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Wage hike on hold until president elected

Parliament Speaker Nabih Berri heads a Parliament session to discuss the salary scale in Beirut, Wednesday, May 14, 2014. (The Daily Star/Hasan Shaaban)

BEIRUT: Parliament looks set to shelve the debate over the public sector salary scale for the coming weeks, as lawmakers will not be able to pass the legislation until a new president is elected, analysts told The Daily Star.

Any final agreement on the salary scale would require the president’s signature to become law, but MPs have made no progress on electing a successor to President Michel Sleiman, whose term in office expires on May 25.

“This means that the Union Coordination Committee, which spearheaded the strikes and sit-in over the past few weeks, has to wait until a president is elected,” economist Ghazi Wazni told The Daily Star.

Wazni said Christian MPs would not allow their colleagues in Parliament or the Cabinet to make any decision on the issue without passing the legislation to the president for his signature.

Parliament Speaker Nabih Berri adjourned Wednesday the session on funding the wage hike until May 27 after lawmakers failed to reach an agreement on two important items: taxes on illegal seafront properties and raising the value added tax.

Christian MPs have warned that they will boycott the May 27 session if a president is not elected before May 25, the constitutional deadline for the election.

MP Ghazi Youssef, who helped hammer out the proposals of the parliamentary committee, was confident that lawmakers would eventually reach a compromise.

“We achieved a lot Wednesday. We passed most of the tax proposals such as raising taxes on profits of banks and companies from 15 to 17 percent and agreed to increase taxes on interest on deposits and securities for both the depositors and banks from 5 to 7 percent,” Youssef told The Daily Star.

The MP dismissed reports that the lawmakers had increased taxes on individual incomes.

He added that most of the proposed $1.2 billion in funding for the salary scale had been secured during Wednesday’s parliamentary session.

The parliamentary committee has slashed the funding of the salary hike from $1.9 billion to $1.2 billion.

However, some lawmakers voiced their objection to the recommendations of the parliamentary committee, saying that the amendments would reduce the benefits provided to civil servants and public school teachers.

“These lawmakers did not tell us where we could find the money to finance the entire $1.9 billion package. We are looking for practical steps to finance the wages and not just statements,” Youssef said.

Youssef admitted that lawmakers could not reach a consensus on illegal beachfront properties.

“But I believe that the MPs will sooner or later bypass this issue and proceed with all the tax measures we have agreed upon,” he said.

A source familiar with the discussions told The Daily Star that most parliamentary blocs were coming up with excuses not to pass a proposal to tax sea properties.

“It seems that many politicians have a stake in the resorts and hotels that were built illegally along the coast and for this reason they will keep delaying any debate on this matter until further notice,” the source said.

Wazni argued that MPs could vote in favor of a proposal to raise the VAT from 10 to 15 percent on luxury goods but had no intention to approve tax hikes that would affect low-income citizens.

“A 15 percent VAT on luxury goods such as cars, electronics and alcoholic beverages will generate less than $100 million for the treasury a year,” he said.

Wazni added that former prime minister and MP Fouad Siniora insisted on raising the VAT on all items from 10 to 11 percent and eventually to 12 percent in accordance with the conditions set during the Paris III donors conference.

Both Youssef and Wazni believe that the UCC will accept the amended bill even though it was aspiring for a 121 percent increase in wages.

“Based on our proposals, the average wage increase will range between 50 percent to 60 percent, depending on the ranks and positions of the civil servants,” Youssef said.

He acknowledged that reducing waste in some government departments could not be achieved in such a short period.

UCC officials said they would hold another meeting on May 25 to mull their next step but agreed to call off the strikes for the time being.

 
A version of this article appeared in the print edition of The Daily Star on May 16, 2014, on page 5.

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Summary

Parliament looks set to shelve the debate over the public sector salary scale for the coming weeks, as lawmakers will not be able to pass the legislation until a new president is elected, analysts told The Daily Star.

Parliament Speaker Nabih Berri adjourned Wednesday the session on funding the wage hike until May 27 after lawmakers failed to reach an agreement on two important items: taxes on illegal seafront properties and raising the value added tax.

MP Ghazi Youssef, who helped hammer out the proposals of the parliamentary committee, was confident that lawmakers would eventually reach a compromise.

Wazni added that former prime minister and MP Fouad Siniora insisted on raising the VAT on all items from 10 to 11 percent and eventually to 12 percent in accordance with the conditions set during the Paris III donors conference.

Both Youssef and Wazni believe that the UCC will accept the amended bill even though it was aspiring for a 121 percent increase in wages.


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