Cyprus Mail
Opinion

Our View: Vague reassurances from minister over rising payroll not enough

Under-secretary to the President Constantinos Petrides

Apart from a news conference 10 days ago, at which the under-secretary to the President Constantinos Petrides lashed out at the irresponsibility of the opposition parties in voting against the government’s civil service reform bills, very little else has been said about this exhibition of political immaturity. Everyone is acting as if it never happened, refusing to talk about the adverse consequences it will have on public finances as it would increase the public payroll by much more than the government had budgeted for in 2017.

Opposition politicians behaved like a bunch of kids, voting against the bills for the sole purpose of getting one over the government. They were not pandering to the civil servants’ union which had given its consent to the reform bill and they could not possibly have thought that placing a ceiling, by law, on the annual rate of growth of public sector wages would have harmed the economy. The truth is they vote for a bigger than necessary increase to the wage bill, on whim, to show the government that it cannot have things its way.

Finance minister Harris Georgiades has been at pains to explain that despite this setback the situation was under control and the government would take other measures to keep spending in check. He has opted for this passive approach because he knows that making an issue out of the opposition’s childish antics could have a negative impact on how rating agencies evaluate the economy, but it is the wrong choice. The taxpayer has the right to know how many more millions this irresponsibility would add to the payroll and what annual pay rises would be given to public employees in 2017 when pay-cuts would end.

Instead, Georgiades has been giving assurances that the government was considering steps to mitigate the consequences. In an interview with the Cyprus Business Mail, he said “we are considering extending indefinitely the freeze on new hiring so that any new hiring will have to go through the process of scrutiny and ultimately need to secure the approval of the House.” But if the freeze is extended, why would the government sanction new appointments? And was he joking in presenting the need for the House’s approval as some kind safeguard?

Only last week, after the reform bills had been rejected, the government announced the recruitment of 250 policemen to add to the 3,000 privates hired by the National Guard in November and the few dozen positions opened for doctors at hospitals. The freeze that was in place did not stop these appointments so why would its extension make any difference? The opposition parties will certainly not block proposals for new appointments.

This is why people need to be informed about the consequences of the House vote. What would be the extra expenditure? By how much would wages increase in the public sector in January? What cuts to government spending would be needed to cover it? How would the freeze in appointments be implemented? Vague reassurances from the minister are not enough.

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