# Wages: The real competitiveness problem.



## Purple

There is lots of talk about increasing competitiveness etc at the moment. The government is still spinning the same nonsense about “The Knowledge Economy” as if  it is a magic wand that can sort out all of our problems. We need to get the stuff inside the box right before we can start thinking outside it. The bottom line is that as a nation we all get paid too much. The public sector get paid more than the state can afford to pay them and the private sector get paid more than it sustainable to make them competitive in an open international market. 

We aren’t just way out of kilter with Poland and China, we are way out of kilter with the UK and Germany. As an example I got an email from a recruitment company today offering candidates for jobs here and in Northern Ireland. Accountancy Technicians here are looking for €26k-€28k a year. The same sort of people are looking for £12k-£14k per year in the North. 

Forget about everything else when it comes to competitiveness; we need to cut wages significantly right across the country. There are, of course, exceptions, but on a macro level it is our biggest problem.


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## csirl

There is not point in cutting wages unless social welfare rates drop significantly. We alre already in a situation whereby it is not worth working in lower paid jobs. Reduce wages and a lot more people will switch to social welfare, thus increasing our unemployment.


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## shnaek

We should export our knowledge as to how not to run a country. That's the knoweldge that we have over here.
Yes, wages are too high, social welfare is too high - but debt is a big problem, and will become worse if we reduce wages/ SW - so we are trapped in a vicious circle.


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## DB74

I'll take a 20% pay cut if PTSB write off 20% of my mortgage

Good luck to those NI people on living on £12-£14K down South. As csirl says, for a start they would be better off on the dole.


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## PaddyW

There's only so far you can cut wages before people are unable to pay their mortgages, put food on the table, use energy etc. As DB74 said, people might be more willing if the equivalent was knocked off their mortgages !


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## Purple

Cost of living and debt are irrelevant. When you buy a can of beans or a computer in a shop will you pay twice as much because it was produced in a country with high levels of personal debt and living costs? If you are purchasing goods or services for your company will you pay a premium because a particular supplier has a higher cost base? Why would anyone think that people in other countries would pay a premium for our goods or services when given the opportunity we won’t do it ourselves (hence the cross boarder shoppers).

I agree that welfare rates have to drop and I agree that when everything else falls our personal debt levels will still be the same. That’s why we are so screwed; we can’t regain competitiveness because we are so indebted.


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## z107

This thread illustrates the core problem with Ireland.
I can't see a way out of the vicious circle. As taxes increase the problem will only get worse as people default.

(On a personal level, I nearly always now buy goods off the internet. I feel that I'm in competition with highly paid public sector and MNC people whenever I go to buy something in Ireland. This really annoys me. I'll soon be booking my 'dental holiday' to Hungary.)


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## Duke of Marmalade

The conundrum with this argument is that we are not actually living beyond our means, in the sense that we are expected to have a balance of payment surplus this year and indeed a very good balance on goods and services (countered by interest payments and repatriations).


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## onq

The OP's proposition fails because it looks at the problem from the wrong end.
If costs are cut then people can begin to live on less, but cutting wages and/or social welfare and expecting people to be able to cope with existing overpriced goods, services and utilities, is utter nonsense.

The main indices of utilities, education and communication all rose according to the consumer price index for 2010.
[broken link removed]

All areas where the state controls the costs - what does this tell us about the potential to survive this recession?
The only places necessary to cut now are the costs of these essentials, with the social welfare trailing this by a year to allow some benefits to accrue.

But the cutting the cost of an over qualified and over staffed and underworked civil service can start tomorrow.
Whether its a three day week or redundencies, we seriously need to get these costs down ASAP.

And confidentiality be damned - we seriously need a survey or our debt on a household by household basis so that we can see the actual problem not be waffled at by poor mouths with income shortfalls that have two or three foreign properties and a yacth they can can sell off to mitigate their borrowings.

Let's get real on this people and not just focus on cutting the social welfare or berating the costs of working in Ireland without doing a bit of homework and realising that it costs a lot to live here.
This is the main problem facing our return to competitiveness, not the social welfare bill - introduce competition to drive down costs and properl assess the cost of government and administration.

When this cost has been driven down, and this includes the cost of our civil service, then you can look at reducing the social welfare.
Doing it the other way is a typical Capital vs Labour strategy that will end up beggaring the weakest sections of our society.

