Civil servants left guessing on salary hike

Civil servants left guessing on salary hike

JAKARTA (JP): President Soeharto announced yesterday that the
government will discuss the idea of raising civil servant
salaries with the House of Representatives (DPR) before making a
decision.

"As far as civil servant salaries are concerned, the
government will discuss it with the House to find the best
solution," Soeharto told a plenary House session while delivering
his annual budget speech.

The House is expected to complete deliberation of the present
1996/97 state budget draft by the end of next month.

The announcement leaves 4.5 million civil servants around the
country anxiously wondering if they will receive a much-needed
boost to cover rising inflation.

While acknowledging the pressing financial demands facing
civil servants, Soeharto said that even the slightest salary hike
would have far reaching implications for the government's budget.

"Every rise in civil servant salaries has a great impact on
state expenditures so all aspects must thoroughly be taken into
consideration," he said.

He explained that, even without any increase, the budget for
civil servants already accounts for about half of the total
routine expenses in the draft budget. The draft budget allocates
over Rp 27 trillion for salaries and wages.

Civil service wages have been a continuous source of concern
for the government. Government jobs have lost the level of appeal
experienced in the 1960s and 1970s to the higher salaries now
offered in private companies.

The sheer number of civil servants, 4.5-million strong,
creates a dilemma; any raise, no matter how slight, could put a
severe strain on the government's financial resources.

After last year's 10-percent hike the government had to find
an additional Rp 1.7 billion to cover its costs.

The highest monthly salary for civil servants at the IV/E
level is still Rp 500,000 (US$217.3), while some entry-level I/A
civil servants earn less than Rp 90,000.

Civil servants are also entitled to a family allowance,
receiving an additional 10 percent of their basic salary for a
spouse and 2 percent for each child up to two children. In
addition, those living in certain areas such as Irian Jaya and
East Timor are eligible for extra living allowances.

In 1993, the government raised the salary of civil servants
from the lowest to highest levels, by between 53 percent and 14
percent respectively. The raise boosted the income of a level I/A
government employee from Rp 51,000 to 78,000, and a level IV/E
with a 24-year career from Rp 399,200 to Rp 453,600.

Inflation in 1993 was 9.57 percent and dropped to less than
4.5 percent in 1994, when there was no salary increase. Inflation
last year ran at about 8.64 percent.

In his speech, Soeharto spoke of the hardships faced by civil
servants due to their modest government incomes.

"The government realizes that, despite such a big budget, the
civil servant's salary is very minimum compared to their living
expenses," he said.

Though the government and the House have yet to determine an
increase, the budget has allocated Rp 14.76 trillion to cover
salary expenses for those in the central government.

This number is already an 18.9 percent increase from last
year's Rp 12.41 trillion.

A further Rp 2.31 trillion will be earmarked for rice and food
allowances.

Another Rp 9.49 billion is allocated as subsidies for
personnel expenses in the regional governments. (mds)