Photo by Jasmin Bauomy
Facing a group of students from the
But, over the next hour,
Ghali admitted that it was the middle class that was largely paying the bill for a recent pay raise for government employees. Government salaries went up by 30% after the bread strike in April 2008. The strike and riots were triggered mainly by soaring prices and severe shortages of subsidized bread.
Ghali said the wage increase would push up the fiscal budget deficit. So, he said he had to raise prices for many basic commodities and energy products such as gasoline. He defended this decision by noting that without the necessary resources to finance this wage increase, inflation would have been 3 times the cost of the raise. Ghali said he thinks that the increase in gasoline prices will mainly affect middle class car owners rather than low income earners.
Responding to a question about taxation, Ghali defended his policy. “If we start with the logic that we cannot tax the poor because they are poor, the middle class we cannot tax because they are nice, and the higher income we cannot tax because we cannot reach them, then… we do not have any money.”