Lithua­nia's Pub­lic Ser­vice re­form: smaller staff, cen­tralised se­lec­tion

The Baltic Times - - BALTIC NEWS - BNS/TBT Staff

Lithua­nia will have fewer pub­lic ser­vants, the se­lec­tion will be cen­tral­ized, their em­ployer will be free to set salaries and re­duce bonuses, how­ever, they will have more days off and money for good per­for­mance, ac­cord­ing to the re­form ini­ti­ated by the In­te­rior Min­istry that will still need ap­proval from the gov­ern­ment and the Seimas.

The pub­lic ser­vice in Lithua­nia is cur­rently reg­u­lated by pro­ce­dures ap­proved 15 years ago. The min­istry says that the past decade has brought sig­nif­i­cant changes to the reg­u­la­tion of se­lec­tion and as­sess­ment of em­ploy­ees, how­ever, new short­com­ings of le­gal reg­u­lated emerged, pre­vent­ing proper ef­fi­ciency of the pub­lic ser­vice.

"We now see that the pub­lic ser­vice is ex­ces­sively large, pay­ment for work re­mains un­clear and based on bonuses, while the re­spon­si­bil­ity for de­ci­sions is vague," In­te­rior Min­is­ter Eimutis Mi­si­u­nas said in a press re­lease.

The In­te­rior Min­istry sug­gests set­ting an in­ter­val of salaries for groups of pub­lic ser­vants, with the em­ployer free to choose from six op­tions of monthly pay.

The min­istry sug­gests that per­sons work­ing in the three top po­si­tions would be paid a fixed salary with­out an in­ter­val. Ac­cord­ing to the press re­lease, this would al­low avoid­ing sub­jec­tiv­ity and lack of trans­parency of re­mu­ner­a­tion, as well as un­wanted neg­a­tive im­pact.

The In­te­rior Min­istry said the cur­rent scheme in­cludes too many bonuses, there­fore, may lack trans­parency. Un­der the new pro­pos­als, bonuses for work ex­pe­ri­ence and qual­i­fi­ca­tions will be in­te­grated in the main salary, with the pos­si­bil­ity to pay two types of ex­tra pay only, namely, for tem­po­rary per­for­mance of an­other pub­lic ser­vant's func­tions and for de­vi­a­tion of reg­u­lar work­ing con­di­tions.

The min­istry sug­gests en­vis­ag­ing new mo­ti­va­tion mea­sures.

The pub­lic ser­vants will also be able to take up to ten days off ex­tra, how­ever, not more than three con­sec­u­tive days.

Cur­rently, the to­tal num­ber of pub­lic ser­vants including statu­tory of­fi­cers to­tals at about 52,6 00 peo­ple. In 2016, their av­er­age take-home monthly salary stood at 763 eu­ros.

Lithua­nian pres­i­dent: Govt-pro­posed tax re­form will raise heat­ing prices, in­come of rich

Lithua­nia's Pres­i­dent Dalia Gry­bauskaite says that the gov­ern­ment-pro­posed tax changes should en­sure more so­cial jus­tice, while the cur­rent pro­pos­als will raise heat­ing prices and the new ceil­ing on so­cial in­sur­ance pay­ments will fur­ther in­crease the in­come of those mak­ing the high­est salaries.

"For now, we see that the pack­age of pro­pos­als still con­tains in­crease of heat­ing prices for the pop­u­la­tion and the 'gift' of So­dra (so­cial in­surer) ceil­ing of 40 mil­lion eu­ros who make a lot of money," Gry­bauskaite said.

Mean­while, the cen­tral Bank of Lithua­nia says that the gov­ern­ment's course of tax changes is mainly cor­rect, how­ever, the pro­posed re­vi­sions are not enough to solve the most rel­e­vant prob­lems of taxes and the so­cial sys­tem.

"The pro­pos­als could be viewed as the start or the in­tro­duc­tion. To solve or at least mit­i­gate the main trou­bles of in­come in­equal­ity, small pen­sions and in­suf­fi­cient so­cial se­cu­rity, health is­sues, we should pro­vide more gen­er­ous fi­nanc­ing of many ar­eas. How­ever, we can­not af­ford this, as the level of rev­enue we col­lect and the level of pub­lic spend­ing is al­most the low­est in Europe, re­gard­less of grow­ing con­sump­tion," Vi­tas Vasil­i­auskas, the cen­tral bank's gov­er­nor, said in a press re­lease.

Econ­omy Min­is­ter Min­dau­gas Sinke­vi­cius says that a com­pro­mise on re­duced value-added tax (VAT) for ho­tels will keep them com­pet­i­tive.

"We have dozens of projects plan­ning to come to the big­gest cities and Vil­nius," the min­is­ter said.

From the start of 2018, a new re­duced 15-per cent VAT is pro­posed for ac­com­mo­da­tion ser­vices, which cur­rently pay a 9-per cent tar­iff – a rate that was planned to be dis­carded and re­placed by 21per cent tar­iff.

Sta­sys Jake­li­u­nas, chair­man of the par­lia­men­tary Bud­get and Fi­nance Com­mit­tee, ex­pressed ap­proval to the ma­jor­ity of the gov­ern­ment­pro­posed tax re­forms, how­ever, does not rule out cor­rec­tions made dur­ing par­lia­men­tary dis­cus­sions.

"I hope that the de­ci­sions in the Seimas will largely be in line with what the gov­ern­ment pro­posed, how­ever, we will not avoid temp­ta­tions of fi­nan­cial pop­ulism. Re­duced VAT on heat­ing is one of them. The de­ci­sions may be mod­i­fied, how­ever, I sup­port many of them," Jake­li­u­nas told the news con­fer­ence.

The up­dated gov­ern­ment pro­pos­als, which will be pre­sented to the so­ci­ety later on Thurs­day, en­vis­age keep­ing a re­duced VAT rate for heat­ing and ho­tels, how­ever, the rate would seek 15 per cent start­ing 2018.

Un­til June, a 9-per cent VAT tar­iff ap­plied to heat­ing, with plans to rein­tro­duce it in early Oc­to­ber un­til the end of the year.

A 5-per cent VAT rate would be ap­plied on books and pas­sen­ger trans­port, which cur­rently pay 9 per cent.

The 5-per cent VAT rate should con­tinue on com­pen­sated med­i­ca­tion and non­com­pen­sated pre­scrip­tion med­i­ca­tion ex­ceed­ing 300 eu­ros.

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