Poor public services pay increases in the public sector – Economy

In the 2019 budget proposal that will be presented to MPs (with 27 other laws) today, the largest expenditure will be on salaries in the public sector, for which 294.44 billion dinars will be allocated, or about 22 billion more than this year. .

Photo: FoNet Dragan Antonic

This means that total salary expenditures will increase by 8.1%, but the net wages of public sector employees will increase by an average of 9% after the lifting of the unemployment contribution at the expense of the employer. The International Monetary Fund, the Budget Council and many other experts have warned that wages should not increase faster than nominal GDP, which, according to the country's forecast, will be 6.8% next year.

The Chairman of the Tax Council, Pavle Petrovic, said yesterday that "the increase in wages was too heavy compared to the increase in public investment, which undermines and displaces the country's economic growth" .

Another problem with public sector wages is that over the next year, a regulation on the restriction of employment in the public sector will be maintained, under which state institutions can not employ anyone. 39 with the approval of a special commission at the republic level. After four years of enforcement of this regulation, which reduces the public sector by about 10,000 employees per year, the quality of some public services is being questioned.

"Therefore, this gymnastics, banned additional employment, an additional number of employees will be reduced and this is not good.This measure has been extorted, it works for six or seven years, it It should be systematized to determine the needs of the population.The number of employees decreases because they retire, but go to critical places.Two to three thousand people need health care, Inspections need more people and their operation will soon be called into question, "said Petrović.

The October Tax Council's analysis indicates that the ban on employment has resulted in a growth in temporary, casual and similar commitments, as well as a deterioration in the structure of the company. Employment, accompanied by chronic and ineligible deficiencies in certain sectors, such as health, tax administration, ecology and EU accession. in agriculture.

The economist Ivan Nikolic admits that the restriction of employment is debatable in terms of efficiency as more and more people are employed under contracts and other bases.

"In some segments of the public sector, the limitation of jobs has lowered the quality of services below the optimum.We have saved a lot of things in previous years and brought a share of wages back into lower GDP. to the EU average and have matured the conditions necessary to abolish such a measure.But now it is over, the budget is done.Maybe next year, if the economic growth is proceeding as planned in the second half, such a decision is made, "Nikolic said.

For his part, Milojko Arsic, professor at the Faculty of Economics of Belgrade, believes that the limit of employment is less than two evils.

"We can not talk about a total ban on employment because people have been employed in the public sector in different ways.These regulations prevent the growth of employment in public institutions. It is true that some government authorities may not approve a job if needed.It is a bad substitute for a regulated employment system that needed to be put in place, "Arsic said. adding that in certain sectors such as health, the departure of doctors abroad posed a problem.

"The doctors leave Croatia and Romania while they are much better paid than in Serbia, because the countries of this region simply can not pay the salaries in Germany.This should be solved at the level of EU Perhaps the state should subsidize apartments intended for medical staff, not just the security organs, so that they keep them, of course, with the obligation to stay and work in Serbia, "said our interlocutor.

The third controversial issue of wage growth in the public sector is that this year and next year, these wages will rise twice as fast as those in the public sector. This completely reverses the trends of previous years when the gap between public sector wages and private sector wages has narrowed. In addition, wage increase of 7 to 12% in the public sector has not been used to eliminate disparities.

"This wage increase is not intended to eliminate disparities – for example, some security services have the highest wage growth and higher wages for the same job as people in other sectors, but for the first time for four years, the administration has recorded a 7% increase, which is the least.It is a populist lining of the low passions of the broad masses.These people are the core of the state, they write and apply laws, "says Arsic.