Unprecedented 80% of Government budget goes on salarys

[laptawrinkly]

https://www.kibrispostasi.com/c50-EKONO ... e-80-artti

Publication Date: 17/09/25 10:20

Okandan: Salary-qualified transfer expenses increased by 80 percent from January 2024 to August 2025!
Former Undersecretary of the Ministry of Energy and Economy, Erkan Okandan, stated that the 80% increase in salary-based transfers is unprecedented globally. He also emphasized that public finances are failing to combat inflation, adding that borrowing will drag on until 2026 and that the balanced budget narrative is unrealistic.

Former Undersecretary of the Ministry of Energy and Economy, Erkan Okandan, was a guest on the "Morning News" program hosted by Canan Onurer on Kıbrıs Postası TV.

Okandan began the program by assessing the Ministry of Finance's planned borrowing of 2 billion Turkish Lira, 25 million dollars, 15 million euros, and 15 million pounds in Turkish Lira and foreign currency. He noted that the Ministry had received repayments for previous borrowings as of September 19th, and therefore, the borrowing will continue.

"With a historic budget deficit that will not be announced in 2025 and borrowings extending into 2026, the 'balanced budget' rhetoric is unrealistic."

Okandan stated that the repayment of the borrowing will be postponed until January 9, 2026, and emphasized that 5-6 billion TL worth of debt will be paid in November 2025 alone.

Okandan said that it is impossible for a structure with a monthly income of 6-7 billion TL not to borrow, adding, “With the historic budget deficit to be announced in 2025 and borrowings extending to 2026, the Finance Minister’s statement that ‘we will reach a balanced budget’ is unrealistic.”

"ONLY 20 PERCENT OF INCOME IS COLLECTED AS TAXES, AND BY CHANCE, THESE TAXES ARE NOT FAIR"

Okandan also touched on tax collection capacity, stating that taxes were collected in 2023 at 20.48 percent of Gross Domestic Product (GDP), a figure that is quite low. Pointing out that the average in the European Union is 40 percent, Okandan noted that taxes collected are not distributed fairly.

Okandan stated that the corporate tax, which is a direct tax, is calculated based on the turnover of the previous year and paid in two installments in 2025, but that despite this, corporate tax revenues are approximately 400 million TL lower in real terms than the Price Stabilization Fund (PSF), which is an indirect tax.

Okandan stated that real and legal persons fulfill their FIF obligations, both corporate tax and indirect tax, and noted that there are serious problems in the internal distribution of corporate tax, emphasizing that approximately half of the tax is paid by banks.

Okandan pointed out that inadequacies in revenue collection, as well as chronic salary-like transfers and undisciplined spending, increased the budget deficit, and stated that this structure did not create a sustainable balance in public finances.

"FROM JANUARY 2024 TO AUGUST 2025, SALARY QUALIFIED TRANSFER EXPENDITURES INCREASED BY 80 PERCENT"

Okandan, noting that salary-related transfer spending increased by 80 percent from January 2024 to August 2025, said, "Such an increase is unheard of anywhere else in the world. One of the biggest reasons for this is the currency used. Public finances are unable to combat this inflation."

Okandan said that this spiral has been going on for a long time and that expenditures may increase above inflation in the coming years.

"THERE IS AN 80 PERCENT UNREGISTERED ECONOMY IN THE COUNTRY; THE TRNC IS THE 9TH MOST Wretched COUNTRY IN THE WORLD ON THE POVERTY INDEX"

Okandan also touched upon Steve Hanke's misery index.

Okandan stated that when Veriker indexes the TRNC, it is ranked as the 9th most miserable country in the world, noting that there is an 80% informal economy in the country, which was also stated by the Turkish Cypriot Chamber of Commerce (KTTO), adding, “When looked at objectively in the light of the data, the country’s finances are in a bad state.”

"AS LONG AS THE TL IS USED, ACHIEVEMENT OF BUDGET BALANCE IS VERY DIFFICULT; STEPS MUST BE TAKEN IN THIS CONTEXT"

Finally, Okandan evaluated potential solutions during the program, stating that budget balance cannot be achieved as long as the Turkish Lira is used. In this context, he stated that measures must be taken regarding the use of the Turkish Lira. He also emphasized the need for steps to increase revenue, noting that the country is an import-heavy economy.

[frugal90]

AI efficiency savings maybe???

