ANY REMAINING doubts that union bosses were dictating the government’s economic policies were shattered yesterday when finance minister Kiki Kazamias announced his latest measures. He announced additional taxation on private sector workers and 0.5 per cent levy on all companies operating in Cyprus, in order to persuade the moaning union bosses to agree to the freezing of wages in the broader public sector.
Union bosses had been demanding that the private sector also carried some of the burden of dealing with the effects of world economic crisis and the government, embracing the union-propagated myth – that the main cause of the big budget problems was the world crisis – obliged. It also bowed to the other union diktat of clamping down on tax evasion, Kazamias announcing that the authorities had already gone after many individuals and would re-open old cases; tax revenue had increased as a result of the clampdown.
The government has been an accessory of the unions’ communications game by adopting all their misleading positions. For instance, it repeats that the country’s budget problems were caused by the world crisis and tax evasion which is a blatant lie. We would have faced deficit problems regardless, because the growth of the public payroll was veering out of control before the world crisis. It was held in check only thanks to the extraordinary tax revenue from the construction boom, which could not have lasted forever.
But the government could not even bring itself to say the obvious, that the primary cause for the deficit was the public payroll which had to be cut, allowing union bosses to blame it on tax evasion, the world crisis, greed and anything else they could think of. As a result of the government’s cowardice, businesses, which are struggling to stay afloat, will be penalised with a 0.5 per cent annual levy for the two years the wage freeze would be in place.
Why should businesses be made to pay because successive governments hired too many workers, paid them extortionate wages that rise by 5 per cent every year and pensions three times as high as those paid to private sector workers? It is not as if private business is booming and can afford to help out the state, which has also penalised them by absorbing cash from the local market and reducing liquidity and credit in order to cover the widening deficit. A company that has been losing money for the last three years, as the majority of Cypriot firms have, has suffered the consequences of the recession and there is no rational or moral justification for the state taking money from it now.
It gets worse. Private sector workers with an income above €2,500 would also pay a 0.5 per cent contribution in order to keep the bosses of Pasydy, Peo, Sek and Oelmek happy. It is a small amount, but it is the principle that matters. The majority of private sector workers have not received a pay rise in the last two years in contrast to those of the public sector who have received total wage rise of between 8 to 10 per cent in the same period; some have had to accept a wage cut to keep their job. Then there is the small issue of job security, which is guaranteed for the latter, but is non-existent for the former.
But penalising companies and private sector workers will not keep the bullies happy, as the government hopes. Before Friday’s announcement of the latest government proposals, the Pasydy boss had stated emphatically that his members would make no more sacrifices; the teaching union leader promised strike action if the government dared to impose more cuts. How will Kazamias persuade them to accept the two-year wage freeze, when only two months ago they rejected his proposed two-year suspension of CoLA, and he backed down immediately, reducing it to six months? And what about the president’s pledge not to impose any new measures without union consent?
If we had a responsible government, which did not make the satisfaction of union blackmailers its priority, measures, including a wage freeze, would have been imposed two years ago and we would not be in the mess we are in today. Will it realise, even at this late hour, the obvious? It cannot save the country from bankruptcy if it keeps giving in to the blackmail by the defenders of public sector privileges.
Public employees should be left to carry out their strike threats because a pseudo-consensus imposed by blackmailers on a spineless government, is not in the interest of our society.
