ECONOMY

Taxpayers should know which public ‘charities’ they pay into

The standard public transportation bus ticket in Athens costs about 20 euro cents to produce and is sold for 45 cents. This is a telling example of how the broader public sector operates, with a significant amount of public money going toward what are euphemistically described as «public utilities.» Even in the now defunct Soviet Union, state companies sold their products to one another at prices calculated by adding to expenses an amount named «added value,» instead of the forbidden word «profit.» Today’s Greek public companies evidently do not need even Soviet pretexts. They believe their task is to provide a social service by incurring losses covered by the state budget or loans that taxpayers will have to pay. While these companies operate like charities, they pretend they are enterprises. The Athens Public Transport Organization (OASA), for example, warned recently that the sacking of about 100 ticket inspectors with temporary contracts, earning 750 euros monthly, does not mean inspections are to be abolished. There are another 550 inspectors with permanent contracts who get paid about five times as much, but their permanent employment status is never called into question. The cost of their services is exorbitantly high and represents a disproportionate portion of OASA’s costs. This example is just indicative of the prevailing mentality. Any fiscal rehabilitation measures can have no impact unless there are real parallel efforts in the broader public sector. Even if it is wishful thinking (or undesirable) for some public companies to be turned into real enterprises, at least there should be transparency. Those that can become real companies rather than agents of social policy should be clearly operating on private economic criteria. Conversely, taxpayers should know which of them are subsidized by the government as they provide a social service and do not target any form of profit. They should also know what is the real cost of a bus fare or a good National Theater performance. Perhaps the biggest revolution in the public sector would be abiding by the classic accounting rules. No need for lofty targets and plans.