Our View: The current government has reverted to the state profligacy of the past

Promotions and appointments in the broader public sector have become something of a tradition ahead of elections, ever since the late president Spyros Kyprianou introduced the practice in the early eighties to boost his and Diko’s appeal to voters. Back in those days, thousands of people were hired, the only required qualification being a Diko membership card. It was this qualification, usually held by abject mediocrities, that also ensured serial promotions in the public service.

Although he was constantly criticised by then opposition Disy, for this crude cronyism, when Glafcos Clerides was elected the practice continued, even though the beneficiaries carried membership cards of a different party, and has stayed with us to this day. Hiring and promotions take place throughout a president’s term, but these are usually stepped up in the run-up to elections to help the party in power or to boost a president’s re-election prospects.

It is in this context the council of ministers’ decision for 1,143 new appointments to the broader public sector must be viewed. There are parliamentary elections at the end of next month and the recruitment drive, combined with the opening up of 1,000 promotion positions in the civil service not long ago, should give a strong electoral boost to Disy, which has suffered from the daily attacks on the government regarding corruption.

As usual, the taxpayer will be lumbered with a bigger public payroll, which has been on a growth path anyway, thanks to the pay increases given to public employees at the start of the year. Public employees were untouched by the lockdowns that saw many private sector workers furloughed on 60% of their wages. The 1,143 positions, assuming they are approved by the legislature, will be filled by the end of the year even though not all will burden the payroll. Some 324 of these positions are at semi-governmental organisations and more than half at the EAC. Cyta, the Ports Authority, Health Insurance Organisation will also be hiring more staff.

The public service will fill 559 positions, of which 383 are at the ministry of education and 98 at the finance ministry, but the electioneering nature of this recruitment drive is exemplified by the hiring of 104 special constables for the police force. Cyprus has the highest number of policemen in proportion to its population in the EU, a proportion that is almost double the EU average, but the state’s needs for officers, paradoxically, keep growing. Perhaps the justice and public order minister would explain why Cyprus, with an enviably low crime rate, needs so many policemen? Is there another explanation apart from the elections?

It is very worrying to see the prudent approach to public finances forced on the government by the Troika and pursued for the first few years after the haircut has now been completely discarded and the Anastasiades government has reverted to the state profligacy of the past. While it could get away with excessive spending in 2018 and 2019 when GDP grew at a healthy rate and there was a budget surplus, economic conditions have now changed. GDP has contracted, the public debt is at a record high, foreign investment is shrinking, the cost of the national health system is on an upward path, but the government is systematically increasing the public payroll through the hiring of more people and promoting existing staff to higher pay scales.

It is using the pandemic as a justification for this worrying return to the profligacy of the past maintaining the state must spend to stimulate demand and help the economy recover. While this reasoning has its merits, it cannot involve continuous inflating of the public payroll. If the recovery we all hope for does not materialise and the bill for unemployment benefits soars where will the money come from? As we found out in the past, reducing the public payroll is not an easy undertaking, made even more difficult now by certain irrational court decisions.

We are in a period of economic uncertainty, the end of which nobody can predict, and which one would think, have persuaded the government to show some prudence and caution in its state spending decisions. Even if there was a need to hire more than a thousand people – something we very much doubt – this surely could have waited until the economic situation became clearer, instead of the government rushing to secure House approval, with the imminent elections being its only consideration.