ONQ.


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## Protocol

My wages are down 10% +.

I pay more income tax.

But, what has happened to my costs????

Electricity price = UP.
House Ins = UP.
Some GPs (admitedly anecdotal evidence) = 55 to 60 = UP.
Solicitors asking 2000 for conveyancing of a house up to the stage before signing of contracts!!!
The list goes on and on..................
I accept the two pay cuts I've taken, but I want to see more cuts in my "overheads".

Ireland's wages are generally not out of line, it's non-wage incomes that are too high.


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## Protocol

One point:

I'm not convinced that industial / factory wages are too high here.


"Professionals" = sol / med consultant / dentists / doctors, etc., yes they are too high

Public sector = yes, a bit high, but have taken two cuts


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## Towger

Shops are still charging too much. The likes of Maplin's are still 30-40% higher in their Dublin shops than in their NI/UK shops.


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## truthseeker

Agree Towger. I also do some online buying, a quick example was a pair of trainers that were priced at 140 Euro in a shop in Dublin, I bought them for 44 Pound online plus delivery.

It hasnt been publicised so much recently but how many people are still taking the trip North to do their shopping in Sainsburys? I suspect in the run up to christmas that those numbers will increase.

While wages for the same job may be lower in NI - the cost of living is also lower.


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## Sunny

This thing about shops charging too much or screwing us over is rubbish at this stage. There is little doubt that there was profiteering during the boom but I would love to meet any retail shop that can make vast profits through overpricing during the biggest economic collapse in the Western World. If a shop is charging more here than in the UK, it is because the costs here are higher. We still have upward only rent reviews for God sake. Look at the minimum wage and cost of employing young people and the cost of employing people at weekends compared to the UK.

Look at restaurant prices. Am amazed that these places make any money.


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## missdaisy

I agree that the cost of employing people is shops in Ireland is high compared to the UK. Upwards only rent reviews are gone now, they can't be put into leases anymore. I don't think any of the smaller shops can make huge profits at the moment but there is still a marked difference between the euro price and sterling price in the bigger shops like Topshop etc.


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## T McGibney

missdaisy said:


> Upwards only rent reviews are gone now, they can't be put into leases anymore.



Okay they don't apply to new leases but they still apply to the vast majority of leases that were in existence before this year.


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## missdaisy

That is true but it means that the rent is the higher of the rent as is or the market rent so in reality the rent is not rising. Also most landlords are actually agreeing rent reductions with their tenants.


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## PaddyW

missdaisy said:


> I agree that the cost of employing people is shops in Ireland is high compared to the UK. Upwards only rent reviews are gone now, they can't be put into leases anymore. I don't think any of the smaller shops can make huge profits at the moment but there is still a marked difference between the euro price and sterling price in the bigger shops like Topshop etc.



Upward only rent reviews are still in practice. True, they can't be put in to new leases, but there are still loads of companies that are locked into them. My own company is an example. Not possible to move location either.


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## Sunny

missdaisy said:


> That is true but it means that the rent is the higher of the rent as is or the market rent so in reality the rent is not rising. Also most landlords are actually agreeing rent reductions with their tenants.


 
Don't know where you get your info from but talk to retailers in Dundrum shopping centre and in St Stephens Green SC and on Grafton St to name some and ask them about rent reductions.


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## missdaisy

I guess it is only in Cork then that landlords are agreeing rent reductions with tenants.


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## PaddyW

Sunny said:


> Don't know where you get your info from but talk to retailers in Dundrum shopping centre and in St Stephens Green SC and on Grafton St to name some and ask them about rent reductions.



Getting the information from my own company. They have a long term lease which is upward only. Also, no reductions, though they have asked for them.


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## missdaisy

PaddyW I think Sunny was agreeing with you and asking me where I got my information!


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## Shawady

The big problem IMO is if the ECB rate goes back up to around the 4% mark in a couple of years.
I've no doubt the drop in mortgage payments is greatly helping many people that have had pay cuts.
If there is not enough spending now, it will be worse if many households are spending thousands extra a year on their mortgage.


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## PaddyW

missdaisy said:


> PaddyW I think Sunny was agreeing with you and asking me where I got my information!



