| Business |
The wrong target
THE new Chief Secretary has acted to
stop public servants seeking loans form private company sources.
Reasons advanced included the outrageous levels of interest often
charged by finance companies and individuals and the inability of
many public servants to repay these loans.
The move might have some merit if it stopped public servants from
becoming entangled in a web of debt to the detriment of families
and relatives. But the way in which it is reportedly being
implemented leads to some serious doubts.
The Finance Department has apparently been directed to cease all
salary deductions currently in place. This means that repayment of
sums owed by borrowers will become a matter for them to negotiate
with the commercial finance and loan operators and the banks.
The suddenness of that action seems likely to leave a large number
of public servants in an unenviable situation. Many companies loan
to public servants only on the basis of those formal repayment
arrangements with employing government departments
Those arrangements provide them with some guarantee of recouping
their loans. Their withdrawal may lead to demands being made for
immediate full repayment of loans, a prospect well beyond the
means of most public servants.
Far from easing an intolerable burden upon public servants, there
is a real chance of making the situation considerably worse. It is
not as though public servants broke any existing laws by arranging
these loans in the first place.
The custom has existed for decades and the approved method of
salary deduction repayments has similarly been a long-standing
feature.
Some affected public servants are already wondering whether the
Chief Secretary has the power to effectively declare void legally
contracted loan repayment arrangements between a public servant
and a commercial lending organisation.
Certainly it seems that notice might have been given by the Chief
Secretary to the parties involved before the ban was activated.
If the main intention was to assist public servants avoid a
serious burden of debt, more time should have been allowed for
debtors to extricate themselves through regular debt repayment.
At the same time a ban could have been introduced to bar any new
deductions from salaries being initiated.
One obvious question rides over and above these considerations.
Why are so many public servants making use of expensive outside
sources of income to bolster their public service salaries?
That’s the real issue and the one that the Chief Secretary’s move
does nothing to address.
It is not true to suggest that public servants are all profligates
living well beyond their means.
On the contrary, we would challenge parliamentarians to try and
support a family adequately on the salaries paid to the lower and
middle levels of the public service.
If they had to do so it is reasonable to predict that public
service wages would experience a sharp increase within days.
The real reason why so many low and mid-level public servants
spend their working lives borrowing money is because they have no
choice.
If they don’t borrow they cannot hope to survive in a city or
town. Salaries have long since ceased to be part of a workable
equation with the cost of living.
That’s the blunt truth.
Many letter writers to The National in recent days have raised the
question of increased wages and pointed out that no major
political party has addressed that issue in the lead-up to the
election campaign.
No such reluctance attaches itself to the shameful and ongoing
double, treble and quadruple dipping of political fingers in the
allowance and entitlements troughs.
These ever-reliable sources of funds have been significantly
bolstered in recent weeks by sudden injections of significant
amounts of money.
It does not seem that any sitting Member could be short of funds
to fight the coming election.
This is despite a small but significant chorus of voices raised in
protest, from the Ombudsman Commission, from Transparency
International, from economists and banks, from churches and from
other deeply worried sectors of the community.
It might be more relevant to start imposing a strong element of
control on these big spenders in preference to further limiting
the sources of money available to underpaid low and middle level
public servants.
 
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