Finance Committee begins reviewing salaries of independent institutions, judges, MPs

Parliament’s Finance Committee Chair Abdulla Jabir has said that the parliamentary select committee has begun reviewing the wages and salaries of members of independent institutions, judges and members of the parliament.

During a committee meeting held last Wednesday evening, Committee Chair Jabir stated that it was responsibility of the Finance Committee to review wages and salaries annually. He added that the new initiative by the committee was part of the cooperation extended to the new government of President Abdulla Yameen Abdul Gayoom who has promised to a cost reduction policy.

Article 102 of the constitution states, “The President, Vice President, members of the Cabinet, members of the People’s Majlis, including the Speaker and Deputy Speaker, members of the judiciary, and members of the Independent Commissions and Independent Offices shall be paid such salary and allowances as determined by the [Parliament]”

The task of determining salaries and allowances is entrusted to the Finance Committee under section 100(a) of the parliamentary rules of procedures.

President Yameen previously announced publicly that he would voluntarily be taking a fifty-percent pay cut, a promise which he made during the campaign for presidency. The president also at the time promised to slash the wages of political appointees by 30-50 percent, should he be elected in September.

Furthermore he at the time also pledged to cut the salaries of independent institutions claiming that it was a pivotal step for the country to avoid a sovereign default.

Two propositions were made to the Finance Committee which includes a proposition by interim Dhivehi Rayyithunge Party (DRP) Leader Mohamed ‘Colonel’ Nasheed’s proposition to reduce the wages of a parliament member to MVR 20,000 (US$1300).

The second proposition was put forth by the opposition Maldivian Democratic Party (MDP) MP Ilyas Labeeb who suggested that the committee to collectively bring down the wages of all state institutions including the parliament, the judiciary, the executive and Independent Institutions.

Neither of the propositions was put for a vote during Thursday evening’s Finance Committee meeting.

MP’s Remarks

Speaking during Thursday evening’s committee meeting, Judicial Service Commission (JSC) member and MDP MP Ahmed Hamza suggested the wages of judges and magistrates be brought down before doing the same for members of independent institutions and the parliament.

“President Yameen himself has taken a pay-cut. Right now we must all follow that example shown by him. Else, we would not be able bring down the recurrent costs [in the national budget],” the Biledhdhoo MP told the committee.

The ruling Progressive Party of Maldives (PPM) MP Ahmed ‘Redwave’ Saleem also spoke in support of the committee’s initiative but disagreed with the idea of cutting down salaries of specific institutions such as judges and the judiciary with the intent to undermine such an institution.

MP Saleem argued that should the committee wish to bring down the wages of state institutions, then it must be done with thorough research and without discriminating against specific institutions.

“Such efforts must be sincere. This should not be done with the motive to reduce the pay for the judiciary or any specific institution,” MP Saleem told the committee.

However, opposition MP Abdul Ghafoor ‘Gabey’ Moosa openly disagreed to the idea of pay cuts citing that it could lead to more educated Maldivians taking up employment abroad. He added that based on the current inflation rates, it cannot simply be said that the current wages of state institutions are too high.

Deputy Speaker of Parliament – who is also a member of the committee – also spoke in a similar fashion where he criticised the proposition to bring down the wages of just parliament members, members of the independent institutions and the judges.

He also argued that due to how certain laws have been framed, it was not possible for parliament to bring down wages of some positions. Although the committee must move forward with the pay-cut initiative, the Deputy Speaker stressed that the committee needed to identify the positions which it intends to bring down the wages of.

“We ought to thoroughly research and foresee the outcomes of our decision to bring down the wages of state institutions. We need to assess what changes need to be brought in order to do such a thing,” the Deputy Speaker noted.

Wednesday evening’s committee meeting was forced to conclude after Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed arrived in the meeting room and begun disrupting it, taking points of order in which he complained to the Committee Chair for not informing him of the meeting.

Things became heated when Committee Chair MP Abdulla Jabir decided to call off the session without giving attention to the complaints by MP Riyaz Rasheed. Verbal abuses and physical confrontations ensued between Riyaz Rasheed and Jabir.

The committee meeting concluded with the Committee Chair MP Jabir announcing that it will reconvene in three days time after collecting necessary documents and information regarding the work. The committee also agreed to commit two hours of its time to the matter.