Sorry, totally misread that!


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## onq

Cost of commercial premises is way too high here, as is the cost of renting them.

This follows on from maintaining asset value for pensions funds, such as they are.

ONQ.


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## Towger

onq said:


> Cost of commercial premises is way too high here, as is the cost of renting them.
> 
> This follows on from maintaining asset value for pensions funds, such as they are.
> 
> ONQ.


 
True, but they must take some reasonability for signing such high leases.

Take Korkys, the owner says he is losing about 5k a week on their Grafton St. shop and will pay 100's of K to anyone who takes over the lease. In the last week or two he has put a huge sign over the top 3 floors of the shop stating high rents are killing our jobs.

But he is an experienced shop owner who should know how much it costs to run a shop and the profit margin from his product. So, how did he end up signing a upward only lease, which appears to have no break clauses on rent reviews in the first place?


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## T McGibney

Towger said:


> But he is an experienced shop owner who should know how much it costs to run a shop and the profit margin from his product.  So, how did he end up signing a upward only lease, which appears to have no break clauses on rent reviews in the first place?



Because presumably at the time of doing so, he believed that 'the fundamentals were sound' and that the market patterns at the time would pertain for the foreseeable future. If so, he was not the only person in the country to have that optimistic viewpoint.


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## DB74

Towger said:


> But he is an experienced shop owner who should know how much it costs to run a shop and the profit margin from his product. So, how did he end up signing a upward only lease, which appears to have no break clauses on rent reviews in the first place?


 
Probably didn't have much of a choice at the time. I'm sure there was a queue of people willing to sign a lease on Grafton St. Sign the lease or no presence on Grafton St.


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## Purple

onq said:


> The OP's proposition fails because it looks at the problem from the wrong end.
> If costs are cut then people can begin to live on less, but cutting wages and/or social welfare and expecting people to be able to cope with existing overpriced goods, services and utilities, is utter nonsense.
> 
> The main indices of utilities, education and communication all rose according to the consumer price index for 2010.
> [broken link removed]
> 
> All areas where the state controls the costs - what does this tell us about the potential to survive this recession?
> The only places necessary to cut now are the costs of these essentials, with the social welfare trailing this by a year to allow some benefits to accrue.
> 
> But the cutting the cost of an over qualified and over staffed and underworked civil service can start tomorrow.
> Whether its a three day week or redundencies, we seriously need to get these costs down ASAP.
> 
> And confidentiality be damned - we seriously need a survey or our debt on a household by household basis so that we can see the actual problem not be waffled at by poor mouths with income shortfalls that have two or three foreign properties and a yacth they can can sell off to mitigate their borrowings.
> 
> Let's get real on this people and not just focus on cutting the social welfare or berating the costs of working in Ireland without doing a bit of homework and realising that it costs a lot to live here.
> This is the main problem facing our return to competitiveness, not the social welfare bill - introduce competition to drive down costs and properl assess the cost of government and administration.
> 
> When this cost has been driven down, and this includes the cost of our civil service, then you can look at reducing the social welfare.
> Doing it the other way is a typical Capital vs Labour strategy that will end up beggaring the weakest sections of our society.
> 
> ONQ.



I agree with you but all you are really saying is that we can’t cut wages because debt levels are so high. That’s true but, from the perspective of international customers looking to buy goods or services, nobody cares. 
We will only get out of our current dilemma if we reduce our costs. In this context the reasons why our costs are so high is irrelevant. 

I agree with Sunny that “If a shop is charging more here than in the UK, it is because the costs here are higher.” Even if rents drop wages, always a major cost, will still be way out of kilter with the UK. The reasons why that is so doesn’t change that fact.

During the boom wage costs were inflated across the economy (mainly) by the rises in the building industry (which was in a boom and so demand for labour outstripped supply). That was sustainable only as long as the bubble lasted and demand for the end product, houses and apartments) also outstripped supply. When selling internationally there is no such shortage of supply so selling prices have to be market driven and costs, including wages, have to be set to reflect that market price.


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## DB74

Reducing wages is only going to serve to ensure that people can't pay their debts, including their mortgage.

This will result in further mortgage defaults which in turn will mean that the government will have to bail out those banks even more

At the moment I'm servicing ALL of my debt, the good mortgage one and the bad stupid personal spending one.

