THE OPPOSITION was perfectly justified to attack the president’s inexcusable delay in taking measures to tackle the serious problems of public finances. Under current conditions this delay verges on criminal negligence, as with every day that passes the deficit grows.
The more time that passes before the government acts, the more painful will the remedial measures be, as Greece found out. At least in Greece Prime Minister Papandreou dared to take action. Here, almost two years have passed since the economic slowdown started and the only thing the government has done is to talk about some imaginary ‘package of measures’ that is supposedly under consideration.
The only practical measure that has been taken was the president’s announcement that he will reduce his salary by 10 per cent. But even this could prove a joke in poor taste if the calculations made by Politis are correct. The paper reported that his total pay for 2010, will amount to €150,623 and still be higher by €7,720 compared to 2009.
This amount can not be considered unreasonably high for the president of the republic. What is unreasonable is that the whole amount is tax free, something that is in violation of the constitution. I have calculated that if the president paid income tax like all other citizens do, his total pay (including tax) would be €205,012 a year or €17,084 per month.
A decision which illustrated the irresponsibility of the government in terms of its management of public finances was the huge increases in the untaxed allowances paid to 48 top judges, permanent secretaries and other senior state officials in May 2009. At the time, the economic crisis had already started ‘to hurt’, to use the president’s word. Those increases which doubled, and in some cases tripled, the untaxed allowances were given for the benefit of some officials at the presidential palace.
Speaking about the poor state of public finances last week, President Christofias mentioned tax evasion as a factor. There is tax evasion, especially by many professionals in the self-employed category such as doctors, lawyers, architects etc. Nobody doubts it exists but it is for the state to combat it. In any case, to present tax evasion as the main cause of our huge budget deficit is outrageous.
The deficit will not be reduced, but will grow and eventually lead the state to bankruptcy if its root cause – the unbearably high cost of the public service – is not dealt with decisively. The number of public servants increased from 33,978 in 1990 to 51,787 in 2009, which was a rise of 52 per cent. The annual public payroll (not counting pension payments) rose from €372 million in 1990 to €2.1 billion in 2009, a staggering rise of 465 per cent.
All past governments have a share of the responsibility for this outrage as do all the political parties. DIKO and AKEL should be given an honourable mention for their contribution as in 2002, when the Clerides government tried to reduce the entry level wages in the public service for new recruits they created a mighty fuss and in the end defeated the proposal.
Under the circumstances, the only correct forecast that can be made is the following: either the state will crush the public service or the public service will crush the state. Chrsitofias has run out of time and no longer has the luxury of toying with imaginary measures. He must decide today what he will do. Surely, he will not want to go down in history as the president who was responsible for the bankruptcy of the state, because he was afraid of the public servants union.
