CIVIL servants defiantly warned yesterday they would not be made scapegoats, as a debate on how to shore up state finances turned increasingly bitter.
“We shall accept no reduction in salaries,” declared Glafkos Hadjipetrou, head of the blanket civil servants union PASYDY.
“If the government wishes to modify the amount of [civil servants’] contributions to the Social Security Fund, it can do so legally,” he added.
Hadjipetrou was speaking after a meeting at PASYDY headquarters of the major public sector unions, including teachers, police officers and military personnel.
The union chief complained that all the attention was focused on civil servants, whereas nothing was being done about “big business” and rampant tax evasion.
An announcement by the unions said civil servants had already made a sacrifice by agreeing not to insist on receiving the entirety of their annual wage increments, and expected private sector employers and capitalists to do their part.
According to a leaked government blueprint, there are plans for a two per cent wage cut for all public servants, expected to save the state €35 million.
Apart from public sector pay cuts, the Finance Ministry is also proposing a 30 per cent tax increase on cigars and 20 per cent increase on tobacco products bringing in an additional €31 million, as well as a 0.001 per cent levy on bank assets.
The measures are aimed at cutting the deficit to achieve the EU goal of 4.5 per cent of GDP by the end of 2011.
The administration, which is currently discussing the package with coalition partners AKEL and DIKO, has stressed that its decision has yet to be finalised.
But according to reports, the two most prominent scenarios for the public sector payroll are: either a freeze on wage increments for all civil servants, except for those on the A7 wage bracket and under; or a flat reduction of two per cent, again exempting those falling under the A7 bracket.
Speaking after a meeting of DIKO’s Executive Bureau to discuss the government package, party spokesman Fotis Fotiou said they expected the Finance Ministry to submit additional ways of reducing state expenditure.
DIKO says that quick-fix measures are not enough to put the economy on a solid footing, and wants a debate on the pensions scheme to start immediately.
Fotiou noted also that any decisions must be taken as soon as possible, preferably before parliament closes for the Christmas holiday recess.
Stockwatch reported last night a €160 million difference between DIKO’s and the government’s proposed measures to raise revenues and cut state expenditures. The website said the party is looking at €400 million, compared to the government’s €240 million.
As it stands, the government’s package provides for a two per cent cut in civil servants’ wages (€35 million), a levy on bank assets (€55 million), raising taxes on medicines and foodstuffs (€60 million) and tobacco (€31 million), raising water prices (€10 million), reducing the number of temporary workers in the civil service (€25 million), reducing permanent positions in the civil sector (€13 million), cutting state pensions (€7 million), and increasing fines on corporations (€5 million).
Meanwhile the civil servants have come under fire from DISY MP Averoff Neophytou, whose public spat with PASYDY’s Hadjipetrou – began over the weekend – continued yesterday.
Hadjipetrou claimed Neophytou was pursuing “racist politics” by pitting civil servants against private-sector employees and high-wage earners against low-wage earners.
The DISY deputy hit back accusing Hadjipetrou of resorting to “low blows” whenever someone “dared” to criticise the public sector and its productivity.
Neophytou accused Hadjipetrou of being in cahoots with ruling AKEL: “He fully toed the AKEL line for an additional hiring of 1,200 employees in the public sector, and this during an unprecedented economic crisis, feigning ignorance.”
He went on to say Hadjipetrou had become the “advocate” of government policy.
Despite dialing down the rhetoric yesterday, Neophytou said that unless certain “painless measures” were taken today, in five years’ time civil servants here would suffer the same fate as their counterparts in Greece.
Speaking to the Cyprus Mail later in the day, Neophytou dismissed talk of an alleged assault on civil servants’ salaries as “preposterous”.
“What we’re really talking about is a two per cent reduction in wage increases. But every year, civil servants normally get about a seven per cent increase in their salaries. So they’re still getting five per cent more at the end of the year.”
Neophytou said that 35 per cent of the budget goes toward the civil sector payroll, which accounted for 15 per cent of GDP.
“By comparison, the EU average for the state payroll is 10.8 per cent. If we could get there, that would mean €850 million in savings.”
And citing Eurostat statistics, he said that for every euro raised in government taxes, 10 cents went to the state payroll.