When the day comes that I can't pay them all, I'll stop servicing the bad one. If it gets worse I'll stop servicing the mortgage too. When that day comes, it won't even be worth the bank's time to take the property off me because they won't have anyone else to take it off them.

Multiply me by 1,000,000 and that is the reason why we can't reduce wages


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## Purple

DB74 said:


> Reducing wages is only going to serve to ensure that people can't pay their debts, including their mortgage.
> 
> This will result in further mortgage defaults which in turn will mean that the government will have to bail out those banks even more
> 
> At the moment I'm servicing ALL of my debt, the good mortgage one and the bad stupid personal spending one.
> 
> When the day comes that I can't pay them all, I'll stop servicing the bad one. If it gets worse I'll stop servicing the mortgage too. When that day comes, it won't even be worth the bank's time to take the property off me because they won't have anyone else to take it off them.
> 
> Multiply me by 1,000,000 and that is the reason why we can't reduce wages


As I have said before, I agree with you. But that still won't help us improve our competitiveness!


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## DB74

Employer's PRSI could be scrapped - that would save each business 10% of their wage bill straight off without reducing anyone's take-home pay.


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## onq

Purple said:


> I agree with you but all you are really saying is that we can’t cut wages because debt levels are so high. (snip)



My argument is fundamentally different.

There are people still screwing people in this recession.

There are others who are actively resisting helping the least well off.

We need to ensure that essential goods [food] and services [heating, lighting] and accommodation [downward rent reviews, free up NAMA'd housing for sale] are all made available to reduce basic living costs.

We need a price ombudsman to ensure that outrageous profiteering is not taking place in all sectors in a recession.

We need to ensure that critical business services [phones, high speed broadband] are provided at reasonable rates, not left to a series of state sponsored monopoly players screwing us all.

We need to invest in our so-called smart economy now or it won't be very smart in ten yers time when every other country will be way ahead of us.

We need to learn from the transport sector where prices were driven down in air travel through competition yet rose in rail travel, a supposedly "Public" form of transport.

Public transport in general is an unco-ordinated joke.

For example, it came to my attention over the summer that someone visiting here for two weeks could STILL not get an integrated bus and rail card for getting around Dublin.

I don't know about you, but I'm getting back on my bike.

ONQ.


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## Chris

Purple said:


> There is lots of talk about increasing competitiveness etc at the moment. The government is still spinning the same nonsense about “The Knowledge Economy” as if  it is a magic wand that can sort out all of our problems. We need to get the stuff inside the box right before we can start thinking outside it. The bottom line is that as a nation we all get paid too much. The public sector get paid more than the state can afford to pay them and the private sector get paid more than it sustainable to make them competitive in an open international market.
> 
> We aren’t just way out of kilter with Poland and China, we are way out of kilter with the UK and Germany. As an example I got an email from a recruitment company today offering candidates for jobs here and in Northern Ireland. Accountancy Technicians here are looking for €26k-€28k a year. The same sort of people are looking for £12k-£14k per year in the North.
> 
> Forget about everything else when it comes to competitiveness; we need to cut wages significantly right across the country. There are, of course, exceptions, but on a macro level it is our biggest problem.


I've been looking at wages paid in other European countries and in many cases Ireland is very expensive to do business. My dad told me the other day of a business he deals with in former East Germany. Their workers are unskilled and earn between €4 and €5 the hour. 

I also agree with you on the "knowledge economy". Now I am all for education and improvement of it. But merely educating people to a higher standard does not result in a better economy. The Soviet Union had an extremely high rate of scientists and engineers per capita (by some opinions higher than the western world), but this did not save its economy.



onq said:


> The OP's proposition fails because it looks at the problem from the wrong end.
> If costs are cut then people can begin to live on less, but cutting wages and/or social welfare and expecting people to be able to cope with existing overpriced goods, services and utilities, is utter nonsense.


