Our View: Wasteful state must be downsized

THERE is only one party in Cyprus that consistently questions conventional beliefs and traditional thinking – DISY. It is a healthy that there is at least one party, in these populist times, prepared to challenge official doctrine, for the good of the economy and the country, irrespective of the political cost.
Last week DISY decided to ask questions regarding the size and scope of the state, bringing back old proposals about privatisation and the rationalisation of state services which were a big drain on public finances. It could not have chosen a better time to introduce the issue to public debate. With the cost of running the state becoming extremely high and the government incapable of bringing it down, because of union opposition, reducing its size would seem to be the logical alternative.
This would tackle, once and for all, the problem of a constantly rising state sector wage bill, raise big amounts of cash for the state at a time when it is needed and bring about a more rational use of resources. As the DISY deputy leader Averof Neophytou, never tires of saying, the state had no business operating like an entrepreneur, because it does not know how to. Its dabbling in business invariably results in big losses – Cyprus Airways, Eurocypria, International Conference Centre, Philoxenia Hotel.
Even the allegedly healthy state organisations like CyTA and the Electricity Authority have been struggling recently. The former has seen its surpluses contract every year, because of competition while the latter, despite being a monopoly, cannot raise enough funds for its investment projects because of it crippling labour costs. Years of bad management by boards made up of political appointees have turned these into inefficient, wasteful organisations that exist for the benefit of their well-paid, well looked after employees.
Privatisation of these organisations would raise hundreds of millions of euro for the state in these difficult times and turn them into efficient, competitive businesses, better able to serve the public which is their alleged mission. However the conventional wisdom (or prejudice, to be more precise) dictated by AKEL – supporters of big, interventionist Soviet-type states – and embraced by other populist parties is that state-owned organisations are part of the ‘public wealth’ which should not be sold off.
Supporters of state-ownership have never used a rational argument in defence of their cause. How is the ordinary person benefiting from this public wealth? By paying higher electricity rates than if EAC were a private concern? Cyprus Airways air fares were always at levels that benefited neither the tourism industry nor ordinary citizens, but the airline was considered public wealth, even if this wealth cost the taxpayer millions every year.
Talk of public wealth is total nonsense invented by the communists of AKELl who want state-owned organisations because these give more muscle to political parties, allowing them to buy support by offering well-paid jobs, promotions, big pensions and lucrative contracts. But cost for this profligacy and mismanagement of public wealth is always borne by the taxpayer. DISY is absolutely right in wanting to downsize our wasteful state.