Country Situation (2011 estimates) Response: recent activity Public wages and staffing

Gross public debt (% of GDP)

Public deficit (% of GDP)

Greece 139% 9.5% June – Revised 5-year plan cuts €14.32bn of public spending, while raising €14.09bn in taxes to secure another payment under the €110bn bail-out from the EU and the IMF

July – Further €109bn bailout with reduced interest rates

• Public sector wage bill cut by €770m in 2011, €600m in 2012, €448m in 2013, €300m in 2014 and €71m in 2015• Nominal public sector wages cut by 15%• Wages of employees of state-owned enterprises cut by 30% with a cap on wages and bonuses• All temporary contracts for public sector workers will be terminated• Only one in 10 civil servants retiring this year will be replaced and only one in 5 in coming years• Expected reduction of 220,000 civil servants (2010-14) from high of almost 800,000• Increase in weekly working hours for public sector employees from 37.5 to 40 hours, equivalent to a pay cut of 6.25%• Cuts in pension entitlements and rise in retirement age from 55 (to 65 by 2015)• Extend freeze on mandatory public pensions• Introduction of unemployment insurance contributions for public-sector employees

Ireland 102% 10.8% July – Government commitment to no further pay cuts for public servants conditional on “the ongoing delivery of flexibilities" including co-operation in reducing staff numbers, cost-containment and changes to work practices so that services for the public would be maintained. Ongoing moratorium on promotion and recruitment

August – Government planning a pre-Budget assessment in October to reveal plans to increase taxes and cut spending. Planning cuts of €3.6bn for the 2012 year

• Reduction of 24,750 public sector jobs by 2014• €1bn of savings through pay cuts ranging from 5% on those earning €30,000 to 15% on those earning more than

€200,000• Salary cap of €200,000 for public servants• Increase in the retirement age

Portugal 87% 9.1% May – EU and IMF agree €78bn bailout if deficit is cut to 5.9% of GDP this year

June – Newly elected Government claims it will be more ambitious in reducing the deficit than the terms of the bailout

• Recruitment freeze of civil servants (no replacements)• Freeze on public sector wages• 5% cut in public sector wages• Freezing of pensions that are over €1,500 per month• Reduction in employers’ social security contributions• Cuts to redundancy payment entitlements from 30 days to 20 days and a ceiling of 12 years• A one-off tax, taking 50% of workers’ Christmas bonus• Abolished regional governments

Italy 120% 4.3% July – 4 year austerity budget designed to eliminate the budget deficit by 2014. Government plans to double its original savings target of €40bn to €79bn

• Cuts to state pensions worth €600m in 2012, €1.1bn in 2013 and €1.1bn in 2014• Cuts to the budgets of central government ministries, worth a total of €1bn in 2012, €2.5bn in 2013 and €1.5bn in

2014• Elimination of 265,000 public service jobs being considered along with salaries of remaining employees frozen for 4

years• Retirement age to be gradually increased to 67 years of age• Savings of up to €50bn to be made through cuts in state pensions

Public Sector Consolidation: International Comparisons

Sources: IMG 2011 debt and deficit estimates; OECD reports; government websites; news reports – accessed July and August 2011

This table provides an update on public sector reform driven by the constrained fiscal environment in a range of international jurisdictions. All of the information is drawn from public domain sources.

Country Situation (2011 estimates) Response: recent consolidation activity Public wages and staffing

Gross public debt (% of GDP)

Public deficit (% of GDP)

United Kingdom

82% 11.1% July – Government announces rise in pension contributions of up to 2.4% and raising pension ages in line with planned increases in the state pension age. Ongoing work on the proposed shift from final-salary to career-average pensions

August – Government reveals savings of £3.75bn in the ten months from May 2010 to March 2011

• Reduction of 490,000 public sector jobs by 2014-15• Two year wage freeze• Average 34% reduction in administrative costs for departments by 2014-15• Increased employee pension contributions to save £2.8bn by 2014-15

• £300m cut in civil service salaries bill through a reduction of staffing equivalent to 17,000 places• £870m saved by cutting departmental spending on consulting• £500m saved by reducing spend on temporary agency staff• £400m cut in government advertising and communication• £800m from renegotiating deals with large government suppliers• £90m through better controls of property lease renewals

Spain 70% 6.6% April – The Prime Minister ruled out further austerity measures

August – new social security law enacted

• 5% wage cut in 2010; frozen in 2011• 10% replacement of vacant positions 2011-2013• 16% cut to departmental budgets• Increases to the retirement age, the number of years of contributions required for a pension and incentives for

workers to remain in the labour force past retirement age

France 88% 5.7 % May – Froze public spending between 2011 and 2013 to bring deficit within the 3% required by the EU

• Cut 97,000 public sector jobs by 2013 by only replacing 1 out of 2 retiring state employees• Public sector wage freeze in 2011• Departmental budget cuts of 10% over 3 years

Canada 80% 4.7% June – New majority Government seeks C$4bn annual savings to return to surplus in 2014-15

• Departments instructed to draw up scenarios for budget cuts of 5 and 10%, with options that could include merging operations across departments, making programmes more efficient and introducing user fees for some services

• If achieved solely through reduction in public services this would equate to about 40,000 positions from a federal public service of 285,000

Singapore 95% 20.4% SURPLUS

• Block budget 3-5 year caps with budget growth factor of 40% of the smoothed GDP growth rate• Manpower management framework creates penalties for headcount growth faster than the smoothened resident

labour force growth

Sources: IMG 2011 debt and deficit estimates; OECD reports; government websites; news reports – accessed July and August 2011