I don't agree. Prices are a result of supply and demand, and when more money chases a limited supply then prices rise, which is what happened here. Wages went up much faster than actual productivity. The only way you can achieve lower prices is for more competition and production to be attracted. And that will only happen if wages come down.



onq said:


> The main indices of utilities, education and communication all rose according to the consumer price index for 2010.
> [broken link removed]
> 
> All areas where the state controls the costs - what does this tell us about the potential to survive this recession?
> The only places necessary to cut now are the costs of these essentials, with the social welfare trailing this by a year to allow some benefits to accrue.
> 
> But the cutting the cost of an over qualified and over staffed and underworked civil service can start tomorrow.
> Whether its a three day week or redundencies, we seriously need to get these costs down ASAP.


Yes indeed, cost of state services are ever increasing, while at the same time so many other non-state services are actually coming down in price. I also agree that the public sector wage bill has to be tackled ASAP, but I think that it would be better to achieve through a reduction in services, quangos and hence employees.



onq said:


> And confidentiality be damned - we seriously need a survey or our debt on a household by household basis so that we can see the actual problem not be waffled at by poor mouths with income shortfalls that have two or three foreign properties and a yacth they can can sell off to mitigate their borrowings.
> 
> Let's get real on this people and not just focus on cutting the social welfare or berating the costs of working in Ireland without doing a bit of homework and realising that it costs a lot to live here.
> This is the main problem facing our return to competitiveness, not the social welfare bill - introduce competition to drive down costs and properl assess the cost of government and administration.


I don't think there is any chance of Ireland by-passing privacy laws. 



onq said:


> When this cost has been driven down, and this includes the cost of our civil service, then you can look at reducing the social welfare.
> Doing it the other way is a typical Capital vs Labour strategy that will end up beggaring the weakest sections of our society.
> 
> ONQ.


Well, it is capital that is lacking most in this country and without capital you cannot increase production, which means you cannot create jobs.



Sunny said:


> This thing about shops charging too much or screwing us over is rubbish at this stage. There is little doubt that there was profiteering during the boom but I would love to meet any retail shop that can make vast profits through overpricing during the biggest economic collapse in the Western World. If a shop is charging more here than in the UK, it is because the costs here are higher. We still have upward only rent reviews for God sake. Look at the minimum wage and cost of employing young people and the cost of employing people at weekends compared to the UK.
> 
> Look at restaurant prices. Am amazed that these places make any money.


Too many businesses are operating with too high capital costs as well as operating costs, which is indeed why prices have only come down so much. I think that a lot more businesses will have to fold before capital costs are driven down enough. As for operating costs, a lot of these are controlled by government.



T McGibney said:


> Because presumably at the time of doing so, he believed that 'the fundamentals were sound' and that the market patterns at the time would pertain for the foreseeable future. If so, he was not the only person in the country to have that optimistic viewpoint.


Yes, this is the big problem. People only saw good times and took no account for a possible downturn.


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## Purple

onq said:


> There are people still screwing people in this recession.



I agree. The protected sectors of the economy; public sector, doctors, semi-state monopolies etc need to be looked at. All government agencies should reduce charges to the public for whatever they provide by 15-20%. They should then to told to cut what they need to cut in order to do what they do within budget. Any sector of the economy where there is a restriction on supply (GP's etc) needs to be looked at. Any sector where there are large barriers to entry needs to be looked at.


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## Chris

Purple said:


> As I have said before, I agree with you. But that still won't help us improve our competitiveness!


Default, public and private, will be the only option in the long term.



onq said:


> My argument is fundamentally different.
> 
> There are people still screwing people in this recession.
> 
> There are others who are actively resisting helping the least well off.
> 
> We need to ensure that essential goods [food] and services [heating, lighting] and accommodation [downward rent reviews, free up NAMA'd housing for sale] are all made available to reduce basic living costs.


Yes indeed, as long as it is driven through an improvement in the competitive private economy.



onq said:


> We need a price ombudsman to ensure that outrageous profiteering is not taking place in all sectors in a recession.


Under no circumstances should government try to interfere with price levels. This always ends up in scarcity. What government should do is make it easier for new competition to enter all parts of the market.



onq said:


> We need to ensure that critical business services [phones, high speed broadband] are provided at reasonable rates, not left to a series of state sponsored monopoly players screwing us all.
> 
> We need to invest in our so-called smart economy now or it won't be very smart in ten yers time when every other country will be way ahead of us.


