The budget impact of pay rises
The government in Bucharest believes that the pay rises and the scrapping of various taxes passed by Parliament will have a bad impact on the budget.
Roxana Vasile, 02.11.2016, 13:53
The increase of the Romanians incomes is a must. The minimum monthly wage in the economy is among the lowest in the European Union, being tantamount to about 280 Euros. However, the objective necessity of ensuring higher living standards with Romania having a high economic growth rate in recent years has to cope with the politicians predictable attitude.
In the run up to the forthcoming parliamentary elections due on December 11th, politicians suddenly remember those who must vote for them and resort to what in plastic words could be called “electoral alms”. In the meantime, the latter have developed! In the first years after the anti-communist revolution, such “gifts” so to say consisted of cooking oil, flour, caps, umbrellas, buckets or kitchen aprons.
Step by step, they have been replaced by legal initiatives that makes Parliament currently work with an uncommon feverishness. Rival parties aiming to take over power are even unanimous in voting for certain laws or resolutions. Special pensions, pay rises or tax cuts are at stake! In the run up to the parliamentary elections, the deputies of the joint parliamentary Commissions for budget-finance and labour on Tuesday amended the ordinance on public sector wages and introduced new categories of education and healthcare employees who will benefit from pay rises, though the salaries in those areas have already increased by 30% on an average over the last year.
More exactly, they agreed on a 15% increase of the education employees salaries as from January 1st 2017 and on a 15% increase of the healthcare employees salaries as from December 1st 2016. The deputies also decided that the pay rises of the administrative staff in the healthcare system be calculated depending on the 2016 salaries and not on those of 2009 as is the case now. The salaries of the employees of the health insurance companies have also been increased by 25%.
The budget impact announced by the Finance Ministry stands at about one billion Euros, but economists believe that it will be much bigger and 2017 will be an extremely difficult year. Technocrat Prime Minister Dacian Ciolos made a comprehensive analysis in this respect.
Dacian Ciolos: “All that Parliament has passed in preparation for the election campaign as it has unfortunately got used to doing in the run up to the elections, that is pay rises in all areas without a substantial analysis of the budget impact, all that stands at around 9 million lei, which means over one per cent of the GDP.”
In the 2008-2009 election years, the alms gifts approved by the political class of that time, jointly with the ensuing economic crisis triggered cuts in wages and pensions.
For similar situations to be further prevented, a law was passed in Romania according to which no laws sparking the increase of public sector staff spending or of pensions shall be promoted less than 180 days before the expiry of the governments mandate.
Dissatisfied employees have the right to hope for more and a better life. But as Minister of Labour, Dragos Paslaru said, when politicians take advantage of the employees discontent to get votes, dignity and decency are offended.
