Public sector wage debate in Lebanon faces delays

A Cabinet session [in Lebanon] to decide on whether to refer the new public sector wage scale to Parliament could be postponed, sources with information on the matter said Monday. The sources said the session could be delayed until Tuesday if the Directorate for Urban Planning fails to hand in its report on Prime Minister Najib Mikati’s proposal to introduce taxes on the cost of newly constructed apartments. The proposed tax is aimed at securing financing for the new salary scale that is expected to cost the treasury an estimated $1.2 billion annually. Chaired by the prime minister, the ministerial committee tasked with studying the draft law is in session awaiting the directorate’s report. Ministers would have to consult with President Michel Sleiman to decide on the postponement. Mikati’s additional tax would target newly constructed buildings in Beirut and other regions and allow developers to rise higher than current zoning regulations permit but on condition that the additional floor be subject to a higher tax. The prime minister has justified his proposal by saying that the number of properties that could benefit from this draft law wouldn’t pose an additional burden on infrastructure and traffic in already congested residential areas. A 10-percent municipal fee would allow municipalities to improve the infrastructure and build more public parking to solve the congested traffic crisis in the country. Opponents of the proposed bill argue that owners of heritage buildings would demolish the constructions to build new skyscrapers. The head of the Union Coordination Committee Hanna Gharib said Sunday the strike scheduled Tuesday would probably take place as previously planned given indications that the government introduced “unacceptable” adjustments to lower the cost of the wage increases. Mikati argues that amendments have been introduced in such a way not to harm the private sector, which has rallied against the adoption of the pay hike. The Economic Committees, a leading private sector group, argues that the damage the private sector will incur should the wage hike be approved far outweighs the economic cost of strikes.