The Government assured that teachers’ salaries can be revised in accordance with the economic reactivation; that is, gradually.
After five days of cross statements between President Guillermo Lasso and the leadership of the teachersthe Government clarified this March 17, 2022, that the fiscal impact of the salary increase to public teachers is approximately $500 million a year.
According to an official statement, the Executive did not receive a request for financial availability for this proposal.
From the legislative sectors that on March 13, 2022 approved the reforms to the Organic Law of Intercultural Education, and the leadership of the National Union of Educators (UNE), it has been stated that the fiscal impact would be $630 million.
While during a radio interview, Lasso spoke of a figure of around $4,000 million.
If the data processed in the Education Commission of the Assembly is reviewed, the current monthly expense for the salary of 169,559 teachers amounts to $147.34 million, which represents $1,768.08 million per year.
With salary increases up to 55%, or an average of nearly $260 a month for each teacherthe annual spending on salaries increases to $2,302.68 million. In other words, the additional value that must be disbursed annually is around $534.6 million.
This value is equivalent to a little more than the collection of one percentage point of the Value Added Tax (VAT) annually or the equivalent of almost five months of the expenditure that the Government must make this 2022 for the subsidy to diesel.
In the statement, the Lasso administration assures that it recognizes the work that teachers carry out in favor of the children of Ecuadorians. However, he pointed out that he will work to progressively increase his salariesrespecting the law and reviewing compliance with due process.
“The teachers’ salaries may be reviewed within the framework of the economic revival. This is a commitment of all Ecuadorians, each one to continue activating the economy of the neighborhood, the cities and the country. We are going to attract more investment, generate more employment and more actions to have permanent resources. Our teachers they deserve a salary increase responsible and that lasts over time, “he clarified.
In other words, the Government points to a scenario in which the increase It will not be done immediately, among other reasons because the sources of financing put forward by assembly members and teachers’ leaders are not sustainable.
First, even with an increase in tax collection of about $1 billion a year, the government will have an average of about $1,194 million in permanent revenue per month; while permanent expenses (salaries, public purchases, transfers) average a little over $1.2 billion (a negative difference). This without taking into account the more than $500 million of the salary adjustment to the teachers.
Second, oil revenues (the other source of revenue for the increase proposed by the Assembly) are a lottery with an extremely fluctuating price of a barrel of crude oil. In the best years of the oil boom, during the Correísta decade, the resources that reached the General State Budget (PGE), after delivering resources to Petroecuador (investments, fuel imports and subsidies), and local governments, averaged $5,164 million. .
Under the current circumstances, that amount does not even cover the announced investments in road improvements, a part of the debt with the IESS and another percentage of the bulky expense in interest and amortization of the current public debt.
Assembly aims to repeal tax reform
A few days after approving an increase in public spending in the Plenary of the Assembly via salary increase for teachersthe Legislative Administration Council (CAL), with five votes in favor, qualified this March 17 the two bills that propose to repeal the tax reform.
The two qualified proposals were presented in November and December 2021 and correspond to the legislators Patricia Sánchez, Ángel Maita and Salvador Quishpe (Pachakutik), and the UNES Assemblywoman, Vivian Veloz.
The law that the two legislative groups intend to repeal includes the new taxes that are in force (increase in the payment of income tax and temporary contribution on wealth) and that have been the target of criticism by the same political and economic sectors. Despite this, the proposal salary increase to the teaching profession is based, in part, on these additional incomes.
The processing of these two projects will be carried out in the Economic Development Commission, chaired by Daniel Noboa. (JS)
OFFICIAL COMMUNICATION | The General Secretariat of Communication of the Presidency informs that the Government recognizes the work of teachers and will work responsibly to progressively increase their salary, respecting the law and reviewing that due process is complied with. pic.twitter.com/eMrGXRCT5g
– Communication Ecuador (@ComunicacionEc) March 17, 2022
