The way in which the government spends the taxpayer’s money is very difficult to understand. It is rather haphazard, without any economic or social rationale, just spending it for the sake of building up its flagging popularity with different sections of the population. The spending, which is always heavily publicised by the government, often by the president personally announcing it, is random and not part of any overall policy.

Tax revenue, thanks to the arrival of many foreign businesses and so-called nomads combined with high prices, has increased significantly and the government seems to feel duty-bound to spend the available cash on measures aimed at endearing it to the electorate. It is as if the council of ministers sits each week and decides which group will be the beneficiary of government largesse. This is the government that gave money to families with schoolchildren just before the start of the school year to buy bags and pencils.

A couple of weeks ago it announced a one-off payment for those eligible to the mountain resident benefit, equivalent to 50 per cent of the money they were entitled to for the year. The benefit, which amounts to €7.2m, would be given to permanent residents of villages at altitudes above 600 metres, to ameliorate the problems they face as a result of low temperatures recorded in their communities, said the Interior Minister Constantinos Ioannou. This was part of the national plan for the revival of mountain communities, he said. Did the government expect colder temperatures than last year above 600 metres?

On Wednesday, the council of ministers approved the conditions for the scheme for subsidies of interest on housing loans, which government spokesman Constantinos Letymbiotis said was aimed at offering financial support to people who had taken a loan for a house or flat they would live in. “The ultimate aim is the reduction of the negative consequences on disposable income from the increase in inflation and interest rates,” said Letymbiotis.

For people to be eligible, the loan should not be more than €400,000 and the annual family income should not exceed €50,000. The interest rate subsidy would last for no more than two years per household, and the scheme, which will run until 2027, will cost €33m. The spokesman said the scheme was part of the set of measures being taken by the government “with the aim of supporting the households in the face of the consequences of inflationary pressures and high prices.”

Nothing shows the randomness of government spending decisions more accurately than this decision. First, only those who took a housing loan from January 2022 to December 2023 would be eligible for the subsidy, as if anyone who took a loan in 2021 has not had higher interest rates to pay. Second, why are home buyers with a family income of €50,000 being assisted by the state when there are families on €30,000 annual income who have difficulty paying the rent every month? Has the disposable income of the latter been left untouched by the consequences of inflationary pressures and high prices? Third, why is the taxpayer subsidising a family that can afford to take out a €400,000 housing loan?

This makes no sense, unless the government’s rhetoric about helping out the middle class is not as hollow as it sounds. Both the president and his finance minister have repeatedly spoken about bolstering the middle class, but they seem to be ignoring the existence of the less well-off classes. Is the plan for the poor to get poorer while the government subsidises the housing loans of the middle class? It is a peculiar way of achieving the social coherence that the government’s measures are supposed to be targeted at. Surely if the government is so concerned about housing, the €33m being wasted on subsidising the loans of homebuyers could have gone on supporting the housing needs of low-income earners.

This is how the taxpayer’s money is spent when there is no social policy and the government’s spending is decided at random, targeting groups of potential voters rather than those in genuine need of some support from the state. Perhaps the latest spending was just a communications ploy, a day before the House was due to vote on Akel’s proposal for a tax on the windfall profits of the banks, which the government opposed. It may have not wanted to be seen siding with the banks while home buyers were paying high interest on their loans and tried to counter the negative publicity with some mindless spending.

On Friday, President Nikos Christodoulides issued a written statement about the raising of Cyprus’ sovereign credit rating to ‘A-‘ by S&P Global. It was the third upgrade in quick succession and the president, inevitably, took credit for this achievement, even though the conditions for economic growth and a robust banking system preceded his election. He complacently attributed the upgrades to the government’s “fiscal responsibility,” which was rather far-fetched, considering the random way he has been spending the taxpayer’s money.