THE opposition yesterday slammed government plans to boost revenues, saying that they effectively saddled the overwhelming majority of workers with the burden of the economic crisis.
“We saw a scene played out at the presidential palace where the concern was how to secure the interests of the parties that took part, saddling those absent with the burdens – the overwhelming majority of the people going through the problems of the economic crisis,” said Averof Neophytou, main opposition DISY deputy chairman.
The government has proposed measures to save €70 million from the state payroll in 2011 and 2012.
Acceptance of the proposal is thought to hinge on a simultaneous contribution from businesses. On Wednesday, the government said it planned to tax companies that have shown profits for the past three years €1,000 each per year for 2011 and 2012.
From this, the government hopes to put around €200 million in its coffers.
Both the unions and large employer’s organisations have viewed the proposals positively.
Neophytou described this as a “public relations” stunt with the participation of representatives of workers in the state and broader state sectors – 17 per cent of the workforce – and organisations mainly representing big businesses, or three per cent.
“In the absence of 83 per cent of workers in the private sector and 97 per cent of small and medium businesses, they took decisions that find the three parties fully satisfied,” Neophytou said.
In reality, he said, Cypriot taxpayers will foot €350 million in state payroll increases between July 2011 and June 2013, and it was decided to return €70 million.
And on the next day they decided that between 100,000 and 120,000 companies – whether they make €1,000 or €500 million per year – will pay €1,000 in additional contribution for two years.
Banks will be asked to pay as much as the neighbourhood grocer, Neophytou said.
“What is going to happen with the 83 per cent of the workers in the private sector where a substantial part – over 30,000 – are living through the nightmare of unemployment?”
Deputy chairman of government coalition partner DIKO, Nicolas Papadopoulos said such measures would only make things worse.
“Some speak of a fair society but consider that the solution is for the neighbourhood grocer and the Popular Bank and the Bank of Cyprus to pay €1,000 in tax,” he said. “We’re hearing the same things we heard around one-and-a-half years ago: that by taxing companies and immovable property we’ll patch the holes and save the day.”
The government rejected the criticism, saying the measures were part of a package that included cutting public sector expenditure, supporting growth, increasing state revenues and supporting a social state.
“Mr. Neophytou is saying that civil servants should give more, essentially through a real cut in salaries,” government spokesman Stefanos Stefanou said.
He added that if Neophytou recognised the representativeness of the unions he should put this view to them.
“He can recommend that civil servants not receive the cost of living allowance nor pay scale raises, nothing,” Stefanou said.
Regarding Neophytou’s comments on the company tax, Stefanou said he would be more convincing if he explains why his party opposed and voted against a bill to impose a one per cent tax on businesses.
That tax was rejected by parliament with the vote of government coalition partners DIKO.
