Thursday, 6 December 2012

The Real Cost of Government

In an age where European states are struggling to grapple with the severity of their debt levels, reforms which should be made as a part of a larger means of debt reduction have not taken place. Ineffectiveness and cronyism dominate government ministries, and institutions where public funds which should be used for capital investments or debt repayments are instead used to pay many inefficient workers, parliamentary subsidies, and various perks.

It is common knowledge that this is the case in Greece (you only need to watch CNBC most weekday mornings to see this), but this problem also exists at a similar level in Europe’s third largest economy – Italy. Over the past year Eurostat (the official statistical agency of the European Union), Der Spiegel (German weekly news magazine) and Vision (independent Italian think-tank) have been accumulating data and published comparisons on the amount of money needed to run the Parlamento Italiano (Italian Parliament) – primarily the lower house, the 20 Regional Parliaments, and other Parliaments throughout Europe.

The Italian Camera dei Deputati (Chamber of Deputies - lower house of parliament) costs €1.66 billion annually to function. This is an astonishing amount when compared to running costs of the lower houses of parliament in France, the UK, Germany and Spain. When combined, the running costs of the French AssemblĂ©e National, British House of Commons, German Bundestag and Spanish Congreso de los Diputados do not equal the €1.66 billion spent by the Italian taxpayer on the Camera. When broken down into per capita figures, Italians are paying €27.15 for their lower house to function, compared with €8.33 in Germany, €8.11 in France, €7.71 in the UK, and €2.14 in Spain.

Of the €1.66 billion spent on the lower house, only a meagre 15% is spent on Deputies. Almost a quarter is spent on personal staff, and more than 18% of the annual budget is allocated to pay parliamentary pensions. Other parliamentary perks include a free barber for Senators and heavily discounted food (beef carpaccio with lemon sauce for only €2.76 – less than the price of a coffee down the street). Public cynicism has also come about after discovering that parliamentarians receive €3,700 a month for the purposes of maintaining relations between themselves and their constituency. Parliamentary staff also benefit from high wages and expense accounts which leads to the practise of employing family or friends with negligible real work being done as there is no incentive for these staff to work. In what can only be a prime example of the exorbitant waste of taxpayer money on inefficient government is not the €230,000 annual wage paid to the Italian Head of State – the President, but rather €270,000 annual wage that a senior short hand writer in parliament receives. That’s 17% more than the President of the Republic!

Finally, as if the amount of money spent in Rome on the Camera alone was not enough, Italians also have to pay for Regional governments and parliaments to function. This requires the payment of money to more officials, assistants and consultants in the regional capitals. For example, residents of Lombardy, Apulia, Latium (Lazio), and Sicily (for of the 20 Regions of Italy) are paying €8.70, €15.40, €18.50 and €35.10 respectively as well as the €27.15 for the Roman government.

With much of these funds being wasted supporting unrealistic undertakings, it may be time that the Italians in power looked at implementing austerity a little closer to home before hurting its own people and crying to Brussels.


  1. Certainly a sad state of affairs in Italy. I don't imagine the rest of the EU is much better in this regard. These practices are a good indication of where a country's first savings measures should be taken!
    Have you seen any comparative figures of parliamentary costs per person from any non-EU countries? Would be interesting to compare with say the US or Australia.

  2. As director of the police force.. Manganelli makes 621,253.75 euros ($818,539) a year - more than four times what U.S. Federal Bureau of Investigation Director Robert Mueller earns.... poor italians!!!!

    1. Whilst I agree with your statement which points out a very interesting comparison between the salaries being earned by FBI Director Muller and the Head of the Polizia di Stato Antonio Manganelli, there are a couple of things I would just be mindful of.

      Comparing the Polizia di Stato and FBI is not necessarily comparing apples to apples. The Polizia di Stato does not have an equivalent in the US. A more comparable North American force would probably be the Royal Canadian Mounted Police north of the border. Also, the perception of working for the government in Europe (including the UK and countries such as Australia and New Zealand) and the US are quite different. Working for the government in Europe is thought of as a profession whilst in the US is thought of as a form of a civic participation not a career. People with the same skill sets and educational backgrounds can earn much more working in the American private sector.

      Something I think that we can agree on though is that people in positions such as Muller’s and Manganelli’s deserve to be paid a reasonable salary provided two major factors are met. These are simply that there is enough money to pay them, and that they themselves provide some form of benefit to the role – i.e. bring about a reduction in criminal activity.

      I personally believe that although Italy is going through a period of economic turbulence, there is a need to entice the best people to apply for the job and there therefore needs to be an appropriate salary offered. Even though there are spending cuts being made, if you can bring in people that can tackle the criminal problems then maybe the salary should be thought of as an investment rather than simply a cost? The question the Italian government must ask themselves though is Manganelli worth the money. That, I think not.