Yes indeed, some of the state and semi-state organisations are screwing us because of their government protected monopolies.
If by "investment" you mean make it easier for companies to do business here and employing highly educated people then I agree. I also believe that there needs to be  investment in education at al levels. But merely investing in education does not create an economy, you need to attract new and existing companies through a low cost base.



onq said:


> We need to learn from the transport sector where prices were driven down in air travel through competition yet rose in rail travel, a supposedly "Public" form of transport.
> 
> Public transport in general is an unco-ordinated joke.
> 
> For example, it came to my attention over the summer that someone visiting here for two weeks could STILL not get an integrated bus and rail card for getting around Dublin.
> 
> I don't know about you, but I'm getting back on my bike.
> 
> ONQ.


Very good points!


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## Deiseblue

A headlne in the business section of the Examiner today reads- " Nearly half of Irish-based employers to offer workers a pay hike in 2011" according to a report carried outby Mercer HR Consultants.

Bit of positivity about thankfully.


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## Sunny

Deiseblue said:


> A headlne in the business section of the Examiner today reads- " Nearly half of Irish-based employers to offer workers a pay hike in 2011" according to a report carried outby Mercer HR Consultants.
> 
> Bit of positivity about thankfully.



Seriously? Do you think mercer asked the local newsagent, restaurant or any SME? I have not seen the survey but willing to bet that it focused on larger export companies rather than companies exposed to the domestic economy.


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## Deiseblue

Sunny said:


> Seriously? Do you think mercer asked the local newsagent, restaurant or any SME? I have not seen the survey but willing to bet that it focused on larger export companies rather than companies exposed to the domestic economy.


 116 firms surveyed including larger Irish organisations , multinationals and smaller Irish Companies.

Less positivity indeed among the latter with only 1 in 5 expecting to be able to issue pay rises next year.

Good news nevertheless I would have thought , particulary as our current wage levels do not seem to be a problem for multinationals.


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## T McGibney

Deiseblue said:


> A headlne in the business section of the Examiner today reads- " Nearly half of Irish-based employers to offer workers a pay hike in 2011" according to a report carried outby Mercer HR Consultants.





And " Nearly half of Irish people expect the value of their house to rise in  2011" according to a report carried out by Joe Bloggs Auctioneers.


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## Deiseblue

T McGibney said:


> And " Nearly half of Irish people expect the value of their house to rise in  2011" according to a report carried out by Joe Bloggs Auctioneers.


Jeez guys , don't shoot the good news messenger.

I would imagine that Mercers report carries more import than an imaginary report  from "Joe Bloggs " - at least in the real world !


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## number7

Cancel stamp duty
Cancel prsi
Cancel road tax
Cancel 2nd home tax
Cancel all road tolls
Cancel rules on Chilecare ratios
Cancel Sunday work rules
Cancel Senate
Cancel 40 dail seats
Cancel rates 

Introduce 5% increase on personal tax rates
Reduce the corporate tax rate by 1%
Cut all public wages above 80k by 20%
Cut all public wages under 80k by 10% 
Cut all wellfare rates by 10%
Remove minimum wage and jlc wage rules and allow the market dictate.
Standardise VAT at one rate 17% collect it monthly from everyone.

Cancel all tax breaks except for ones that encourage direct employment.

Raid the pension reserve fund for 2 billion, leverage it to 10 billion to set up new business bank to get cash back into the sme sector.

Give employers tax credit of 3k pa for every new full time job created and sustained. (thats a fraction of what the welfare cost is of having the person on the dole.) 

Mandatory rent reduction on all commercial premises of 20% burden of proof lies with owner, big fine if not prooved.

Social Conscription, 6 month mandatory social contribution to an eligable organisation ie concern, st vdp, barnardos, meals on wheels, etc etc Tax credits withheld for non compliance.

Work for dole, everyone on the dole must work for the state for 8 hours per week minimum. Ideally such work should not compete with the private sector.  5000 public sector jobs should be transfered into the management of this scheme.

Rant over


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## Chris

Some fantastic ideas there Number7.

Only ones I disagree with is the governemnt setting up a bank and mandatory rent reduction, as the first is not something politicians are competent to do, and the second is direct interference in contract laws.
The other thing I think you don't go far enough with is working for the dole, this should be at least 20 hours per week.


