BEIRUT

Lebanon News

Government’s salary increase decision comes under fire

Prime Minister Najib Mikati, right, heads a Cabinet session at the Grand Serail in Beirut. (The Daily Star/Dalati Nohra, HO)

BEIRUT: The Cabinet’s approval of salary increases for the public sector came under fire Friday from both the private sector and civil servants.

The private sector warned of the repercussions of the measure on the country’s struggling economy, while the civil servants criticized the decision to pay the raise in installments over five years.

Meanwhile, Prime Minister Najib Mikati rushed to reassure the Lebanese that the proposed taxes designed to generate funds to finance the public sector’s pay increase would not burden ordinary citizens.

“Financing the salary scale will come from sectors that do not directly affect the daily lives of citizens, including fines imposed on coastal property violations,” Mikati said in a statement released by his office.

“No to salaries without revenue and no to revenues that burden the citizens or new taxes.”

While acknowledging that citizens have the right to get salary increases to help them cope with financial difficulties, Mikati vowed to maintain monetary stability.

“We cannot allow the current financial and monetary stability to be threatened, especially amid the dangers surrounding our country and in light of the current economic slowdown in Lebanon and the region.”

Following two marathon sessions, the Cabinet approved Thursday a draft law for public sector salary increases without the amendments that had been demanded by some ministers, bringing an end to the monthslong dispute that led to strikes by civil servants.

Also approved were a series of taxes that would be used to finance the public sector’s pay increase, which is estimated to cost the government more than $1.6 billion annually. The measures included imposing fines on coastal properties, a tax on interest on bank deposits, a tax on real estate renovation and fees in exchange for construction permits.

Mikati touted his Cabinet’s decision to raise public sector salaries as a major achievement, saying that no government had revised salaries since 1996. He rejected March 14 accusations that his government was stalling on important issues, saying his Cabinet had proven its critics wrong. “Many have bet that this government would falter and fail. But it is proving daily that it continues to do its work and is determined to be productive and resolve issues,” Mikati said.

Meanwhile, the economic committees, or the private sector, rejected the new salary scale and the proposed taxes, warning that its costs would cause heavy damage to both the private and public sectors.

“The salary scale will have disastrous consequences on the state Treasury, which is already suffering from a gross financial deficit, and on the economy and citizens,” the committees said in a statement. They warned that the imposition of new taxes on economic institutions and citizens would trigger a social “explosion.”

The Union Coordination Committee, a coalition of private and public school teachers and public sector employees (civil servants), praised the approval of the salary scale but rejected the government’s decision to pay the raise in installments.

In a statement after an extraordinary meeting to assess the Cabinet’s decision, the UCC cited what it called “loopholes” in the salary scale, and said that the installment would lead to loss of the value of the raise. “This is in addition to the injustice inflicted on retired employees and contract employees,” the statement said.

Praising the approval of the salary scale as “a moral push forward” achieved as a result of the UCC’s unity, the statement said: “The committee registered its absolute rejection of the salary scale installment, saying this installment was a violation of the agreement reached by the UCC with the ministerial committee. It called on the government to approve the salary scale fully in the formula agreed upon with the UCC.”

The UCC called for an enlarged union conference on Sept. 20 at UNESCO Palace to press for the cancellation of the raise installment.

Speaking to Al-Jadeed TV Friday night, Hanna Gharib, head of the UCC, said the UCC categorically rejected the raise installment over five years.

“There is a big difference between cashing the raise at one time and getting it after five years. After five years, the raise will lose its value and benefit.”

But Education Minister Hassan Diab said that the Cabinet’s approval of the salary scale was a “win-win situation.”

“My personal feeling is that this is a win-win situation in many ways because it has for the first time since over 14 years, revised the salary scale,” Diab told The Daily Star Friday in an interview. “If we look at instructors going in to teach in elementary and middle school, right now the [monthly] salary [of each] is about a LL1.088 million ... After the two additions pertaining to the cost of living and the new salary scale, it becomes LL1.5 million.”

These figures, according to Diab, indicate that the new salary scale is not “on Mars, it is somewhere well-grounded on earth.”

“It is much better than before and still reasonable,” he said.

However, Diab acknowledged that some of the monthly salaries offered by the salary scale are not enough to meet the demands of a family.

“You know that $1,000 per month is not enough for a family on average,” he said. – With additional reporting by Wassim Mroueh

 
A version of this article appeared in the print edition of The Daily Star on September 08, 2012, on page 1.

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