‘Subsidise business costs to prevent price hikes’
BUSINESS costs should be subsidised to prevent the new minimum wage from making life more expensive, the North Cyprus FastMoving Consumer Goods Suppliers Association (Tutder) has said.
Last week representatives of the government, employers and workers agreed to a 37 per cent increase in the monthly minimum wage, from 9,885TL (8,600TL net) to 13,563TL (11,800TL net), the first increase since July.
However the news immediately led to fears of a new wave of price rises by firms passing on the costs of the wage increase to consumers.
A statement issued on behalf of the Tutder board of directors and chairman Engin Yeşilada said: “Following the determination of the new minimum wage, on the one hand there will be complaints from employees who will be unsatisfied with the increase and on the other hand statements by employers who will complain that they cannot afford it.
“However, it is a fact that life will become even more expensive. . . An increase in the minimum wage will not increase consumer’s purchasing power.
“On the contrary, [it] will trigger price increases and perhaps a rise in unemployment.”
Tutder said that when increasing the minimum wage, the government should emulate policies adopted in Turkey, such as a 16 per cent discount on electricity used by businesses and industry, to reduce firms’ production costs.
“For almost two years, Tutder has advocated that the state should subsidise energy prices for our country’s local industrialists to reduce production costs and has supported establishing solar energy systems with grants to our local industry,” the statement said.
“Another step that needs to be taken is to get rid of VAT and duty on imports, primarily on food items. . . By taking Turkey’s example into account in particular, we hope our government will make a similar policy change.
“Otherwise, with the ‘same old, same old’ policy, costs will increase, along with an increase in the population that will fall below the breadline and the number of children who cannot access basic food items, pushing us full tilt towards social tensions.
“The government should sit down with representatives from various sectors and determine a new sustainable economic policy before it is too late.”