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## number7

Chris said:


> Some fantastic ideas there Number7.
> 
> Only ones I disagree with is the governemnt setting up a bank and mandatory rent reduction, as the first is not something politicians are competent to do, and the second is direct interference in contract laws.
> The other thing I think you don't go far enough with is working for the dole, this should be at least 20 hours per week.


 
I understand your reluctance on the government run bank....but it is the only way I can think of that would keep high employment sectors working while keeping the borrowings off the national balance sheet. Perhaps the government could just set it up and hand it over to a board of directors that were acceptable to the irish public.

I would personally like to see people work for a full week for their dole but the practicality of that could be very difficult. 8 hours should be possible for everyone, even the ones who have swapped work for being the primary caregiver at home. Setting the bar too high could cause the whole concept to fail. Once the concept has been accepted it could be adjusted each year in the same way we adjust the tax bands. I would be happy to see it started at 4 hours.

One I forgot, I would love to see a move towards a national income for every man woman and child instead of tax credits and welfare. This move would allow all income to be taxed from the very first euro.

Another one I forgot, Cancel the anticompetitive payments to RTE and abolish the tv licence.

By abolishing the tv licence and road tax you create the space for a property tax of €500.00 pa, €250.00 to local authority and €250 to central taxes.

Water rates, over my dead body.


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## Chris

number7 said:


> I would personally like to see people work for a full week for their dole but the practicality of that could be very difficult. 8 hours should be possible for everyone, even the ones who have swapped work for being the primary caregiver at home. Setting the bar too high could cause the whole concept to fail. Once the concept has been accepted it could be adjusted each year in the same way we adjust the tax bands. I would be happy to see it started at 4 hours.



That's a very good point. Maybe another solution would be for unemployed to start off working 8 hours per week, and every month the amount of hours are increased, so that ultimately the person is working full time for the dole, giving ever more incentives to take a job.


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## number7

I like it. 

"Unemployment the game show for all the family" 

"and now for this week work off"

Joking, im really bored today.


----------



## onq

Deiseblue said:


> A headlne in the business section of the Examiner today reads- " Nearly half of Irish-based employers to offer workers a pay hike in 2011" according to a report carried outby Mercer HR Consultants.
> 
> Bit of positivity about thankfully.



Are you sure it wasn't that they misheard "...will tell their workers to take a hike in 2011"?


----------



## Complainer

Chris said:


> That's a very good point. Maybe another solution would be for unemployed to start off working 8 hours per week, and every month the amount of hours are increased, so that ultimately the person is working full time for the dole, giving ever more incentives to take a job.



How about offering them the 'incentive' of a salary? Is there a chance that might work?


----------



## Purple

number7 said:


> I would personally like to see people work for a full week for their dole but the practicality of that could be very difficult. 8 hours should be possible for everyone, even the ones who have swapped work for being the primary caregiver at home.


 If someone has swapped employment for the role as primary care giver at home then they are not available for work and so should get no unemployment benefits.


----------



## sunrock

The governments strategy is to cut spending  and to stop hiring with the public service jobs embargo.
What about the unemployed and those entering the jobs market after finishing their education?
We have the crazy situation that because of the croke park agreement the salaries of public sector workers cannot be reduced.Yet Mary Harney is going to make huge cuts in health but apparently can`t touch salaries,which make up the bulk of health spending.
We need serious cuts in wages and salaries, and also job sharing so that we can have a fully staffed public service.


----------



## number7

Purple said:


> If someone has swapped employment for the role as primary care giver at home then they are not available for work and so should get no unemployment benefits.


 
Thems the facts all right Purple, but thats not whats happening out in new ireland.

Parents who have work employ childcare, parents who dont have work in general cant afford to employ childcare so don't. Never heard of anyone losing their dole because they were minding their kids, have you?


----------



## FioBi

number7 said:


> I understand your reluctance on the government run bank....but it is the only way I can think of that would keep high employment sectors working while keeping the borrowings off the national balance sheet. Perhaps the government could just set it up and hand it over to a board of directors that were acceptable to the irish public.
> 
> I would personally like to see people work for a full week for their dole but the practicality of that could be very difficult. 8 hours should be possible for everyone, even the ones who have swapped work for being the primary caregiver at home. Setting the bar too high could cause the whole concept to fail. Once the concept has been accepted it could be adjusted each year in the same way we adjust the tax bands. I would be happy to see it started at 4 hours.
> 
> One I forgot, I would love to see a move towards a national income for every man woman and child instead of tax credits and welfare. This move would allow all income to be taxed from the very first euro.
> 
> Another one I forgot, Cancel the anticompetitive payments to RTE and abolish the tv licence.
> 
> By abolishing the tv licence and road tax you create the space for a property tax of €500.00 pa, €250.00 to local authority and €250 to central taxes.
> 
> Water rates, over my dead body.


