Carthago delenda est – yep, it’s the public sector again… June 12, 2012Posted by WorldbyStorm in Economy, Irish Politics.
Here’s a weird one. I was reading Stephen Collins Saturday column early on Saturday morning online, and I’m sure that there were one or two comments underneath it. And then later that morning when I go back – no comments. I could be wrong, but…
Anyhow the reason I remember the comments is that one made a blindingly obvious point in relation to Collins argument, an argument which can be encapsulated by the heading ‘Coalition faces stark choice on cuts to pay or services’.
He argues that the referendum result means that:
It is now time for the Coalition to show solidarity with the people and make fairness the cornerstone of tough decisions still to be made to restore the Republic to economic health.
One of the themes encountered by Fine Gael and Labour canvassers on the doorsteps during the referendum campaign was outrage at the fat salaries paid to Government advisers and the huge lump sums and pensions paid out to retiring high-profile public servants.
There is a feeling across the community that the pain of the economic crash has not been shared equally. The Coalition will need to do something about it very soon if it wants to survive a full term.
And that in turn suggests it’s hit the public sector time. Collins isn’t shy. He goes on, with no supporting data other than the anecdotal, to assert:
When the late Brian Lenihan, as minister for finance, was persuaded to exempt about 150 assistant departmental secretaries from a pay reduction two years ago, he found to his astonishment that – because of pay relativities across the public service – almost 500 people qualified for the exemption.
More recently, private sector PAYE workers looked on in wonder at the packages paid to departing public servants who decided to take early retirement and avail of pensions and lump sums based on the salaries they were paid before the crash.
So far the Government has resolutely avoided tampering with public service pay, arguing that its hands are tied by the Croke Park agreement, which was negotiated by its predecessor. Given the scorn it expresses for most of the things done by the previous government, the attachment to Croke Park is only explicable as lack of courage.
And so on. And as always it’s not the financial sector element of the crisis that he draws attention to. Which some of us may find odd given the week that is in it and that the Spanish ‘bailout’ looms large in the general consciousness and in no small part because it seems so strikingly different to the one imposed on the ROI.
After more than a year in office the Coalition still commands a fair degree of public respect, as the referendum outcome proved. But it runs the danger of squandering that goodwill if it is not seen to act fairly while it continues the task of reducing public expenditure.
Gesture politics – like calling publicly on German chancellor Angela Merkel to modify the bank bailout terms – is the easy bit and, despite the publicity it generates, may in fact prove to be counterproductive.
The hard part is focusing on the fact that three-quarters of the problem facing the country has been created at home by the huge gap between what the Government spends on services and the income it raises from taxation.
Some might quibble with his figure of ‘three quarters’ of the problem. A supporting piece of evidence would be no harm.
But what is his solution, should such a problem exist?
That problem will be at the heart of the estimates process in the autumn. Big issues will come up for considerable discussion as the budget decisions are made.
But in the end it is likely to boil down to the choice of paring back further on services for the genuinely needy or tackling the scale of the public service pay and pensions bill.
There are no easy options left.
Odd that. As that on again, off again commentor noted under the article, not one mention of an option – easy or otherwise, and one suspects that in his book it would be the latter, that would directly impact on situation, that is increased taxation at higher rates and fully thought through wealth taxes.
Would that make up all the difference? Perhaps, perhaps not, but it would go quite some way to a genuine ‘sharing’ of pain. That he doesn’t propose any such thing, that he instead can only see this in relation to pay or services, unsurprisingly demonstrates precisely where he is coming from.