Fr, 30.09.2022

An old law raises the salary of top civil servants

An old law raises the salary of top civil servants
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The salary of senior civil servants, such as Supreme Court Chairman Villu Kõve, Prime Minister Kaja Kallas, President Alar Karis and Riigikogu Chairman Jüri Ratas, is expected to increase by more than 1000 euros.
The salary of senior civil servants, such as Supreme Court Chairman Villu Kõve, Prime Minister Kaja Kallas, President Alar Karis and Riigikogu Chairman Jüri Ratas, is expected to increase by more than 1000 euros. Photo: Kollaaž
  • The predictable salary rise is due to an old law.
  • Former president of the Riigikogu recommends setting top officials’ wages for four years.
  • Present politicians say it is understandable that the rise seems unfair to the people.

Senior civil servants can expect a sizeable salary increase next year because their salary in indexed according to an old law.

The law stipulates that the salaries of senior civil servants increase every year in April according to the receipt of the pension insurance part of the social tax of the previous year, i.e. salary growth and inflation. Eighty percent of the increase is due to the previous year's salary increase and 20 percent to the price increase.

As of now, it is not possible to accurately estimate the salary change of high-ranking civil servants, but Postimees calculated the magnitudes based on the latest available data. Since there is only eight months of wage growth data from 2022, we used their comparison with the same period last year to calculate the percentages.

Significant increase

According to the calculations, the president of the Republic, the chairman of the Riigikogu, the prime minister and the chairman of the Supreme Court will receive the biggest salary increase. Their salary will increase by 1,024 euros, i.e. in the future they will earn 8,326 euros and 95 cents. Epp-Mare Kukemelk, a representative of the president's office, told Postimees that the president and senior civil servants cannot change the existing laws, including those concerning their own salaries. This right belongs to the parliament as the legislator.

“President Alar Karis has in many meetings with politicians and also in his public appearances considered it of primary importance that decisions made in shaping the country's budget strategy and preparing the next year's state budget would give a salary increase to the people who need it the most,” said Kukemelk. “These are certainly, for example, educational and medical workers, kindergarteners, rescuers, cultural workers, police officers and border guards, whose work affects the security, well-being and future of all of us.”

The salary increase will also concern the vice-chairmen of the Riigikogu, the auditor general, the chancellor of justice, members of the Supreme Court, the prosecutor general, ministers, the secretary of state, the chairmen of the Riigikogu committee and the chairmen of the parliament factions. According to the calculations of Postimees, they will receive 870 euros in addition to their current salary from the beginning of April, i.e. they will earn 7,077.91 euros per month.

Minister of Economy and Infrastructure Riina Sikkut said that she does not work for money, and she does not believe that for any other minister either. She admitted that the salary is high compared to that of the average Estonian worker, and that it does seem unfair in the difficult time when people are having a hard time paying their bills.

Index matters much

According to Sikkut, the question now is not about the amount, but about the mechanism for the forming of salaries of high-ranking civil servants. It should be discussed whether the development of salaries should be automatic as it is now or based on individual political decisions. “I would generally consider the automatic mode more reasonable, but then the question is what the index is,” said Sikkut. "Given the current inflation, the index is high and the salary increase therefore seems unfair to many."

Jaanus Karilaid, chairman of the Riigikogu Center Party faction, said that the law indexing the salaries of high-ranking civil servants really does not match people's sense of fairness in the current situation. At the same time, according to him, indexation should not be abolished, but should be used in the society at large – for the salaries of social welfare workers, child protection specialists, teachers, coaches, lifeguards and other public servants. According to Karilaid, this reform would cost 400-500 million euros. “On top of that, the current rulers say that they do not have the money, but then we should think about changing the tax system,” he mentioned.

The third place in the salary increase ranking belongs to the deputy chairmen of Riigikogu committees, deputy chairmen of party factions and district court judges; their predicted salary increase is 768 euros. The rest of the positions and their predicted salary increases can be viewed in the table.

The latest amendment to the law related to the salary of high-ranking civil servants was debated in the Riigikogu in 2017. Eiki Nestor, who was the chairman of the Riigikogu at the time, said that he was never a fan of the indexed salary of politicians. Salaries were also indexed before 2017, but the purpose of the change at that time was to equal the indexes for old-age pensioners and senior civil servants. “The previous index would have raised the salaries even more than the current one; the share of inflation rate was even higher there,” Nestor said.

Set for four years

Moreover, when discussing the matter at the time, no one had any idea that indexation could make the salary increase so large. “Nobody could have guessed that Russia would attack Ukraine, that there would be an energy crisis and, in connection with it, insane inflation,” Nestor remarked. He pointed out that according to the constitution, the Riigikogu can make decisions regarding their salary only for the next Riigikogu. Currently, it may happen that if the index is negative in some fiscal years, old-age pensions will remain at the same level, while the salaries of senior civil servants will decrease.

Nestor dismissed the idea proposed by Karilaid that the indexing policy could be expanded. He explained that in this case, public sector civil servants may have the impression that indexation will increase their pay, but in fact it may actually decrease in some years. “This is shameless populism,” Nestor said and added that it would be better, more realistic and meaningful if public sector salaries were agreed upon between those who receive them and those who pay them.

"Ideally, people applying for positions for four years should know what their salary terms are," said Nestor. "The salary of Riigikogu members could be adjusted once every four years, and the salary could be proposed by experts recognized by the public and trade unions: the Employers Confederation, the Trade Unions Confederation and other associations representing social groups. The Social Democrats have been making such a proposal for twenty years, but no one has supported it.”

According to Nestor, the current high index should not scare everyone, because all years are not the same. He did not want to answer the question whether the Riigikogu should now abolish indexing for the next composition. “I am not going to say anything because I am not part of that team,” he said.