Across-the-board pay cuts for civil servants and politicians are helping the government to balance the books in order to meet International Monetary Fund requirements for continued support.In January, the authorities reduced public sector salaries by 2 0% (e xc lud i ng the lowest four of the 21 salary s c a le s) a nd stopped the 13th-month bonus.In May, parliament reduced the salaries and subsidies for ministers, deputy ministers, state secretaries and deputies, among other office-holders and members of public bodies.Included was the pay for members of provincial assemblies, as they are “much higher than that of executive bodies at a provincial and national level, as well as of professional specialists from various sectors of the state”, the government said in a statement.Speaking during the vote, Economy and Finance Minister Max Tonela said “the proposed changes consist fundamentally of a downward revision of salaries and allowances for representation of the guardians and members of sovereign bodies and public bodies, with a view to contributing to reducing the gap between the top and the bottom.“The proposal is in line with the objectives of improving the management of public finances and aims to increase the resource envelope to finance vital sectors and boost the economy.”All public sector employees will be paid through an electronic payroll system. Further reduction of the wage bill will be achieved through an audit and "proof of life" of all public sector servants, according to Bo Li, deputy managing director and acting chair of the International Monetary Fund.As a result, the government wage bill is expected to decline from 16.4% of gross domestic product (GDP) in 2022 to 14.6% in 2023.The goal is to reduce it to 10% of GDP by 2030.This will be achieved partly through attrition, with only one of three vacancies being filled, except those in education, health, justice administration bodies and agriculture.The goal, according to Li, is to increase fiscal space for important spending priorities including human capital, safety nets, and climate-resilient infrastructure.Civil servant remuneration will also be fully taxed. Their ability to supplement their salaries has also been curtailed through amendments to the Public Probity Law, which strengthens the definition of “conf lict of interest” and requires the submission of declarations of financial interests by new public servants upon hiring.New regulations require all firms to register their beneficial owners at a centralised registry.
