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Our View: Public sector cuts could finance better welfare system

First day for Guaranteed Minimum Income applications last week

THE GOVERNMENT’S legislation for the guaranteed minimum income (GMI), which in effect reformed the state welfare system, has come under considerable criticism both from affected social groups and some political parties. For instance, AKEL’s deputies have been arguing that the government’s welfare reform was a case of taking from the poor to help the poorer.

This is a smart slogan with an element of truth in it as the government has indeed redistributed the money paid out in welfare support to different groups. Some payments were cut and others were scrapped and the money that was saved was used to finance the GMI, with the state spending on welfare, which reached one billion euro during the Christofias, presidency remaining at the same level.

Many deputies and union officials must not have understood what the government had done and seemed to have been under the impression that there would be new funds to finance GMI. But none of them thought it worth asking where these ‘new’ funds would come from given the country is in an assistance programme. They just assumed the government, which avoided explaining how the GMI would be funded, would find the cash from somewhere.

AKEL deputies pretended to be shocked when the representatives of the Troika told a House finance committee meeting last Friday that any proposed new welfare payments would have to come out of the existing state budget. In other words, some existing benefits would have to be cut to finance new ones.
Paraplegics and the disabled were directly affected by the welfare reform and their organisation has been protesting against the new law because it envisages means-testing the adult children of the claimants before granting state assistance. If the offspring have above a certain income, the parents would be ineligible for state support.

These cases do not exactly fit the AKEL description of ‘taking from the poor to give the poorer’ and neither does the scrapping of the handouts given to refugees, without any means-testing, to build a house. The reality is that we do not have unlimited funds to offer comprehensive welfare support to everyone that might be in need. During the Christofias presidency welfare payments more than doubled, many of them going to people who had no right to receive state help. This generosity contributed to the state’s financial woes.

But if our politicians are so keen on setting up a real welfare state they could raise the funds to support it by reducing the extortionate wages and pensions paid to public employees. By reducing the public sector pay-roll we could have money to support everyone in need of state help. And AKEL would be satisfied that the government was not taking from the poor to give to the poorer. But when a country chooses to have the best-paid teachers in the EU, it cannot also have an adequate welfare system.

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