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Our View: Public sector payroll creeping back to unaffordable levels

File photo. Nicosia tax office

THE figures released by the Statistics Service about the total number of people employed in what is described as the ‘broad public sector’ should be cause for concern. Perhaps it is not time to sound alarm bells yet, but the trend is worrying. The number of employees increased by 2.29 per cent (1,527) from the third to the fourth quarter of 2018, taking the total number to 68,351 which is the highest it has been since 2013, when appointments were frozen.

The ‘broad public sector’ which is general government comprises of the government (51,915), non-profit organisations (6,307) and local authorities (4,192). With the pay cuts, imposed during the crisis, being gradually phased out from the start of this year, in a couple of years the public sector payroll could reach unaffordable levels once again. President Anastasiades has been generous with the taxpayer’s money after we exited the assistance programme a tendency he continued to show even after he secured his re-election.

The latest figures released are a warning about the general government complacency being exhibited by the government and particularly by the president who finds it very difficult to say ‘no’ to the money demands of interest groups. Although there was an attempt to reform the public service that was rejected by the opposition parties the reforms did not include reducing the numbers people employed by it, even though many departments are over-staffed.

Reducing numbers should have been the number one objective of civil service reform, but it was not even looked for fear of a union reaction. Computerisation that has reduced staff needs in most company offices over the last 20 to 30 years has left general government untouched; it still needs as much staff to operate as it did in the days before the arrival of the computer age. The introduction of e-government, announced about a year ago, is moving at a snail’s pace for the obvious reasons.

All this is inevitable when unions are allowed to call the shots, preventing modernisation that would also improve service to citizens in order to protect well-paid public sector jobs. The irony is that every government has promised to cut red-tape that discourages investment and penalises entrepreneurship but all have failed spectacularly to deliver. The more people a government hires the smaller the likelihood that bureaucracy would be tamed. If anything, it becomes worse as it creates more bureaucracy and more delays in decision-making.

Apart from the added cost to the taxpayer, the growth of the number of general government employees indirectly increases the cost for businesses that have to deal with bureaucracy to get things done.

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