De­mand of €1.6bn by pub­lic sec­tor will be harm­ful

ISME: Cut liv­ing cost in­stead

Irish Daily Mail - - News - By Claire Gorman

PAY in­creases be­ing de­manded by pub­lic ser­vants would trans­fer more wealth from the pri­vate to the pub­lic sec­tor, at the ex­pense of im­por­tant ser­vices and in­fra­struc­ture, it’s been warned.

Pub­lic ser­vice work­ers are look­ing to have their pay re­stored to pre-2009 lev­els, with an in­crease of up to €1.6bil­lion, it emerged yes­ter­day.

Speak­ing ahead of the Pub­lic Ser­vice Ex­ec­u­tive Union’s an­nual con­fer­ence yes­ter­day, the gen­eral sec­re­tary of the union Tom Ger­aghty said they are ‘go­ing to seek the restora­tion of what was taken away from pub­lic ser­vants since 2009’ in forth­com­ing pay talks.

But Neil McDon­nell, CEO of Isme, which rep­re­sents small and medium-sized busi­nesses, said the fo­cus should in­stead be on low­er­ing the cost of liv­ing while spend­ing pub­lic funds on ser­vices such as health and se­cu­rity.

‘The €1.6bil­lion de­mand will sim­ply trans­fer more wealth from the pri­vate to the pub­lic sec­tor, at the ex­pense of needed spend­ing on ser­vices and in­fra­struc­ture.

‘Our chil­dren will be the ones to re­pay the li­a­bil­i­ties we in­cur do­ing this,’ he ex­plained. ‘Pub­lic ser­vants, es­pe­cially the lower-paid ones, are strug­gling to make ends meet, par­tic­u­larly in find­ing af­ford­able hous­ing. The ra­tio of the av­er­age in­dus­trial wage (€36,899) to the av­er­age new house price (around €304,000) is over eight, fig­ures we last saw back in 2008. On a 2.5 times’ earn­ings mul­ti­plier, a civil ser­vant would re­quire an in­come of €121,000 to buy the av­er­age new house. This is sim­ply never go­ing to hap­pen.

‘But the cost of hous­ing – and other liv­ing costs – can be brought down by Gov­ern­ment in­ter­ven­tion. If the PSEU, and the trade union move­ment in gen­eral, are se­ri­ous about im­prov­ing the lot of their mem­bers – and in­creas­ing their real wealth – they should be join­ing with Isme in seek­ing to lower the cost of liv­ing, not ask­ing for a wage-price spi­ral.’

How­ever, Mr Ger­aghty said pub­lic ser­vants are down €1.4bil­lion – an av­er­age 10% re­duc­tion in the in­come of pub­lic ser­vants – since the eco­nomic crash be­cause of wage cuts im­ple­mented un­der the Fempi fi­nan­cial emer­gency leg­is­la­tion.

‘That leg­is­la­tion was grounded in what was said to be a fis­cal emer­gency. The fis­cal emer­gency is clearly over so the le­gal ba­sis for the cuts that have been im­posed since 2009 is gone. It’s the ques­tion of ne­go­ti­at­ing our way out of it now,’ Mr Ger­aghty added.

He in­sisted that pub­lic ser­vants are ‘re­al­is­tic’ and do not ex­pect that the pay will be re­stored ‘in one fell swoop’. They un­der­stand that it would have to be over a pe­riod of time and ‘be cog­nisant of the avail­abil­ity of funds’.

‘The aim would be… to get out of the Fempi leg­is­la­tion and get back to a de­gree of nor­mal­ity in our in­dus­trial re­la­tions,’ he said.

Mr Ger­aghty, who is also sec­re­tary of the Pub­lic Ser­vices Com­mit­tee of the Ir­ish Congress of Trade Unions (ICTU), rep­re­sents 10,000 mid­dle-rank­ing civil ser­vants. When asked how Gov­ern­ment could af­ford the restora­tion, he said he doesn’t ac­cept pub­lic pay lev­els are not sus­tain­able.

‘The Gov­ern­ment ran out of money be­cause of de­ci­sions taken around fis­cal pol­icy where we nar­rowed our tax base to the point where we were overde­pen­dent on taxes that were based on prop­erty trans­ac­tions. To be bru­tally frank about it, the coun­try lost the run of it­self when we were in times of pros­per­ity in the early Noughties,’ he added. He said pub­lic ser­vants were ex­pected to pay dis­pro­por­tion­ately ‘for the nec­es­sary steps to rec­tify what was, quite frankly, a very strange way to ap­proach fis­cal pol­icy’.

Mr Ger­aghty added: ‘There’s been an aw­ful lot of blame heaped on pub­lic ser­vants un­fairly. It was not the fault of pub­lic ser­vants that pub­lic pol­icy was wrong.

‘Pub­lic ser­vants paid a huge price for the fact that it was wrong,’ he said. ‘The emer­gency is over. The jus­ti­fi­ca­tion for pay cuts that were im­posed on pub­lic ser­vants has now gone, and it’s time to move on. It is not in the in­ter­est of pub­lic ser­vants to get into a sit­u­a­tion where we make some deal that isn’t sus­tain­able. We will be re­spon­si­ble in any ne­go­ti­a­tions as we al­ways are. We have to find a steady, or­dered and mea­sured way of restor­ing the cuts that were im­posed on pub­lic ser­vants.

‘That will be the pur­pose of the up­com­ing pay talks.’

Ibec di­rec­tor Maeve McEl­wee said pay in the pub­lic ser­vice must re­flect the av­er­age in­creases that are hap­pen­ing else­where.

‘We have to also con­sider the fact that, be­tween in­cre­ments and the cur­rent pay­ments un­der the Lans­downe Road Agree­ment, there’s re­ally no jus­ti­fi­ca­tion for fur­ther pay in­creases in 2017. But the next pub­lic ser­vice agree­ment for 2018 should con­sider whether in­cre­men­tal wage growth is ap­pro­pri­ate,’ she added.

Civil ser­vants ‘need €121k for a house’ ‘Pub­lic ser­vants paid a huge price’

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