With the aim of applying the general increases of 1,5% in the public sector from salaries and pensions in October 2024, the discussion of the relevant bill submitted by the Government began in the Parliamentary Finance Committee. MPs, however, expressed reservations about these universal increases, while parties have already declared their intention to vote against.
The granting of general increases agreed with the trade unions on July 18, 2024, will, according to the bill, have a budgetary impact of €52,7 million for the years 2024 and 2025.
As the representative of the Ministry of Finance, Cleopatra Charalambous, told the Committee, it is the first time that a general increase has been granted since 2009 for pensions and salaries. Based on the agreement, the 1.5% increase will apply from October 1, 2024 and there is a commitment by the parties that in 2025 there will be no request for other general increases. The increase, as mentioned, applies to permanent, temporary and hourly government personnel.
The representative of the General Accounting Office called for the bill to be passed as soon as possible so that the increases can be included in the October payrolls and do not have to be paid retroactively, which would increase administrative costs. To achieve this, he said, the bill should be voted on by Thursday, October 10.
Responding to questions from MPs, Panikos Constantinou on behalf of the Ministry of Finance stated that the Ministry of Finance is concerned about the rate of wage growth and for this reason they called on the International Monetary Fund to conduct a study. For now, as he said, they only have the draft and expect the final study soon to make decisions in dialogue with the trade unions. The goal, as he said, is to bring the rate of wage growth to a rational basis in the long term so that the public finances are not at risk in the medium term.
Regarding the current increases, he said that the amounts are small and are not expected to create a problem in the budget.
Asked whether the raises should be linked to productivity, he said it was difficult to measure productivity since there was no way to evaluate civil servants.
Responding, on behalf of the Ministry of Finance, to the percentage of increases for low-wage workers, Mrs. Charalambous stated that the increase will be greater than 1,5% for low-wage employees below the 2nd level of A6 in order to ensure the minimum amount agreed upon and it is 27.4 euros. Indicatively, he said that for the A1 and A2 scale the increase will be around 2,1% and 2,4% for the new entrants in these levels.
When asked why pensioners' raises were deemed necessary, since such a thing is not linked to productivity, he said that according to the law, general public sector increases are also granted to public sector pensioners.
At the same time, he said that the general increases will be given to those who the legislation expressly provides that they get the same increases as public servants, including judges and the Attorney General.
Increases, according to the representative of the Ministry of Finance, will not be granted to the President of the Republic, Ministers, MPs, Mayors and other officials.
When asked why there was no ceiling on increases for higher salaries, he noted that based on studies, while for low-paid civil servants the salary is higher in the lower scales compared to the private sector, the opposite is true for managerial positions, where in the private sector they are paid better than the public.
Regarding the issue of upgrading the low levels A1-2-5, for which there was a commitment by the Government to start the dialogue in the second half of 2024, the representative of the Ministry confirmed the commitment.
The trade unions with which the agreement was concluded expressed their satisfaction with the bill.
The General Secretary of PASYDY, Stratis Matthaiou, pointed out that after 15 years it is the first time that general increases are given, something that had to be done taking into account the accuracy observed.
The General Secretary of SIDIKEK - PEO Nikos Grigoriou stated that given the fact that the GDP has grown at a high rate, these increases have been given rightly. He also expressed satisfaction for securing the minimum amount of increase for low-wage earners, which amounts to 27,4 euros per month.
The General Secretary of OHO-SEC Andreas Ilias stated that the increases were a result of the 15-year sacrifice made by the workers against the difficulties with the successive crises that Cyprus faced. Workers, he added, now get the minimum they are entitled to from the wealth produced with a commitment that in 2025 no across-the-board increases will be claimed.
On behalf of the "Equality" trade union, satisfaction was expressed for the agreement since there are surpluses, however it was pointed out that the trade union did not participate in the negotiation even though it represents 5.000 public sector workers. At the same time, he expressed the anxiety of the branch staff of the School Boards as to whether the agreement will apply to them as well, in order to receive the assurance from the Ministry of Finance that they will indeed be included.
