"The government's budget does not address today's challenges," said DISY President Annita Dimitriou today, criticizing the government and citing the expansion of inflexible spending, across-the-board increases, and untargeted measures. At the same time, she outlined her party’s twelve priorities for addressing the major economic challenges facing society.
Speaking at a press conference, Ms. Dimitriou said that the government’s fourth budget, “once again fails to address today’s challenges” because “it lacks a vision for growth and reform; it is more about managing problems than presenting a coherent plan for the future.”
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Ms. Dimitriou noted that the dominant economic phenomenon today is inflation and the high cost of living, in contrast to the past when the biggest problems were unemployment, public debt, and economic instability.
Noting that inflation was caused by external factors, she said, however, that “addressing its consequences required specific planning on the part of the government, and the government failed to correctly assess the circumstances and adjust its policy.”
He argued that DISY recognized very early on that the main problems of recent years are the cost of living—particularly for basic goods— energy costs—primarily regarding fuel and electricity—housing costs, and high interest rates.
“The combination of the above is unprecedented; it has never existed before, and that is why we have been saying for the past three years that a different mix of policies is needed, one that should have been implemented with boldness and determination. So we are repeating exactly the same thing today,” she said.
The DISY President noted that these problems are not temporary but will persist, adding that persistent inflation may become a structural phenomenon in the coming years.
She acknowledged that the other economic indicators are positive, as economic stability is being maintained and the economy’s growth rate is satisfactory, but she noted that “it cannot, on its own, address the problems of the high cost of living, housing, and starting a family.”
The DISY President noted that it is necessary to properly prioritize spending, promote real reforms in development investments, and implement a targeted and substantive social policy.
“Instead of these priorities, the government chose to expand inflexible spending, implement across-the-board increases, hire more staff, untargeted measures, while a large portion of available resources was channeled to those who need it least,” she said, adding that the government supported high-wage earners more than low-wage earners.
She then referred to her party’s priorities, starting with the need for more investment in the digitization of the state and the digital economy to increase productivity, reduce the size of the government, improve services for citizens and businesses, and cut bureaucratic costs.
Ms. Dimitriou also stated that DISY’s priority is to increase investment in research and innovation to shield the economy from challenges, development projects and infrastructure that improve quality of life and lower the cost of living.
“Instead of accelerating major projects and infrastructure initiatives, we are canceling them or implementing them at a snail’s pace. Accelerating development projects would lead to an increase in jobs and incomes and would strengthen the economy’s competitiveness in the medium term. Projects that would also help reduce traffic congestion, minimize wasted labor hours, and lower fuel consumption, small but substantial municipal and community development projects throughout Cyprus—we see and note that they have been left behind,” she said.
Anita Dimitriou also spoke of the need for “genuine pension reform that includes the Provident Funds,” with substantial incentives from the state, so as to significantly reduce the number of low pensions without penalizing the middle class. A reform, he added, that will ensure the sustainability of the Social Insurance Fund and will not place the burden on today’s workers.
He also noted that we need more investment to substantially reduce the cost of electricity for households and businesses. He said we need both small and large-scale energy storage systems, more solar power systems with a focus on vulnerable segments of the population and small businesses, and energy-saving investments in older buildings, machinery, and equipment.
He highlighted the need for more investment in charging infrastructure, the promotion of electric vehicles with a focus on large families and transportation companies, encouraging the phasing out of old vehicles to reduce fuel consumption, with a focus on workers who commute daily, and expanding school bus services within cities, and measures to encourage teleworking that will reduce commuting costs and traffic congestion costs.
She said that the family tax-exempt income—a targeted tax relief for middle-income families—must be implemented, and that she will complete the tax reform.
Ms. Dimitriou went on to say that there is also a need for measures to support the primary sector, as farmers and livestock breeders are being hit by increased production costs, a lack of irrigation water, and the consequences of foot-and-mouth disease.
In summary, he spoke about emergency income support, as well as further encouragement of structural interventions that will reduce future production costs, the implementation of universal full-day schooling to reduce household expenses, improving the fee structure for daycare centers, and the need for more resources to address the housing crisis.
Ms. Dimitriou said there is a need for targeted social policy with an emphasis on a substantial increase in child allowances and student grants, as well as support for low-income retirees, single-parent families, people with disabilities, and other vulnerable segments of the population.
“Inflation is not a temporary phenomenon; unfortunately, the cost of living will continue to rise, and this is where we say that the priorities of the budget and fiscal policy must be realigned away from inflexible spending and untargeted measures toward investments, substantive reforms, and targeted social policy,” he said, adding that DISY’s priorities constitute a coherent program that will boost growth, increase disposable income, and reduce the cost of living in the long term, just as the GESY did.
“DISY does not call for continuous increases in spending like other political forces. We call for a better allocation of spending,” he said, noting that without any further increase in spending, it is possible to achieve everything we propose, provided we keep rigid expenditures in check.
Responding to a question about whether to vote for or against the budget, he said that DISY does not disagree with the core of the budget but with the prioritization needed to address not only today’s realities but also the challenges ahead.
“For us, the passage of the budget is the supreme legislative act, and what I must assure you is that DISY will always act responsibly, just as it has done all these years,” he said.
In response to another question, Ms. Dimitriou highlighted the remarks made by MP Savias Orfanidou regarding the misallocation of state spending, in contrast to the 1,380 million in the state payroll over the past five years.
“Shouldn’t all this money have been given to citizens as relief measures—to those who need it most and have the greatest need?” Ms. Dimitriou asked. “Were all these positions truly an absolute priority for the state at a time of austerity and such serious and complex challenges? I am asking this rhetorically,” she said.
