The government of Tassos Papadopoulos announced a surprise package of social benefits amounting up to CYP 75 mln or EUR 128 mln, which political opponents described as a desperate attempt by the incumbent seeking a second term in next February Presidential elections to win over votes.
“Election panic†is how a number of opposition parties and newspapers described the measure, which they charged is directly related to a decline in the ratings of Papadopoulos according to recent polls.
The seven-point package is the latest in a string of money-back measures announced by the government that include VAT reductions in some sectors, tax cuts on heating fuel and increased benefits.
Papadopoulos said that until now the government has spent CYP250 mln on social cohesion packages. In an address to the public, he dismissed suggestions that the package was related to the elections, and instead said as state finances were improving, because of the sacrifices taken earlier by the public and as a result of the prudent handling of state affairs by the government, his cabinet was now in a position to offer the benefits back to the public.
The government recently announced that 2007 would see a budget surplus, of 1.5 percent of GDP, instead of a deficit as initially forecasted.
Top of the new list is a further reduction on heating fuel tax from 7.3 cents per litre to 1.2 cents per litre for the months December March, which as the government pointed, is the lowest tax allowed under EU rules.
It was only two months ago the same tax fell from 11.3 cents per litre to 7.3 cents and only three weeks since Finance Minister Michalis Sarris said there would be no further cuts in heating fuel taxes.
Others to benefit will be around 100,000 pensioners whose income is less than CYP500 a month. They will receive a one-off payment of CYP300. Those whose monthly income is more than CYP500 but less than CYP700 will receive a one-off payment of CYP100.
Large families will see a ten percent increase in benefits and National Guardsmen from large families will be given an extra CYP10 per month. These had been a demand from the large families association, Papadopoulos said.
The remainder of the money, around CYP30 million will be used to set up a social welfare council, Papadopoulos said when announcing the package.
Papadopoulos said for his government, the success of economic policy was not an end in itself but a way to better the life of the citizens.
“This is what we said and this is what we have done,†he said. “And each time we achieved our objectives we shared the profits of our policy with three packages of social measures that surpass CYP250 mln.â€
Loucas Fourlas, the spokesman for independent presidential candidate Ioannis Kasoulides backed by DISY wondered where these measures worth millions came from, given that only days ago Papadopoulos’ ministers were saying the economy could not afford any more social packages,
Independent candidate Costas Themistocleous made a similar statement but he said Papadopoulos must have realised that he could no longer use the Annan plan to influence Cypriot voters “so he has chosen another method,†he said.
DISY deputy Lefteris Christoforou attributed the new package to a fall in the percentage of the vote. He wondered why it took the government five years to realise there were social problems and that some Cypriots had economic needs.
“Tassos Papadopoulos took no measures for hundreds thousands of wage earners and particularly for the 135,000 who earn less than £10,000 annually,†he said.
“This country needs a president who will be on the side of the people from the first day and not occasionally, casually or during a pre-election period.â€
AKEL’s Nicos Katsourides the meaning of announcing a social package 74 days before an election spoke for itself.
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