Employer Groups Call on Govt. to Cut Taxes, Not Raise Public Pay

By , 05 Feb 2018, 15:37 PM Business
Employer Groups Call on Govt. to Cut Taxes, Not Raise Public Pay Pixabay: niekverlaan - CC0

Share this:

Slovenia uses 11% of GDP for public sector wages. 

STA, February 5, 2018 - Three employer associations and the British- and German-Slovenian chambers of commerce have called on Prime Minister Miro Cerar not to yield to "largely populist demands of the public sector" over higher pay.

The Chamber of Commerce and Industry (GZS), the Chamber of Trade Crafts and Small Business (OZS), the Manager Association, the British-Slovenian and the Slovenian-German chambers of commerce sent a letter to Cerar, warning of the consequences that the public-sector trade unions' demands, estimated at a billion euro, could have for the country.

GZS head Boštjan Gorjup said that they were concerned by the trade unions' "unrealistic demands", because their implementation would cause economic stagnation.

Slovenia is already allocating 11% of GDP for public sector wages, which is one percentage point above the EU average, Gorjup said, adding that the wage bill would need to be cut by EUR 550m to be level with the EU average.

GZS director general Sonja Šmuc added that despite pay rises, the efficiency of the public sector had dropped by 3% in the past decade.

"The billion euros demanded by the public-sector trade unions could mean a thousand euro less for each employee if income tax was raised as a result.

"It can also mean a billion euro less for investment in schools, roads, bridges repair. Or it can mean 35,000 fewer public sector employees if the current wage bill is preserved and pay ratios among different groups changed," she warned.

Higher monthly wages in the public sector would be justified only if the efficiency of the sector rose. But probably the wages in the private sector would need to rise first, because this is what generates money flow into the budget and allows for public sector pay rises, Šmuc said.

The associations propose that the government cut taxes on wages instead and thus benefit all employees.

The Slovenian Business Club (SBC) also joined their call, demanding that the government cut pay taxes for all workers. It also urged the government to eliminate all taxes and levies introduced as austerity measures.

"If the government is abolishing austerity measures for everybody, it should also abolish them for companies, which will in turn be able to invest in creating new and better jobs," the SBC said in a press release.

It also called on the government to propose to the trade unions an overhaul to remove anomalies in the pay system but within the current scope of the wage bill.

According to the club, the Slovenian economy is still regressing in productivity, while the difference between the average pay in the private sector and the pay in the public sector doubled between October 2013 and October last year.

The calls come just before the second round of strikes announced for 12, 13 and 14 February by police officers, nurses and teachers, respectively.

Some 30,000 employees in the state administration, healthcare, social care and some educational institutions staged a strike on 24 January.

The wave of strikes was provoked by pay deals the government had struck with individual groups of professions, primarily doctors, and thus disrupted the agreed ratios in the public sector pay system.

Photo galleries and videos

This websie uses cookies. By continuing to browse the site you are agreeing to our use of cookies.