By Poly Pantelides
THE board of state broadcaster CyBC had wanted a fixed annual budget decided as part of a public dialogue and a study to determine collectively the future of the broadcaster, instead of letting people go before its future was decided, CyBC’s former chairman has said.
Makis Symeou, whose resignation last week was followed by those of four other board members this week, told the Cyprus Mail the body’s problems should have been dealt with differently, by studying in depth what kind of public broadcaster Cyprus should have and deciding on a fixed budget to accommodate that vision. But CyBC was simply told it would be getting €5.5 million less next year, receiving roughly €26 million from taxpayers.
But for Symeou, the sharp drop in anticipated revenues meant only one thing: they would need to start sacking people.
And so he resigned, followed by his former board members who were not willing to accept any jobs axed.
“I was not against saving [money] but in the four years I’ve been a chairman we’ve been reducing the state grant. We are now at our limit,” Symeou, who took over as chairman in August 2009 and had been on the CyBC board since 2006, said.
CyBC had proposed a number of plans last year to curtail expenses from selling off immovable property or handing over assets to the state, Symeou said.
CyBC is short on cash, both in the short-term and the long-term. At the end of last year, its pension fund was over €93 million in deficit, according to the auditor-general’s (latest) 2012 report. CybC’s working capital was also short by €11.5 million in 2012, compared with €8.5 million in 2011.
CyBC needed to cover pension benefits and other employee benefits, which is how the working capital deficit came about, the auditor-general said. She said this deficit “demonstrated that the organisation’s ability to continue its ongoing activities was dependent on the continuation of the state grant and the lack of obligation to immediately pay in obligations in the pension fund.” In short, CyBC carries on because the state gives it money and because it does not have to pay the €93 million-plus its pension fund should hold for future pensioners.
Symeou conceded the auditor-general’s point but pointed out the state has also been falling behind its pension fund obligations. And CyBC has lost assets he said, bonds and shares in the Bank of Cyprus and the former Laiki bank which have been effectively wiped out as a result of Cyprus’ international bailout agreement in March that forced authorities to restructure the Cyprus banking sector. The law provides for long term action by CyBC to correct the deficit but there just are no profits to channel into the fund.
Last year, about 86 per cent of CyBC’s revenues or €33.8 million were given by the state. Roughly 44 per cent of the money CyBC spent corresponded to staff expenses. Along with allowances and overtime, CyBC’s payroll alone edged close to €7.0 million for permanent staff and to €9.8 million for associates and other staff. Including employer’s contributions such as pensions and social insurance contributions, it cost CyBC over €20 million to employ some 430 staff.
But a year earlier in 2011, CyBC staff-related costs were over a million euros more. As more highly paid, permanently employed staff retired, staff expenses started falling.
“The crisis appeared slowly at first, and then all of a sudden we realised what needed to be done,” Symeou said. No CyBC rescue plan included firing people, with decisions of that sort needing to come after, not before, discussion, Symeou said.
The Interior Minister, Socrates Hasikos has been unapologetic. No one is exempted from efforts to save money, he said.
But Symeou said that though he may now be part of CyBC’s past, he has loved it and continues believing in it. Those who stayed behind have been effectively warned to brace themselves for an imminent wave of staff cuts.