THE ONLY positive aspect of this year’s debate of the 2014 state budget was that deputies stayed focused on the issue being discussed. It was a welcome change to hear deputies speaking on the economy, the consequences of the recession, the government’s austerity measures and so forth. For the first time in decades, the budget debate did not feature over-long diatribes about the Cyprus problem, by deputies seeking media attention for their uncompromising, patriotic views.
Thanks to an agreement by the party leaders, this was a Cyprus problem-free budget debate, with a 10-minute time limit on speeches which dealt with a very broad range of economy-related matters. Unfortunately, there were no positives of substance, as this was the first post-bailout budget which provided a 10 per cent cut in state spending (€700m), compared to 2013. Combined with the illiquidity of the banks this means there will be even less money powering the economy than there was this year, negatively affecting employment.
Everyone is aware that 2014 will be a more difficult year but unfortunately there is no alternative, given the dire state of public finances. AKEL, which voted against the ‘harsh austerity’ budget, criticised the low amount allocated to development and the welfare cuts, but this was cheap populism that ignored one minor detail – the lack of funds. Where would a bankrupt state, being kept afloat by international lenders, find the money for development projects that the deputies were clamouring for?
We did not hear any of them proposing bigger cuts to the public sector wage bill to use the money saved for development projects that would create jobs. In fact this would have been a fair redistribution of income as it would have reduced the earnings of the richest workers and provided work for our unemployed countrymen who earn nothing. But, as this column has said on countless occasions, none of the parties want to touch the privileges of the public sector fat cats.
The government is no exception as its budget showed. The public sector payroll, the biggest drain on public finances will be reduced by a paltry 1.5 per cent, with the state still spending €2.563 billion on it or 45 per cent of its total expenditure. A 10 per cent cut of state wage bill would have made €250 million available for development, but we did not hear any deputies mentioning this during the debate. Some things never change, not even at a time of recession, soaring unemployment and social deprivation.
But why should we expect any change from a government that wants to spend €100m for the purchase of two gunboats from Israel, at a time like this? While the House was debating the budget, the government submitted a bill to the defence committee, for the release of €128.5m, which it wanted urgently approved (the €28.5m would be spent on repair work on 11 Russian assault helicopters). It was an astonishingly provocative move by a government that had presented a tough austerity budget.
What is the justification of buying two gunboats at a time when families are depending on charity to feed and clothe themselves? Will they defend our EEZ? Certainly not – they could be sunk in a matter of seconds by an air force. But the government is in a hurry to have the expenditure approved because it is contractually obliged to pay half the amount before the end of the year. Commendably, DISY, despite belonging to the government camp, was the only party that refused to approve this monumental waste of money immediately, arguing that the matter could be discussed in the first three months of next year, when there would be a better idea about the state of public finances. If no payment is made before the end of the year the deal is off, according to press reports.
Predictably, no deputy raised this scandalous waste of money when talking about the budget, because defence spending is considered sacrosanct, even when it is on military equipment we do not need. Billions of euro have been squandered on defence over the years – a contributing factor to the state’s bankruptcy – but we refuse to learn anything from our mistakes of the past, happy to carry on repeating them. We may have approved an austerity budget, but as long as we refuse to abandon the practices that contributed to the state’s bankruptcy, the economy’s prospects will remain bleak.
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