OPPOSITION DISY leader Nicos Anastassiades yesterday accused the government of burying its head in the sand on the real root of the economy’s problems – an oversized public service.
Anastassiades said Cyprus was third in Europe in terms of the state payroll’s share of the gross domestic product.
Citing “one of the basic messages from the European Commission regarding (Cyprus’) Stability Programme”, the DISY leader said: “The strenuous effort which needs to be made on fiscal reform will be in vain if it is focused on increasing public revenues rather than cutting spending.”
The government’s focus on tax revenues was misguided, Anastassaides said. “In periods of recession, increasing taxes either directly or indirectly should not be the first and easy choice”, especially when those tax revenues “will be thrown into the black hole of a wasteful state.”
He added: “If there are unpaid taxes, then the government has a duty to collect them, regardless of the economic crisis, as a matter of social justice. End of discussion. But let us not think that clamping down on tax evasion is a magic wand that will solve all of the economy’s problems. Nor should it be a nice-sounding slogan that we will serve up to our fellow citizens in order to avoid taking bold decisions to reform the economy.”
Anastassiades referred to his party’s “obligation as a responsible political force” to sound the alarm about “the accounting half-measures that we have seen up to now from the government” and to outline its proposals for “adopting the far-reaching reforms that will safeguard and strengthen our living standards, our prospects for growth and our social state.”
“Cyprus has all the prerequisites for facing up to the crisis and move forward. We just need to set aside useless obsessions and fixations. We just need to have vision, decisiveness, proper planning and mobilisation of all the productive forces,” he said.
Anastassiades said that DISY’s strategy was based on three axes; stimulating growth; running the state bodies and state property for the benefit of society as a whole; and improving the way the state machinery operates “so that it really serves society” and costs less.
“Growth is not a slogan. It is the only path out of this crisis, and a safe investment for a competitive economy. … But growth cannot be achieved just through words”, he said.
The DISY leader said the prerequisites for growth included easy and sufficient access to credit at the lowest possible rates of interest, conditions for healthy competition, which requires shielding regulatory bodies like the Central Bank, Securities and Exchange Commission and Competition Commission from political interference, and creating the conditions for macroeconomic stability and credibility and a business-friendly environment.
“We need to free the private sector from any superfluous bureaucratic burdens imposed by the state sector”, he said. Referring to the recent and “welcome” investment in Cyprus by Qatar, Anastassiades said that if locally-proposed projects had also been allowed to benefit from the same kind of fast-track approval procedure, “then we would not be speaking today of recession and unemployment”.
By way of an example, he said that currently there were 22 large projects – each worth over €100 million and totalling €10.1 billion – that are “unjustifiably” tied up in red tape.
“The time has come, in an undogmatic way and with an open mind, to examine additional use of modern methods of public-private partnerships, the possibility of privatising specific public bodies and abolishing others”. He added that DISY was not prepared to continue to maintain state bodies “which have become completely unnecessary or which could operate better in the private sector.”
Apart from generating an initial benefit of “massive revenues” for the state, the privatised bodies would be “inoculated with businesslike attitude and initiative, leading to an increase in productivity and a general improvement in their performance.”
