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Bucharest
March 8, 2021
ECONOMY FINANCE&BANKING

Public sector salaries, new challenge for Gov’t.The budgetary impact of the changes brought to the public sector salary system totals RON 2.29 bln

The complete restructuring of the salary system in the public healthcare system and the introduction of a system of bonuses offered to public healthcare and public education personnel based on reform and performance criteria starting in January 2017, these are the main modifications brought by the public sector salary law.

According to the substantiation note of the draft emergency ordinance, entry-level employees in the public healthcare system will benefit from an extra 10 percent salary hike compared to other employees, in order to raise the attractiveness of a career in the domain. At the same time, annual, biannual and quarterly awards can be offered in the public healthcare and public education systems, within a limit of 2 percent of salary expenditures and of budget-approved funds, provided the performance criteria drafted by the Health Ministry and Education Ministry are met.

Other changes brought to the draft public sector salary ordinance aim at eliminating the salary differences for equal offices and equal labour within the same unit, by bringing salaries up to the maximum level paid within the unit/institution, for all labour branches, within the limit of budget funds. Within the central public administration, the elimination of salary differences will be made by bringing salaries at 70 percent of the level of salaries paid on August 1, 2016, at the Government’s General Secretariat. The measures are not applicable to territorial structures.

365,622 public sector employees, namely around 30 percent of total public sector employees, will benefit from the hiking of salaries brought about as a result of the changes to the salary system.

According to the authors of the ordinance, the immediate positive effects are the hiking of individual consumption and of the volume of taxes paid to the state budget and the social security budget. On the other hand, a possible impact on the trade balance, in the form of a hike in imports as a result of higher consumption, is limited by the fact that the measure falls within the public sector salary hike ceiling forecast for 2017 (RON 2.3 bln).

Premier Dacian Ciolos said that the project will not be approved within the Government meeting before it remains open to public consultation, “after which it will be adopted through emergency ordinance.” Ciolos added that the draft ordinance will not lower any salaries but will in fact hike salaries in certain domains.

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