Finance and Economic Planning Minister Kojo Baah Wiredu has announced a soon to be established Fair Wages Commission to administer a new comprehensive public sector wage structure. The Commission would be required to deliver to government a detailed and holistic employment reform programme to ensure equity on a regular basis. Baah Wiredu made the announcement as part of the Budget Statement and Economic Policy of the government for the 2007 Financial Year and said wage agitations at the labour front this year have posed serious challenges to the economic and political stability of the country. He said government recognised the legitimacy of the agitations about the inequities in the administration of wages and salaries and gave the assurance that by the end of the implementation of reforms currently underway, all public sector employees would receive enhanced salaries. Baah Wiredu said the process to implement measures to consolidate the various payroll systems into an Integrated Personnel and Payroll Data started in 2006 and is expected to be completed in 2007. “This consolidation will enable us to improve the monitoring of payroll expenditures and eliminate the incidence of ghost workers.” The Finance Minister explained that failure over the years to institute a framework for rational discussion and decision making over wages has led to various adhoc solutions, resulting in several different salary structures that are fuelling tensions within the public services. He said the situation needs an urgent redress, hence the government’s decision to implement the new framework within which public sector salaries, wages, negotiations, grading and pay administration will be implemented. Baah Wiredu said the public service is currently made up of about 650, 000 employees and government projects that public wage bill for 2007 will be about 13.2 trillion cedis, or 66 percent of the total discretionary expenditures. “In order to meet this substantial commitment, and keep within the framework of not spending more than we earn, government is having to make significant cuts to other essential costs of national expenditure.” Illustrating what he said was the difficulty with the wages problem, he said the Ghana National Association of Teachers alone, has proposed wage demands to the sum of 28.4 trillion cedis or 89 percent of the total cash revenue target of 32 trillion cedis set by government for 2007. “Put another way, the expectations of the largest public sector group is almost twice that of the government’s total projected wage bill.” He said it is quite clear that government cannot meet all of the workers expectations within the modest levels of total revenues available. With the establishment of a Fair Wages Commission, the mandates of existing institutions with similar roles such as the Central Management Board, Public Services Commission and the appellate body would be rationalised.