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Public sector payroll
runs into Lm200m
by Franco Aloisio
Government expenditure on public sector’s payroll will
total Lm200m in 2001, mainly as a result of the substantial
wage increases for the 35,000-strong government employees, which
came into effect this month.
The Lm200m spent in public sector wages represent 12 per cent
of Malta’s GDP. In all, the increase attributed to the
public sector’s new collective agreement totals Lm26m,
of which Lm21m consist in wage increases, Lm2m in social security
increases and Lm3m in the form of increases in the cost of statutory
allowances. On average, the total wage increase will be of 15
per cent.
Although the government is attaching greater responsibility
and accountability with these increases, private sector organisations
are very concerned about the effect of such high wages in the
public sector.
Primarily, business bodies are worried that increases in salaries
for government employees will push up the expectations of workers
employed with the private sector. They say that private sector
employees, spearheaded by the unions, could start demanding
higher wages – especially for those companies having a
collective agreement.
Another concern is the effect of such a wage increase on the
country’s finances. On one hand, the government is curbing
on expenditure and increasing taxation, while on the other hand
government employees will be getting high wages – without
being necessarily justified in
terms of improved efficiency and accountability.
This last factor is the one which is most worrying for business
organisations, who claim that there are no provisions in the
public sector’s new collective agreement which aim
at increasing efficiency and productivity. From their point
of view, the trade unions – namely the Union Haddiema Maghqudin,
which negotiated the collective agreement for government employees
– claim that the public sector workers will rise to the
occasion and perform as expected from them.
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