The Cypriot Federation of Independent Trade Unions also noted its absence from the agreement negotiations. However, he expressed satisfaction at the reinstatement of the general increases and wished that the next general increases would start from the beginning of the year and not during the year.
DISY disagreement and party reservations
In his statements, the chairman of the Commission Chrysis Pantelidis noted that this agreement is the first concession of general increases after 15 years, the product of an agreement between the Government and the trade unions. He said the Commission's intention is to complete the discussion by October to implement it in the most reasonable way possible.
Asked whether DIKO is concerned with the issue of the increase in the state payroll, he said that the decision of the Ministry of Finance is also combined with the good course of the Cypriot economy and the fact that the workers for 15 years have suffered many sacrifices in the effort to recover the Republic of Cyprus .
Regarding the abolition of the emergency support measures, Mr. Pantelidis said that when the Government decided on the zero VAT rate, it was met with irony that it was nothing important, while now they think that if it is abolished, everything will collapse. He added that every measure must have a beginning and an end and the Government's decision is justified, while he said that emergency measures make sense when they are linked to public finances.
DISY Member of Parliament Onoufrios Koullas expressed the party's concern about the continuous inflation of the state payroll, which is close to an increase of 500 million euros per year. He added that the reinstatement of horizontal and missed increases will boost this dynamic growth.
He noted that against the pressing demands of society, DISY will not vote for this bill. Asked if the party disagreed with across-the-board increases, he said they believed they had already been scrapped and that there would be more careful measures for more specific categories of workers, rather than ill-advised across-the-board increases that favor those less in need.
Mr. Koullas added that these increases coincide with the abolition of support measures is an oxymoron, however he expressed disagreement with making the emergency measures essentially permanent. He said that before lifting the emergency measures, the state should put other targeted measures in place.
AKEL Member of Parliament Andreas Kavkalias said that the Government should have included in this proposal the issue of the upgrading of workers on the A1-2-5 scale who were left out of the agreement on the promotion of low-wage employees. He added that it is required that this issue be resolved in the immediate future and that there be the corresponding appropriations in the 2025 budget. He also said that there should also be arrangements for increases in Social Insurance Fund pensions and for measures to support society to deal with the accuracy, after the lifting of emergency measures.
He added that AKEL will examine the bill and make a position next week, noting however that for the party the fact that the bill is the product of an agreement between trade unions and the executive power counts.
DIPA Member of Parliament Alekos Tryfonidis highlighted the delay observed in the implementation of the commitment to upgrade the lowest paid civil servants in the A1-5-7 scales and spoke of a breach of the commitment of the President of the Republic that the relevant dialogue will begin in the second semester of 2024. He called on the President to give the green light to the Minister of Finance to start the dialogue.
He said at the same time that it is outrageous to hear that productivity cannot be measured and that the best are rewarded and that they were told otherwise when they voted for the reform of the public service. He asked to present the plan to increase productivity in the public sector, which according to him can be done on the model of CYTA where measurable targets were entered.
In relation to the abolition of the Government's emergency support measures, he said that DIPA-Synergasia is preparing relevant recommendations to the Government to compensate for the decision for vulnerable groups.
The MP of the Environmental Movement - Citizens' Cooperation Stavros Papadouris stated that he has serious reservations about the bill and emphasized the difference between public and private sector payroll. He said that they should seriously and thoroughly deal with the issue in order not to reach the same point as in 2013. He raised the issue of the productivity of specific public services that do not respond to citizens' requests and spoke of a "basket" that rewards these behaviors.
He also noted that on the one hand there is the termination of some subsidies and on the other hand this issue is being discussed. He did not rule out the possibility that they would vote against the bill, which is a challenge, as he said, for the low-paid in the private sector.