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What is a recovery if it’s not a recovery? November 9, 2016

Posted by WorldbyStorm in Uncategorized.
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The point was made at the weekend that the rhetoric of recovery used by Fine Gael and Labour at the last election has run right into the political ground of rising calls for public sector wage increases. And the problem for this current government is that after years of significant changes for the worse in terms of pay and conditions for public sector workers if there is any substance to that rhetoric of recovery then, logically, wages have to be reconsidered.

Which makes Stephen Collins piece at the weekend somewhat curious for he writes:

The Government was stunned by the late-night recommendation from the Labour Court that averted a dangerous strike by gardaí yesterday but at an unexpectedly high price. Ministers are now in a serious bind. Rejection of a Labour Court settlement would be unprecedented, but acceptance of it threatens a fundamental plank of its budgetary policy.
The viability of the minority Government has been put in question by the terms of a deal that go way beyond what it was expecting. It has the potential to lead to industrial chaos in the public service, and could even precipitate an early general election.

And this is bad, apparently, because while:

The Cabinet will have to reflect on the settlement terms early next week, but there is no disguising that if it accepts the recommendation it will lead to a more rapid increase in public sector pay than had been planned for in the budget.
That means that some of the spending earmarked for improved public services, increased welfare payments and overdue investment in infrastructure in the years ahead will suffer, with damaging long-term consequences.

Here I think, though, we see something else. A new reality where recovery is indeed rhetorical, where the state continues to lower taxation – despite the need to shore up revenues for expenditure, and where the gap between those two creates massive political pressure on the government. But this is, of course, the fault of the government. It is hoist, yet again, on its own policies, ones where tax cuts – however cosmetic, are always trumpeted as being of the utmost importance whatever about the requirements of increasing expenditures.

And one could reasonably ask Collins why he thinks it is beyond the government to address all the issues above as well as improve wages (and conditions – let’s not forget the virtual bonfire of those in the last decade, a bonfire that arguably may impinge long after wages have been restored).

The answer isn’t difficult to work out. For Collins the current status quo is the way things should be. And what of this for a remarkable rewrite of recent financial history:

It is too easy to blame the whole thing on the fact that the Government does not have a majority in the Dáil. It is worth remembering that the source of Ireland’s recent financial woes, and its current industrial relations problems, lie in the public service benchmarking process of more than a decade ago.

Nothing there about too massive decreases in personal taxation, or the whittling of the tax base, or the over-reliance on one area to sustain public spending, or… need I go on? Nope, for Collins it is the public sector that is the alpha and omega of all our financial ‘woes’.

Yet for him this is ‘reality’. He writes that all this could see the government turfed out of office with ‘an even more indecisive result’. But…

…it might force voters to think about the options facing the country and generate a realistic political debate about such options.

Good luck with that. Hard to believe that FF in government with various others would not face precisely the same issues. And likely try to square matters in much the same way.

Though Collins argues:

Some Fine Gael TDs are becoming increasingly apprehensive that their views are being overwhelmed by pressure from Fianna Fáil – it has the luxury of influencing the Government from the Opposition – as well as the smaller parties and groups in the Dáil who are incessant in their demands for extra spending.
The fear of these Fine Gael TDs is that voters who elected them in the expectation of prudent economic management will become disillusioned if further concessions are made to public sector unions, leaving them with no platform to campaign on during the next election.

But another hint of a silver lining for Collins for:

If the Government collapses in the face of a union revolt it will probably mark the end of “new politics”. There will be real pressure on the big parties to come together and form a stable majority government next time around.

But what does he expect will ensue? For exactly the same will occur. Now, naturally, he thinks that such a government would be able to impose its will in a different way to the current one. I’m not so sure. But I’m even more sure that any such government would be a gift to the rest of the opposition. And in particular SF.

What of this?

One thing that needs to be repeated again and again because it rarely features in debate in the Dáil or the media is that pay levels in the Irish public service are significantly higher than those in the private sector – and that before generous pensions and job security are even taken into account.

Except this, which by the by isn’t entirely accurate across the entirety of the public sector, ignores the lamentable level of private sector wages in this state. Perhaps that needs to be repeated again and again too. For that features even more rarely in debate in the Dáil or media.

Anyhow there’s more. But it’s dispiriting in 2016 to read this sort of stuff yet again.

Comments»

1. 6to5against - November 9, 2016

It needs to be repeated again and again that for public wages to match private wages in Ireland we would have to:
a. reduce the pay of those earning the least
b. increase the pay of those earning the most
c. drastically reduce the pay of women, but not of men.

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2. 6to5against - November 9, 2016

I also note he says that higher pay wil mean lower welfare payments and leaves the implication there that he would be in favour of higher welfare payments. Ha!

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3. dublinstreams - November 9, 2016

Mary Regan said it was Kenny hyping of the recovery during the election that led to this. Is there enough extra in the companies shifting their taxes to cover this?

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4. Joe - November 9, 2016

I heard SF are saying any acceleration of pay restoration in the public service should be concentrated on those on lower pay first. I agree with this.

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5. Alibaba - November 9, 2016

Stephen Collins says the Garda Labour Court pay deal ‘has the potential to lead to industrial chaos in the public service, and could even precipitate an early general election’. Well, why not? I note the safe pair of hands Tom Geraghty, PSEU Gen Sec and ICTU Public Sector Committee Chair calls the Garda deal a “game changer”. It is a powerful precedent. Union members know it and won’t be cowed in the way they were forced to do so in the past. The trade union tops know this too and are rubbling their hands in glee at the thoughts of the threat of a “free-for-all”. Not that they delight at this prospect. I suspect they will seek a modified Lansdowne agreement or an entirely new one for the public sector, if pushed, and rest on their laurels thereafter.

In the meantime, watch the parties and Indos who cosy up to Fianna Fail. FF is the party who pioneered the use of national wage agreements to paralyse industrial peace for highly restricted returns. Labour might risk going into a grand coalition as a junior partner (and yes) again, rather than perish on the precipice of annihilation. Sinn Fein, as ever, will keep all its options open.

Obviously anything is a possibility, if not a concern. Even cunning Kenny could call a snap election should significant industrial action proceed.

Here’s the main thing: Promise them Everything [before the election] and Deliver them Nothing [okay a few crumbs afterwards].

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