Lebanon: Divisions Over Taxes Delaying Salary Hikes for Public Sector

Published June 29th, 2017 - 07:09 GMT
Divisions over proposed taxes to finance public sector's salary hikes in Lebanon might delay or even scuttle the motion. (AFP/ File)
Divisions over proposed taxes to finance public sector's salary hikes in Lebanon might delay or even scuttle the motion. (AFP/ File)

Despite reaffirmation by Nabih Berri Wednesday that the public sector’s wage hike bill would be the first item on the agenda of a Parliament session next month, there are fears that lingering divisions among lawmakers over proposed taxes to finance the salary increases might delay or even scuttle the motion.

A source close to Berri told The Daily Star he expects a legislative session to be held in the second half of July to discuss and approve a raft of draft laws, including the salary scale bill for civil servants. The source said he prefers to pass the salary scale bill before the 2017 draft state budget.

During his weekly meeting with lawmakers at his Ain al-Tineh residence Wednesday, Berri insisted that the legislative session needs to tackle issues currently impacting on the people’s lives and livelihood.

“Parliament is poised for a workshop in the framework of studying and approving draft laws and proposals, particularly vital and urgent ones, at the forefront of which is the salary scale bill,” Berri was quoted as saying by a number of MPs.

He added that once the 2017 draft state budget has been finalized by the parliamentary budget and finance committee, it would be listed on the agenda of the general assembly to discuss it and ratify it. The speaker had said this week that the draft state budget and the new salary scale bill would top the agenda when Parliament meets.

In remarks published Wednesday, Change and Reform bloc MP Ibrahim Kanaan, who heads the parliamentary Budget and Finance Committee, described the ratification of the 2017 draft budget as “essential” and “strategic,” saying its importance stemmed from the reforms it contained. He cited a “borrowing ceiling” as well as regulations on loans and grants. The ratification of the budget is key to ensuring “transparency and accountability in public spending,” he said.

In March, the Cabinet endorsed and referred the 2017 draft budget to Parliament for the first time in 12 years. The salary scale for civil servants, including the military and public school teachers, was not included, and will be treated as a separate issue before being integrated.

However, Kanaan, whose committee has been examining over the past few weeks the budget’s articles, including allocations for ministries, the presidency, the premiership and the speakership, appeared to be skeptical about a smooth passing of the salary scale bill. He linked the approval of the bill to what he called “a political will,” a clear allusion to differences among rival factions over the financing of the hefty salary increases estimated at $800 million annually.Although all parliamentary blocs have publicly voiced support for the approval of the salary scale bill, some of these blocs and political parties are believed to be tacitly opposing the bill, warning of the dire consequences of its cost on the country’s already struggling economy, burdened by more than $74 billion in public debt and endemic budget deficits.

“Voicing support for the salary scale bill is a very popular slogan that brings with it a political windfall on the eve of parliamentary elections [next year],” a political source said. “Yet, it remains to be seen whether parliamentary blocs will deliver on their declared promises to pass the salary scale bill next month.”

MP Alain Aoun from the Free Patriotic Movement stressed that the parties’ willingness is crucial for passing the salary scale bill. “The problem of the salary scale transcends the technical aspect. It involves the [parties’] will and acceptance to approve it,” he said in a TV interview. “Favorable circumstances must be created for the bill before listing it on the [Parliament] agenda.”

Fearing obstruction of the salary scale bill, the General Confederation of Lebanese Workers warned it would resort to street protests to push Parliament to ratify the bill. “The GCLW affirms its readiness to use all forms of pressure in the street, including sit-ins, demonstrations, and all democratic means to regain rights,” the labor union said in a statement. “While Speaker Nabih Berri and some political and parliamentary powers and ministers have underlined the need for the ratification of the salary scale bill, which has been thoroughly studied and examined over the past five years, there are still some voices warning of the negative repercussions on the national economy.”

The labor union hit back at the private sector, which has expressed its opposition to the salary scale, fearing it might lead to calls for a wage hike in their enterprises. “The GCLW affirms the right for civil servants, military personnel, retirees, and both private and public school teachers to this salary hike.”

Civil servants argue that the new wage scale would benefit approximately 600,000 families, demanding the pay hike to be retroactive from 2012.

But Future Movement MP Assem Araji said the salary scale was close to completion, with the means to fund it still being discussed. “During the last discussion [of the bill] in Parliament, the only issue had to do with funding it through tax [reforms],” he told the Voice of Lebanon radio station.

Asked whether there are now sources of funding other than the proposed taxes, Araji said that funding “can be sorted out in Parliament by amending articles related to tax reform.” He reiterated that the Future Movement wholeheartedly supported the salary scale bill.

 


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