 5%.
Currently through the budget, there is a housing subsidy for al housing loan applicants in the income bracket of R25,000 or below. Government is in the process of  reviewing the current scheme after 5 years  of implementation  to ensure that it is better targeted.