Fat-cat civil servants' incomes disclosed

Apr 12, 2001
Kairi Kurm

Figures disclosed show that the heads of state-owned enterprises receive four times more than government ministers and chancellors and 20 times more than the average Estonian.

Incomes made known throughout last week formed an increasingly familiar pattern. The director of a state-owned enterprise receives 100,000 kroons ($5,700) a month, while ministers and chancellors receive 25,000 kroons each.

A typical employee at an Estonian ministry or public institution gets an average of 5,000 kroons. The average wage in Estonia is 5,280 kroons, and the average pension is just 1,200 kroons.

The highest paid Estonian civil servant is Gunnar Okk, chairman of the state-owned utility Eesti Energia, who earns 115,600 kroons a month.

The highest monthly pay registered last year was for Toomas Somera, the former chairman of the board at Eesti Telekom, who received a mammoth 191,000 kroons before leaving his job last September. However, half of this was severance pay.

Daniel Vaarik, acting adviser to the minister of finance, told The Baltic Times that the idea of disclosing salaries began four or five years ago, but that the regulation itself was signed by Minister of Finance Siim Kallas last June. The regulation, entitled "Circumstances for disclosing wages," was included into paragraph 8 in the wage law.

"We believe that the regulation has more advantages than disadvantages. It is useful for the state but inconvenient for civil servants," said Vaarik. "We believe that it will normalize payment policies and help prevent suspicion and corruption. It will help to solve problems that were previously covered up."

Vaarik said that the state was aware of the salaries of the management of the state-owned enterprises, but that it was always difficult to find information about premiums, which sometimes form a large share of the total sums of income.

He acknowledged that some incomes seemed surprisingly high.

Kallas said at a news conference that the wages of the directors of state-owned companies had to be competitive, especially those of directors with a lot of responsibility who lead companies with large turnovers.

Kallas, who earns 24,000 kroons a month, has admitted that some of the bosses' wages make him envious.

The Ministry of Finance is of the opinion that civil servants should receive one single transparent salary, which should include all possible premiums, benefits and compensations.

The minister is planning to make further amendments to the regulations. The system of compensations has to be improved, said Vaarik, because there have been cases where managers who have been dismissed return to the company after getting a hefty payoff.

The governor of Saare county, for example, refused to pay back severance pay totaling six months' income when he returned to his post, claiming that he had earned it legally.

"But we thought this was unethical," said Vaarik.

Vahur Kraft, the president of the bank of Estonia, kept his 1 million kroon payoff even though he returned to his post just a couple of weeks after he resigned. His total income for last year came to 1.36 million kroons.

Vaarik believed that some people may form a worse opinion of civil servants because of the sheer size of the premiums and benefits disclosed. But he also thought that the disclosures would raise interest in working in the public sector.

After the salaries were disclosed on the Internet there were complaints in the Ministry of Finance from employees who felt that their salaries had been misjudged. He believes that most institutions face this problem.

Sigrid Tappo, spokesman for the Ministry of Social Affairs, said that she had not heard any complaints within the ministry. Employees have had enough time to acclimatize themselves to the idea that civil servants' salaries were not confidential, she said.

Aap Tanav, spokesman for the Ministry of Roads and Communications, said that the salaries of his management as well as those of state-owned enterprises did not surprise him at all.

"They have responsible positions," said Tanav. "I believe that the wage policies of state-owned enterprises are in accordance with the private sector."

The highest earnings in all the ministries are to be found in the Ministry of Roads and Communications, where the average salary is 8,700 kroons. Tanav argued that salaries in the communications sector were high in general. If pay at the ministry were any lower, it would be hard to find good personnel.

The amendments to the wage law have made Estonia one of the few countries in the world that discloses civil servants' salaries, said Vaarik. Similar openness was recently instituted in Hungary. "We can make the state more transparent by opening up our financial environment," said Vaarik. "It improves the competitiveness of our country before our neighbors. We are planning to disclose everything possible in order to create a more transparent society."

SOCIAL BOOKMARKS:   Delicious   Digg   Reddit   Ask   Facebook   MrWong   Netvouz