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By George Mouskides
President, Association for the Promotion of Property Development and Manager, FOX Smart Estate Agency
The focal point of discussions during the past few weeks has been the state deficit and suggestions of how to slash it. Suggested steps range from taxing wealth and luxury cars to taxing houses over 300 sq.m. We want to point out from the outset that these are populist measures which sound well for voters but will at the same time do nothing to tackle the problem at hand. On the contrary, they will ditch whatever little consumption and financial movement there is in the market.
What must have been very clear by now is that Cyprus’ problem is that, in an attempt to cover growing state spending, we generate, year in year out, more debt. The economy is no longer in a position to withstand the burden of new taxation to cover the state’s needs in running costs and interest payments.
A few simple measures
There are several simple measures which will, if adopted, put state finances in order, without affecting drastically the interests of civil servants.
Here are some of these measures:
– Reduce the number of part-time employees hired by the state. The much-talked-about measure of hiring only one state employee for every four that retire is not being implemented. Statistics show that the number of part-timers being employed is growing.
– Transfers within the civil service. There are departments with redundant personnel while other departments are short of staff. These are gaps easily filled if the above practice is adopted.
– Overtime hours must be reduced. It is unheard of to have civil servants getting more money from overtime than their regular pay month after month.
– Serious steps must be taken to reduce or even abolish altogether perks and allowances enjoyed by high-ranking state officials.
– Shift allowances must be abolished and a more flexible work schedule adopted.
– Another phenomenon which is unacceptable and must be stopped is the use of state vehicles by state officials. It is beyond our understanding why police and National Guard officers must have cars to take them to work every day.
– Business trips and allowances must be reduced drastically.
– There must be a strict check before dishing out taxpayers’ money for travel expenses.
– Strict control of ridiculous waste of electricity. It is not uncommon for us to notice lights switched on in government buildings during the night and on weekends.
– A limit must be put to rentals of buildings to house government departments. Unnecessary contracts must be terminated.
– More Citizen Service Centers must be established and their role be strengthened.
– Government agencies must relocate to the outskirts of towns and the vacant ones in the town centre be used to generate income.
– Government buildings must play host to renewable energy solutions.
– Private initiative must be encouraged to develop state property (i.e. the site opposite the Hilton Hotel in Nicosia).
Don’t leave it to strangers
These are a few simple measures we can adopt to put our house in order, otherwise, very soon others will step in to enforce salary cuts and other measures that will only make things worse.
We reject imposing new taxes as the time is not right for such a move. What we need is growth and more jobs, not new taxes, businesses shutting down and rising unemployment.
We also oppose the idea of taxing dormant wealth because the real estate sector can generate income for the state, not through new taxation; it’s already carrying a heavy burden, but with growth incentives.
