COPF recommends CB to defer salary hike

By Ajith Siriwardana and Yohan Perera  
The Committee on Public Finance (COPF) yesterday recommended in its report that the Central Bank must defer the salary increase of its employees until a fair solution is found.
COPF Chairman Dr. Harsha De Silva while presenting the report in Parliament said an independent remuneration committee should be appointed by the Finance Minister with the concurrence of the Central Bank Governor to review the salary increase.  

He said the committee recognizes the Central Bank’s independence in monetary policy under the new Central Bank Act and that it has autonomy over its budget and staff salaries.  
Dr. De Silva said the COPF raised concerns on the accountability and reasonability of the said pay hike in the current economic situation.  

He also said even though the Central Bank has administrative and financial autonomy, the Central Bank is accountable to Parliament as per the clause 5 and 80 of the new Central Bank Act and therefore, the COPF finds the across-the-board salary increase for Central Bank staff is unreasonable.  
“Significant increases in remuneration may be appropriate for selected categories of professional staff, the increment for all staff cannot be justified,” the report said.  He said the COPF proposed that an independent remuneration committee must be appointed by the Finance Minister to review salary increase and submit a report in 4 weeks and the Central Bank must defer the salary hike until a mutually acceptable solution is arrived at, based on the findings of the report.  
The committee is expected to arrive at reasonable adjustments in remuneration for all staff categories based on the expertise of the specialised staff and comparability of the same as relevant to CBSL.  
It is strongly recommended that the methodology for determining salaries of professional staff be decoupled from non-professional and minor staff. This committee is also expected to arrive at a transparent formula for future revisions to CBSL staff remuneration,” the report added.  State Minister of Finance Shehan Semasinghe said the government would study the report and inform its stance.