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"Electoral salary increase, less investment in municipalities", experts warn

2023-05-01 19:52:48Politikë SHKRUAR NGA ESMERALDA TOPI
"Electoral salary increase, less investment in municipalities",
Tirana

On the eve of the local elections on May 14, the government is rewarding 25,000 local government employees with salary increases, equal to half of the local administration. Each employee of the local government units is expected to receive at least 6,000 additional salary per month, which is promised to increase further during 2024. Experts warn of consequences for this initiative, which according to them has electoral purposes. Covering salaries will require additional financial resources, which means that municipalities will have to cut spending on other items. Most likely, this will translate into less investment from municipalities.

The government has decided to distribute 5 billion ALL in additional income for the salaries of local government employees over the course of two years, as part of the reform to increase the average salary in Albania.

25,000 employees of the local administration will receive at least 6,000 lek more in their salary every month starting from this month of May. This is the second category with the highest number of beneficiaries of the salary increase, after teachers who are counted in 36,570 people in the country.

The salary increase reform affects more than half of local administration employees, specifically 54% of the total number of employees at local government units. The increase is planned to be spread over two years divided at the level of 17-30%.

In the first year, the increase will be at least 6,000 ALL for each employee and the annual cost is estimated at 1.8 billion ALL. While in the second year (2024) even more significant growth is predicted and the annual financial effect is calculated at 3.2 billion ALL. According to the government, the bill for financing the salary increase will be covered by the increase in the level of the unconditional transfer from the central budget as well as from the income of the local government units themselves.

"Electoral salary increase, less investment in municipalities",

What do the experts think?

Economists and local government experts see the salary increase as an initiative with electoral goals, as they question the way of providing funds to meet the salary increase, especially from the local government units.

The President of the Association of Municipalities, Agron Haxhimali, says that the increase in salaries as a whole hides obvious electoral goals.

"WITHOUT DISCUSSION THAT THE POLICY OF INCREASING SALARIES IN THE LAST MONTH OF THE ELECTORAL CAMPAIGN IS THE KEY IN THE FUNCTION OF VOTES. THE GOVERNMENT HAD ALL THE POSSIBILITIES TO GIVE A PAY INCREASE (WHICH IS ACTUALLY NECESSARY FOR THE ADMINISTRATION AT EVERY LEVEL) AT THE END OF 2022 WHEN IT APPROVED THE BUDGET OF 2023", HAXHIMALI EXPRESSED AS HE EMPHASIZES THAT IF THE GOVERNMENT WOULD NOT HAVE A GOAL LIM HE SHOULD HAVE WAITED FOR THE VOTE TO IMPLEMENT THE WAGE REFORM AFTER MAY 14", says Agron Haxhimali, Association of Municipalities

"In the end, the facts and arguments lead to the approach of a government act to attract votes," argued Haxhimali for Faktoje.

Even Professor Selami Xhepa shares the same assessment. "That there is an electoral approach is obvious and there is no point of doubt, all as initiatives, but the part of the local government without any doubt, because it is the direct material interest. There is no question that yes," says Xhepa, adding that it remains unclear how the entire financial bill of the reform will be covered.

"IN MY JUDGMENT THIS WHOLE STORY IS ABSURD. THE FACT THAT EVEN THEY THEMSELVES DO NOT HAVE ANY KIND OF SECURITY AND THERE IS NO ONE IN A POSITION TO PROTECT THE REFORM WITH NUMBERS, PUTS THE INITIATIVE IN BIG QUESTION POINTS. FROM THE 83 BILLION THAT WE SPEND IN TOTAL ON SALARIES AND SOCIAL SECURITY, WE WILL ADD THESE 40 BILLION. ALMOST 50% OF THE FUND IS ADDITIONAL, WHICH MEANS IT IS A LOT OF MONEY FOR ONE YEAR AND THIS IS A POLICY THAT WILL CONTINUE. THEREFORE, IT SHOULD BE SPECIFIED WHERE THESE REALLOCATIONS WILL COME FROM, TO WHICH SECTOR WILL THEY BE REMOVED?", says Selami Xhepa.

While Merita Toska, local policy expert at Coplan, emphasizes another issue, the financial situation of municipalities. 

"THEY ARE PROMISES THAT CAN REALLY CAUSE MANY PROBLEMS IN THE FINANCIAL STABILITY OF THE MUNICIPALITIES, AS THIS IS NOT ASSOCIATED WITH AN INCREASE IN PRODUCTIVITY. COVERING THE WAGES WILL REQUIRE ADDITIONAL FINANCIAL RESOURCES, WHICH MEANS THAT THE MUNICIPALITIES WILL HAVE TO CUT SPENDING ON OTHER ITEMS TO COVER THE WAGES, WHICH WILL MOST LIKELY RESULT IN LESS INVESTMENT BY THE MUNICIPALITIES, LACK OF INVESTMENT BRINGS LITTLE DEVELOPMENT AND SO ON," says Merita Toska.

"Fish in the sea, the pan into the fire"

As all public administration employees are waiting for the first salary increase starting this month, as promised by Prime Minister Rama, the parliamentary commissions that should have approved the draft law for the salary increase, have not yet started discussions.

“Ligjet ishin parashikuar të diskutoheshin në seancë parlamentare ditën e enjte dhe siç ju thashë deputetë të dy krahëve më informuan që do të bëjnë propozime. Unë gjykoj dhe i propozoj komisionit për shkak të disa propozimeve që unë nuk i kam parë të zbardhura po i gjej të arsyeshme dhe këtu nuk them njërin krah, po i referohem të dy palëve, do t’i propozoja komisionit shtyrjen. Përpos kësaj edhe Komisioni i Ligjeve që ishte komision në cilësinë e dhënies së mendimit nuk e ka zhvilluar mbledhjen ditën e sotme. Ndaj të nderuar kolegë deputetë është një çështje që unë mendoj që meriton një shqyrtim akoma dhe më të thellë.”, lajmëroi në mbledhjen e 25 prillit, kryetari i Komisionit të Ekonomisë dhe Financave Eduard Shalsi.

This means that the draft will remain in the drawers of the Assembly until after May 14. With the end of the local elections, the commissions will resume the discussions that will pave the way for the approval of the salary increase.

130,330 employees out of 184,396 thousand in total will benefit from the salary increase reform in the public administration. In other words, the salary increase will affect 70% of the public sector in the country./ Faktoje.al


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