Our View: No excuse for misspending tax payers’ money

An article by the Disy deputy Averof Neophytou about the growth of the public sector payroll since President Nikos Christodoulides came to office should set alarm bells ringing. The growth, as Neophytou pointed out, is unsustainable, threatening to go out of control as happened during the Christofias presidency.

The economy is in much better shape now than it was in 2012 with healthy growth rates, a budget surplus and a decreasing public debt, but that is no justification for irresponsibly spending the taxpayer’s money on the least productive, most inefficient sector. The figures presented by Neophytou were very worrying, especially as government forecasts see a continuous rise to the payroll.

The scale of the problem can be understood better by putting figures in context. During the Christofias presidency (2008-2012) the public payroll increased from €2.5bn to €2.8bn, an increase of 13.8 per cent. In the first two years of the Christodoulides presidency the expenditure increased from €3.2bn at the end of 2022 to €3.9bn in 2024, an increase of 22 per cent.

It gets worse according to the government’s forecasts for the next three years of the presidency, starting from 2025. Neophytou said that according to finance ministry forecasts, the public sector wage bill will reach €4.9bn in 2028, a 54 per cent increase (€1.7bn) during Christodoulides’ term. As Neophytou pointed out, the increase of the payroll will increase four times as much in Christodoulides’ five years as it had done during the Christofias presidency, which was considered economically disastrous.

It is not just annual pay rises and CoLA that account for the higher payroll but also hiring more workers. From the end of 2022 to the end of 2024, the number of people on the public payroll increased by 3,375 (five per cent). The number of public employees reached its peak in 2011 (71,212) and fell to the lowest level (63,584) in 2015. At the end of 2024 it reached the record level of 75,353. In Cyprus, in the age of digitalisation, the public sector needs more workers than it did before digitalisation.

Neophytou had a suggestion, which had entered public debate in the past, for bringing the payroll under control – its annual increase should never exceed the rate of growth of the previous year. In 2025 it increased by 8 per cent whereas the rate of growth of the economy in 2024 was 3.1 per cent. Hundreds of millions of euros would be saved every year and could be used for social housing. In 2026, if his formula was followed, the government would have had an additional €711m for social policy.

We fear that with parliamentary elections in May, neither the parties nor the government will dare take up this matter and upset the entitled public employees. This why the finance minister, who is not relying on votes and has the authority to talk about the interests of the economy, should take up this issue now.