Mikheil Saakashvili: “Bureaucracy salaries – mayors, chairs of municipality councils, etc. – have increased by GEL 194 million.”

Verdict: Mikheil Saakashvili’s statement is MOSTLY TRUE.

Resume: In 2021, GEL 1,640,876,100 was envisioned for labour remuneration. This year, the labour remuneration budget line (GEL 1,834,414,100) has indeed increased by GEL 194 million. As mentioned earlier, GEL 117 million of this amount is intended for a 10% increase in the basic salary of public servants. The growth of the salaries of public servants does not imply a growth of bureaucracy salaries alone, since the salaries of service members, policemen, teachers, etc., will also increase. Therefore, it is wrong to emphasise that only bureaucracy’s salaries will increase.

At the same time, since 1 January 2022, salaries of Mayors, chairs of municipality councils and staff members increased in most of municipalities. Therefore, highlighting the growth of bureaucratic expenses is warranted. Therefore, Mikheil Saakashvili’s statement is MOSTLY TRUE.

Analysis

In his speech before the court, the third President of Georgia also touched upon the issue of salaries and stated: “Bureaucracy salaries – mayors, chairs of municipality councils, etc. – have increased by GEL 194 million.”

In accordance with the decision of the Government of Georgia, people employed in the public service had their salaries increased by 10% from 1 January 2022 with GEL 117 million to be spent from the state budget for this purpose. Everyone employed in the public service, including the army, police, schools, etc., will have their salaries increased.

According to the Law of Georgia on Remuneration in Public Institutions, the basic official salary is determined annually by the state budget. The basic official salary is multiplied by the respective coefficient specified in the same law to produce an official salary for a particular post/position. Of note is that the basic official salary was set at GEL 1,000 in 2017 and has not been changed since. After the second submission of the draft 2022 budget, the basic official salary for public servants increased and will be GEL 1,100 instead of GEL 1,000.

According to the first submission of the draft budget, a total of GEL 1,653,356,800 was envisioned for labour remuneration and the number of public servants was 112,712. In the second submission of the draft budget, the amount of funds intended for labour remuneration was already GEL 1,830,014,800 which was attributable to the aforementioned decision. However, of note is the fact that the number of employees in the new draft increased by 40 and is now 112,752.

In 2021, GEL 1,640,876,100 was envisioned for labour remuneration. This year, the labour remuneration budget line (GEL 1,834,414,100) has indeed increased by GEL 194 million. As mentioned earlier, GEL 117 million of this amount is intended for a 10% increase in the basic salary of public servants. The growth of the salaries of public servants does not imply a growth of bureaucracy salaries alone, since the salaries of public service members, policemen, teachers, etc., will also increase. Therefore, it is wrong to emphasise that only bureaucracy salaries will increase.

In regard to the growth of the salaries of mayors and chairs of municipality councils, Prime Minister Irakli Gharibashvili announced in December 2021 that the growth of salaries for public servants would be a trend in 2022.

Since 1 January 2022, the salaries of mayors, chairs and deputy chairs of municipality councils and staff members increased in most municipalities. Salaries increased in the Shuakhevi, Khelvachauri, Gori, Telavi, Sighnaghi, Gurjaani, Zugdidi and Rustavi municipalities and elsewhere.

Of note is that as a result of inflation, money’s purchasing power decreases in time and less goods and services can be purchased with GEL 1 than previously. Income/salary and such figures are divided into two categories – nominal and real. The nominal salary shows the amount of money whilst the real salary is inflation-adjusted and reflects purchasing power at the given moment.

The annual inflation rate for 2021 is 13.9%. Therefore, the already increased GEL 1,100 nominal salary in 2022 will in fact be equal to GEL 965.8 even as compared to the beginning of 2021 which means that a public servant could afford more products with GEL 1,000 at the beginning of 2021 as compared to what he can buy in 2022 with GEL 1,100.

Therefore, a 10% growth of salaries in the public sector in 2022 will lead to a salary growth in nominal figures and the basic salary will become GEL 1,100 instead of GEL 1,000. However, real salaries will decrease by 3.5% given the annual inflation. To put is simply, the increased basic salary of a public servant will have 3.5% less purchasing power in 2022 as compared to 2021.

To summarise, salary appropriations for 2022 indeed increased by GEL 194 million as compared to the previous year which is largely stipulated by a 10% growth in the basic salaries of public servants. However, this growth does not envision a salary growth only for the bureaucratic apparatus since all public servants employed in any field will have their salaries increased.

Of additional note, however, is that the salaries for mayors, chairs and deputy chairs of municipality councils and staff members increased across the municipalities in accordance with the decision of the Government of Georgia. Therefore, Mikheil Saakashvili’s statement is MOSTLY TRUE.