KTTO: Lasting Prosperity Requires Lower Living Costs

In a written statement, the KTTO said that in an environment of high inflation and rising living costs, salary and wage increases that fail to address the root causes of the problem cannot deliver sustainable prosperity.

The statement said higher wages increase business costs, which are then passed on to consumers through higher prices, ultimately eroding workers' purchasing power once again.

"It is time to move beyond populist policies and implement bold structural reforms that will reduce the cost of living, boost production and restore our country's competitiveness," the chamber said.

The KTTO argued that the solution lies not only in increasing the minimum wage, but also in reducing the cost of living, restoring fiscal discipline, supporting production and making the economy competitive again.

The statement noted that the growing gap in labour costs between the TRNC and neighbouring economies has weakened competitiveness across many sectors, warning that an economy unable to compete cannot attract investment, create jobs or sustain long-term wage increases.

It also stressed the need for the country to break out of the "wage-price spiral" and pursue structural reforms.

Calling on the government to improve efficiency in public spending, strengthen budget discipline and ensure that "the cost of problems in public finances is not shifted onto citizens and the private sector through new taxes, fees and financial burdens," the chamber added:

"If society is expected to make sacrifices, the state must lead by example. Senior public sector salaries, MPs' allowances, overseas representation costs and all public expenditure should be reviewed with a clear focus on savings.

"At the same time, e-government initiatives should be completed without delay to improve efficiency in the public sector, reduce bureaucracy, strengthen the fight against the informal economy and review the tax burden on essential consumer goods."

The KTTO stressed that its position is not opposition to wage increases, but rather that an economy which does not produce, cannot compete and survives through constant borrowing cannot provide lasting prosperity for workers, encourage employers to invest or offer young people hope for the future.