ECONOMY

Public sector waste put on back burner

The government seems to have abandoned efforts to stem waste and inefficiency in the broader public sector and is resting its hopes for reducing the country’s fiscal deficit in 2008 on bolstering revenues. The 2008 budget, burdened with the cost of the government’s pre-election promises, provides for a rise in primary expenses and total spending in the main budget of 7.3 percent, which is higher than the projected nominal rise in gross domestic product of 7 percent. The wage bill for the public sector is seen as 9.2 percent higher, against 5.8 percent this year and 5.1 percent in 2006. This is not just the result of high increases in the pay of officers in the armed forces and other public servants, but also of the planned increase in the number of employees in the broader public sector. Operational expenses are budgeted to fall by 6.9 percent, compared to this year, when they shot up 23.5 percent due to extraordinary disbursements to those stricken by the devastating forest fires in the summer, election expenses and the payment of government debts to Olympic Airlines. If a comparison is made without such extraordinary, one-off items, operating expenses are still up by 10.2 percent from 2007 and public consumption spending by 5.2 percent. The deficit of social security and welfare organizations is foreseen as rising by 13.1 percent, to -8.5 billion, as a result of generous increases in farmers’ pensions and supplements to low-paid pensioners, as well as the skyrocketing costs of medical care after the abolition of the list of accepted prescribed pharmaceuticals. Healthcare expenses are even higher in reality, as the budget does not include hospital debts to their suppliers, which have again approached 3 billion in the three years since they were last settled.