Catalan Parliament gives go-ahead for wage cuts in public sector
This measure is part of a plan to cut the public deficit at all levels of government. It has passed with the only positive votes from the parties in the Government´s Left-Wing coalition.
Barcelona (CNA).- The Catalan Parliament has ratified the law approved by the Government to reduce expenditure and the public deficit. The most controversial measure is average 5% cut in the public sector workers´ salary but it also includes increases in some taxes such as the inheritance tax. The legislation was backed by the Catalan chamber thanks to the support of the governing coalition parties: the Catalan Socialist Party (PSC), the Left-Wing Catalan Independence Party (ERC) and the Catalan Eco-Socialist Party (ICV). The Right-Wing opposition groups have rejected the law. The Minister of Economy and Finance, Antoni Castells, defended the need for action and has urged the opposition not to be so 'populist' when dealing with this subject.
The measures include an average 5% salary reduction in the public sector which affects both government officials as well as areas such as health and education and public companies. However, there will also be a rise in certain taxes, such as the inheritance charge -which will rise from 7 to 8% - and other taxation measures such as a vehicle pollution tax.
Castells pointed out that the Government has also taken other decisions, such as an increase in income tax for those with higher incomes, a slowdown on investment and measures to simplify the administration. The Minister argued that this is a package of 'coherent, ambitious and appropriate' measures for the current situation and which will be applied progressively. He reminded those present that in 2010 it will represent an impact of €1,670 million in deficit reduction, a 'very important' figure. Of these, €100 million come from changes in the tax laws.
The opposition parties all voted against the measures. The Centre-Right Catalan Nationalist Party (CiU), the largest group in the Parliament, opposed the measures in Catalonia although it did not do so some days ago in Madrid, where they abstained from a package regarding similar measures for the public administration at Spanish-level. The abstention in the Spanish Parliament was proceeded by an opposition in the Catalan one. The Catalan elections are approaching and pre-campaigning has already begun.
The Minister of Economy said that the aim is to meet the deficit reduction set by the EU for 2013 and added that "people now know they must make sacrifices and are willing to do so". Castells admitted the measures were not popular. "Nobody likes to hear that we are going to lower their salaries. The best news we would like to give is to tell them we are going to raise them by 20%”. But, he added, these measures are being taken “with the conviction that people know that these necessary shared efforts are for a worthwhile cause”.
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