[EnjoyingTheSun]

It’s not uncommon to have a bloated public payroll. Japan was renowned for how efficient their industry was in the 70s but had very inefficient public services. They literally did have people counting lampposts.
I guess they assume that if the government doesn’t hire them then they will have no job & the government will have to pay them welfare instead.
But they need the private sector working well to pay the taxes to support this

That said there is no reason to overpay for the jobs you don’t really need.
The government should also be extremely efficient given they can throw people at a problem.
Also they have the manpower in general so if tax isn’t being collected then allocate more people to that task

[MnM]

Send Jim Hacker in

[benjaminbutton]

I watched that particular episode last week, so funny but so accurate, particularly HERE and the British Civil Service.

[EnjoyingTheSun]

It’s been a while since I went into one of the government offices. Is it still the same system, one person serving and 8 watching them?

[snd1966]

It’s been a while since I went into one of the government offices. Is it still the same system, one person serving and 8 watching them?

Recently I have noticed more ladies are working in the offices and efficiently too. Unfortunately the system is still very time consuming with everything being checked and signed off by other departments. Even when paying there is generally a vezme department therefore create the paperwork and go to another to pay especially when it's to do with tax or living here legally.
I personally would hate a job in some government offices as staff are verbally abused especially when they are not saying what you want to hear.
Remember everyone manners maketh man and a smile costs nothing

[EnjoyingTheSun]

Unfortunately the system is still very time consuming with everything being checked and signed off by other departments.

I miss collecting the blood tests from the hospital and one guy putting them in an envelope & passing it to the other guy to seal up. I always wondered if one was more senior than the other

[snd1966]

[/quote]

I miss collecting the blood tests from the hospital and one guy putting them in an envelope & passing it to the other guy to seal up. I always wondered if one was more senior than the other
[/quote]

Oh those were the days, I remember paying bills, 1 created the receipts, 1 checked the amount and finally another stapled the bill and the receipt togethe.
Then the numbering system came in, a certain department suggested I took a number for each bill to share the workload. In those days cash, took longer as I raced along the counter, everyone tutting behind me. Thank goodness it didn't last but I did notice a lot tried to look busy while they were guessing what number I held.

[waddo]

Now we are in the digital age officially, will it all change from the old manual digital method of 1 passing it onto 0, then it sitting there till another number 1 picks it up and passes it onto another 0?

[benjaminbutton]

Two years ago we went to the very swish offices in Lefkosa where you have to register phone purchased outside of the TRNC,

Huge car park, 6 cars on it.

Man sat on a chair outside and pointed to the glass entrance doors (they were the only doors you could use)
I turned to right and there were three people doing absolutely nothing,

1st lady handed me a short questionnaire (in English she said........ it wasn't) so gave me another one which I completed.
Then came from behind her chair and WALKED ME ABOUT 10 ft and handed my form to a second lady sitting in glassed off room
The woman looked at the number at top of form and typed it on her computer and spent 15 minutes trying to find the new phone on her PC to find out tax needed to pay. Eventually she handed me a A4 sheet of handwritten scribble and asked me to find the phone type. So I handed Amazon page to her showing price. There was a sale on at the time I bought it, but didn't tell her.

Second lady escorted me to another glass office (a further 10 ft or ) to a man who looked at the number and signed across it. He asked me for a stamp (which I purchased the day before) and with a flourish stuck it on the form and signed across it.

He then indicated to I go to the first lady who photocopied the form and Passport

In all that time, we were the only Customers.

[EnjoyingTheSun]

Second lady escorted me to another glass office (a further 10 ft or ) to a man who looked at the number and signed across it. He asked me for a stamp (which I purchased the day before) and with a flourish stuck it on the form and signed across it.

You were lucky that the top man was there!
Its lends itself to two questions;
1. How on earth was/is there any unemployment?
2. Why can’t they use the creativity and imagination it takes into turning a one person job into a six person job into something useful?

I remember doing some consultancy and they were carrying out a task on a table and then walked it 100 yards past 10 identical tables to the desk where it needed checking.
I pointed out it took them a minute to walk it to the desk & a minute to walk back to the table to then do the task again. This task had to be repeated 40 times so why not use the table that was identical and only a 10 second walk away from the desk and so save 100 seconds walking time for the 40 times they had to do it and save over an hour they didn’t need to waste.
They looked at me as if I was insane and pointed out that they always did it at that table

[Kanonier]

Old dog, new tricks?