DON’T MISS

Public sector unions want to gobble up the rich rewards of free enterprise without having to take any of the risks, writes Eilis O’Hanlon

The public sector unions are set on mugging the country once again. Eilis O’Hanlon,

IT’S already one of the quotes of the year — “Nobody is doing high fives”. That’s what trade union spokesman Brendan Harbor said after a deal was struck in the wee small hours of last Thursday at the Workplace Relations Commission to give public sector workers a pay rise of up to 10pc over the next three years. To quote Impact’s Head of Communications in all his glory: “Nobody is doing high fives about the deal, but I think it is the best we could have achieved.”

There are only two circumstances in which such a response is appropriate. One is when you really mean it, and have had to make a painful compromise in search of an honourable settlement. The other is when you’re desperately trying to keep the grin off your face, while secretly punching the air when the suckers’ backs are turned.

If trade unionists were not dancing a jig round the room after securing a deal which allows the majority of public servants to see their salaries rise by an average of 7pc, they should have been.

Not doing so would simply be further proof that they have no idea what life is like out here in what is known as the real world, where a 7pc pay rise would prompt collective high-fiving on a scale unseen since Johnny Logan last won Eurovision.

The real world is a place where pay does not automatically increase just because you want it to. It’s a place where levels of pay can remain stagnant for years, even go down and stay there. Yes, boys and girls in the trade unions, stay down. Imagine that if you can.

Public sector workers will have to make some sacrifices through higher pension contributions, but since that’s all for their own benefit, it’s hardly unreasonable.

Newer recruits will also still get lower rates of pay, although a review has been promised 12 months into any new arrangements, so who knows what may be conceded in due course?

And, of course, it’s not a done deal yet. It still has to be put to a vote by union members, presumably with two alternative questions on the ballot paper. Question A: “Do you want some free money?” Question B: “Or are you out of your tiny little minds?”

Because, if they don’t want the pay rise, private sector workers would be only too glad to take it off their hands.

The Department of Public Expenditure reckons the deal to extend the Lansdowne Road Agreement until 2020 will cost €1.1bn over four years, but this is government we’re talking about, so it’s probably best to add a few digits to the final tally for good measure. Even if correct, it means less money for actual public services, given that there’s only so much in the pot and what is taken by one leaves less for the rest.

The more wages are ring-fenced, the more any savings which may have to be made in the future must be drawn from a shrinking pool of departmental budgets rather than the larger ocean of wage bills.

There are other multibillion euro drains on public resources, welfare not least, and some of the money given to public sector workers will be recouped in the form of income tax and in VAT when they spend their extra wages in the shops. But to pretend this is anything other than a victory by the unions over the Government is disingenuous.

The Central Expenditure Evaluation Unit issued a report in 2014 titled The Cost Of The Irish Public Service. It stated on the first page: “The scale of the fiscal crisis that began in 2008 led to the first permanent cut in public service pay rates in the history of the State.” Now we know there is no such thing.

There are only temporary cuts, which can be overturned at the first sign of recovery.

The unions are simply banking wage rises in advance of any future downturn. Did Brexit even feature at all in talks at the Workplace Relations Commission? Surely not, otherwise why would this deal protect the public sector against any downgrade in wages, while leaving the private sector, which faces the greatest exposure to Brexit, with the least protection against its negative effects?

GDP dropped by 7pc in 2009 alone, with a corresponding dropoff in Exchequer revenues and a doubling of payment to jobseekers as unemployment soared.

What if the withdrawal of our most important export market from tariff-free trade in the Eu- ropean Union has a similarly catastrophic impact on Ireland?

That aforementioned paper by the ICTU quotes the First Dail in 1919, which affirmed the “right of every citizen to an adequate share of the produce of the nation’s labour”.

“Adequate” isn’t as radical as it might seem. It covers a multitude of interpretations from subsistence to plenty. But if we take it to mean “fair”, then you could ask what is fair about workers who create the nation’s wealth through enterprise and export ending up with lower incomes than those who make zero contribution to GDP but merely spend the proceeds? What’s fair about increased public spending being syphoned off to pay higher wages rather than on services needed by those who pay most for them?

This latest deal is certainly a coup for union bosses, raising the question of whether they should have been sent out to negotiate with Brussels instead of Government ministers, who always seem to capitulate when the going gets tough. The current Government could not even push through reforms aimed at increasing productivity as a quid pro quo for higher wages.

In short, the unions have mugged the Government, then got them to say how lucky they are because they were kindly allowed to keep the clothes they were standing up in.

Who’s going to pay for all this remains a mystery. Left-wing populists such as People Before Profit at least have the decency to pretend that their wish lists can be paid for by shaking down those they regard as rich and by picking the pockets of business.

The Government doesn’t even have that flimsy camouflage to hide behind. Instead it’s too busy waving off Enda Kenny and Michael Noonan with sycophantic eulogies for all they supposedly did to save the country from economic ruin, despite simply doing what the Troika told them.

Fianna Fail would have done exactly the same thing. So would a well-trained vole. Fine Gael and Labour got to tweak a few details, to give the illusion of being in charge, but left the fundamentals of the Irish economy untouched, its weaknesses gapingly intact.

Does Leo Varadkar intend to do anything to change that when he steps up as Taoiseach? Or is it all style, surface, soundbites?

If the new Fine Gael leader is content to leave things as they are, then what we’re witnessing is the return of Bertie Ahern’s social partnership experiment, which proved to be a giant pyramid scheme when the economy hit the recessionary fan.

Bertie believed that the unions could be bribed into keeping industrial peace with a guarantee of perpetual wage increases, strengthening union overlords who want boom-time wages and pensions without taking the risks that must be run by the private sector.

To listen to pundits such as Fintan O’Toole, who called for the return of social partnership last year, the only problem with the system was that deals were done in back rooms which made the democratic institutions of the State “seem like sideshows”.

Not so. The real problem with social partnership is that it purports to be a tool of economic policy when in truth it’s just a glorified shopping spree that has no connection to how the money needed to keep the country going is actually generated.

Last week’s deal merely confirmed that no lessons have been learned.

That famous “ATM” is open once more, and is dispensing free bank notes.

Please form an orderly queue.

‘Last week’s public sector pay deal proves no lessons have been learned...’