Previous efforts

Last December, Parliament passed revisions to the pay scheme approved by the Finance Committee for senior officials in the executive, judiciary and independent institutions.

The revisions included a MVR 5,000 (US$324) pay raise for board members of the Maldives Inland Revenue Authority (MIRA). MIRA board members now receive monthly pay of MVR 15,500 (US$1,005).

Among other  changes brought at the time by the committee to the pay structure originally passed on December 28, 2010 was a monthly phone allowance of MVR 1,000 (US$65) for MPs, ministers, judges of the High Court and Supreme Court, members of independent commissions, the Prosecutor General, the Attorney General and the Governor of the Maldives Monetary Authority.

According the revisions, should the phone bills exceed MVR 1000, the officials were allowed to claim compensation for the cost of phone calls made for official purposes.

The Finance Committee at the time also decided to discontinue monthly salaries for drivers of cabinet minister’s cars (MVR 7,500) as well as an allowance for petrol cost (MVR 1,000). Ministers were instructed to settle the expenses out of their salaries from April 2013 onwards. However, the committee did not terminate similar expenses for other officials provided state cars.

The revisions also saw increment of the health insurance premium given for judges and their parents from MVR 4,500 (US$292) to MVR 7,000 (US$454).

Despite the calls, the committee at the time also decided against making any changes to the remuneration of parliament members.

The revised pay scheme was passed with 38 votes in favor, two against and five abstentions.

Numbers

The Maldives has one of the highest percentages of government employees to population of any country in the world, at around 11 percent.

Salaries and allowances have also rocketed up, unmatched by government revenue. Much of this growth occurred in the two years leading up to the 2008 election and the introduction of multi-party democracy.

An internal World Bank report leaked in 2010 showed that increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

With the introduction of the new constitution and its requirement for an assortment of independent institutions to oversee various aspects of government, the share of the wage bill to revenue soared to “an astronomical 89 percent.”

The President of the Maldives receives a base salary of MVR100,000 (US$6500) per month. During his government’s attempts to reduce civil servant spending on the urging of the International Monetary Fund (IMF), former President Mohamed Nasheed took a voluntary pay cut of 20 percent.

Despite this, the government’s attempt to impose austerity measures was blocked by the Civil Services Commission, leading to a series of scuffles between the Finance Ministry and the CSC.

The opposition at the time, now in power following Nasheed’s controversial resignation in 2012, contested Nasheed’s expenditure on 244 political appointees – a figure partly the result of the government’s early efforts to consolidate state employees under government-owned companies outside the purview of the CSC.

Figures released by the Ministry of Finance and Treasury showed that these 244 appointees were being paid MVR 99 million (US$6.4 million) a year, however Nasheed’s administration contested that this constituted just two percent of the state’s 2011 wage bill, comparing it to the 39 percent that went to the civil service, 24 percent to uniformed bodies, 17 percent to local councils, 10 percent to independent institutions, 5 percent to the judiciary, and 2 percent to parliament.

In comparison, Nasheed’s successor former President Mohamed Waheed Hassan’s government during 2012 spent MVR 60 million (US$3.9 million) on 136 appointees, according to figures procured by Sun Online.

At the time, the monthly spend included 19 Minister-level posts at MVR 57,500 (US$3730), 42 State Ministers (MVR 40,000-45,000, US$2600-2900), 58 Deputy Ministers (MVR 35,000, US$2250), five Deputy Under-Secretaries (MVR 30,000, US$1950) and 10 advisors to ministers (MVR 25,000, US$1620).

Overall public expenditure in 2012 increased 12 percent on the previous year.  This was in large part due to measures such as the intensified recruitment and promotion of a third of the police force, and repayment of civil servant salaries cut during the Nasheed era.

The Maldives Monetary Authority (MMA) noted that while total expenditure for the year was three percent lower than 2011, this was only due to the government’s failure to pay a large number of bills. Total public debt at the end of 2012 was 72 percent on GDP, the MMA stated.

Meanwhile, the government’s wage bill was in May projected to increase by 37 percent in 2013 as a result of hiring more employees, notably 864 new staff for the police and military – an increase of almost 20 percent.

In its professional opinion on the budget submitted to parliament, the Auditor General’s Office also observed that compared to 2012, the number of state employees was set to rise from 32,868 to 40,333 – resulting in MVR 1.3 billion (US$84.3 million) of additional expenditure in 2013.

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