Our View: Why are taxpayers forced to fund new civil servant pay rise?

The subservience of the political parties to the unions, which was demonstrated at the House finance committee meeting on Monday, is extremely worrying. Only two out of six parties represented at the meeting – Disy and the Greens– expressed reservations about the government’s decision to give a 1.5 per cent pay increase to all public service employees, the island’s best-paid and least productive workforce; it was also given to the public sector pensioners who are paid obscenely high monthly pensions.

This is a class of workers that are paid CoLA every year and are guaranteed annual pay increments regardless of performance. Pay goes up every year for every public employee so what was the justification of the 1.5 per cent across-the-board increase, considering that average wages in the public sector are significantly higher than in the much more productive private sector? There was no economic justification for the pay increase, the only explanation given was that it was agreed after consultations between unions and the finance ministry.

And when Disy deputy and former finance minister Harris Georgiades spoke about the “derailing” of the economy as a result of labour system implemented in Cyprus he was attacked by the representatives of the unions, who claimed their members had made big sacrifices during the economic crisis and the assistances programme, as if private sector workers had not. They also warned that the legislature could not block the pay rises as this would give the message that the institution of collective agreements (by which unions representing many workers impose their diktats on employers) was weakened.

The only mildly critical comment made by representatives of the parties beholden to the unions was that perhaps the pay increase should be accompanied by an increase in productivity. Lip service has been paid to productivity for decades, but it will never be linked to pay because unions do not permit it. In fact, these parties complained that the wages of the lowest-paid public employees must be increased so the gap with highest-paid was reduced.

Only Disy put the issue in its proper context. Deputy Onoufrios Koullas pointed out the staggering 35 per cent increase in public payroll in a three-year period. In 2022 it stood at €3.2bn while in 2025, thanks to continuous pay rises and the hiring of more employees, it will have reached €4.3bn, an increase of €1.1bn in three years. And this, at a time of digitisation. Ironically, one of the election promises of President Nikos Christodoulides was the digital transformation, but it seems in Cyprus not even the digitisation of the state – if it ever materialises will stop the uncontrolled growth of the public payroll.

The growth of the public payroll should worry all the political parties and rejecting the government’s proposed pay rises would be a very good place to start. Without applying pressure on the government it will carry on wasting taxpayer’s money on rises for the economy’s least productive and best rewarded workers. It is high time the parties showed arrogant union bosses that they are not in charge of running the economy.