herald

Friday 9 December 2016

Dan White: If pay cuts must be reversed, then give us bang for our buck

Brendan Howlin
Brendan Howlin

In last month's Spring Economic Statement, the Government dangled the prospect of at least a partial reversal of the public sector pay cuts introduced following the 2008 economic crash.

Public Expenditure Minister Brendan Howlin told the Dail that his Department expected "to enter into discussions with the trade unions on the issue of public sector pay".

Now Government "sources" are indicating that between €250m and €300m will be made available to partially reverse public sector pay cuts and that this would be worth in the region of €800 to the average public sector worker.

Regular readers of my Herald articles will need no reminding of my opinion that, with average public sector pay still almost 42pc higher than average private sector pay, there should be no increase in public sector pay and any extra exchequer revenue generated by our economic recovery should be used to cut taxes for all workers.

However, I'm old and hairy enough to know that, with a general election less than a year away and opinion polls showing public support for the coalition parties, Labour in particular, at rock-bottom, the Government has to be seen to "do something" about public sector pay.

With the economic recovery giving them an estimated €1.2bn-€1.5bn a year of "fiscal space", the political divvy-up will see this split 50:50 between public spending increases and tax cuts.

This means that there will be €600m-€750m available for public spending increases. If the latest leaks are to be believed, almost half of the extra public spending will go on higher public sector pay.

Government "sources" are also dropping heavy hints that any public sector pay increases will be skewed in favour of those on lower salaries and it is looking for a two-year deal rather than the one-year deal being sought by the trade unions.

I suppose we should all be grateful for small mercies, but it's hard not be cynical about the whole process.

However, with the political imperative set to win out - it always does in these matters unfortunately - the Government should at least endeavour to make the best of a bad lot.

When the Government of the day first sought to rein in public sector pay after 2008, the plan was that cutting pay levels would form part of a two-pronged process. The prong was to wring greater efficiencies by forcing the trade unions to agree to more flexible work practices.

The quest for greater public service efficiencies led to not one, but two Haddington Road Agreements. Unfortunately, despite the extravagant claims made on their behalf by Mr Howlin, it is difficult to resist the conclusion that these deals have been all hat and no cattle and that the claimed efficiency gains have been more apparent than real.

The touted public sector pay increases give the Government one last chance to make the public sector more efficient. Any pay increases should only be agreed in return for measurable efficiencies.

An obvious example is the nonsensical refusal of the secondary teacher trade unions to agree to long-overdue reform of the Junior Certificate.

Mr Howlin should make it abundantly clear to the ASTI and the TUI that any pay increase for their members will only come after they have agreed to implement the reforms in full. No agreement, no pay increase.

MONEY

If the teachers are unwilling to enter the 21st century then I'm sure the Government can find better uses for our money.

The secondary teachers' refusal to implement the Junior Cert reforms is merely the most egregious example of the failure of the actual public sector "efficiency savings" to match the hype.

All too often the reality has been one of purely cosmetic changes masking the continuation of same old bad habits that got us into this mess in the first place.

Just because this is what should happen is, of course, no guarantee that it will. If the Government fails to use its leverage to secure greater public service efficiencies in return for pay increases then we will all end up paying the price.

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