I agree with Water Rates. Water is a precious resource that we are very luck to have and if we pay for it we will conserve it. It is also a service so you can see what you are getting.
Property Tax over my dead body!   
What service would I get for that?  I already provide accomodation for myself and my family by buying my own house and therefore not expecting the state (ie the rest of us) to provide me with accomodation.  All that will happen here is we pay more tax to local government for them to remain inefficient. There are too many councillors pay too much, too many people employed in County Councils, how many planning staff have been let go? They cant have anything to do as no one is building anything.


----------



## Zikan

*wage decreases bad*

In relation to the original statement, you cant decrease the minimum wage until the cost living in this country decreases. the cost of some services are still increasing, such as the TV licence, oil, and public travel. Also, especially when its looking like all benifits are going to get hammered in the next budget aswell as the introduction of water charges the lower earners of the spectrum will need every cent they get.


----------



## z104

I think we need to benchmark public/civil service salaries with those in the north of Ireland.

It was mentioned that this would save approx: 27 billion euro on RTE this morning.


----------



## Complainer

Niallers said:


> I think we need to benchmark public/civil service salaries with those in the north of Ireland.
> 
> It was mentioned that this would save approx: 27 billion euro on RTE this morning.


Great idea - and we'll benchmark mortgage payments, rent payments, grocery bills and professional services fees against NI at the same time - right?


----------



## Firefly

Complainer said:


> How about offering them the 'incentive' of a salary? Is there a chance that might work?



Don't think we have enough money for that do you?


----------



## Firefly

Complainer said:


> Great idea - and we'll benchmark mortgage payments, rent payments, grocery bills and professional services fees against NI at the same time - right?



Mortgage payments (interest rate) is already lower here. 
The state is the biggest employer by far in this country. If wages in the PS are cut dramatically, rents. grocery bills & fees will have to fall as there is less money to pay for them.


----------



## chrisboy

Firefly said:


> Mortgage payments (interest rate) is already lower here.
> The state is the biggest employer by far in this country. If wages in the PS are cut dramatically, rents. grocery bills & fees will have to fall as there is less money to pay for them.




There's a big difference between Mortgage payments and interest rates..

There was a 15% cut in PS wages including the pension levy. Did grocery bills and fees fall much last year?


----------



## Chris

Complainer said:


> How about offering them the 'incentive' of a salary? Is there a chance that might work?


Yes, I think that can work. Germany has a similar system, where after 12 months of unemployment you have to work to receive all your entitlements. If you cannot find a "1 € job", as they are called, then you are placed in one. This does not guarantee employment, but it dow provide some work experience to unskilled people, and incentivises skilled people to take a lower paying job than they are used to.



Zikan said:


> In relation to the original statement, you cant decrease the minimum wage until the cost living in this country decreases. the cost of some services are still increasing, such as the TV licence, oil, and public travel. Also, especially when its looking like all benifits are going to get hammered in the next budget aswell as the introduction of water charges the lower earners of the spectrum will need every cent they get.


Minimum wage along with other public sector wage cuts can be done if the state also reduces taxation. It's not really a chicken and egg debate, as the amount of money available in the public hands dictates the price levels, not the other way around. If the minimum wage is not reduced then in a very short time you will find prices and employment dropping.


----------



## z107

Some people are posting like there is a choice not to cut public sector pay. Well what happens in another few months when no one is lending to Ireland, and all the (borrowed) money has run out? What do we pay the public sector with then?

I've mentioned on another thread that a possible solution would be to reverse every decision made by bertie ahern and his government. Reset the country back to 1996.


----------



## Chris

umop3p!sdn said:


> Some people are posting like there is a choice not to cut public sector pay. Well what happens in another few months when no one is lending to Ireland, and all the (borrowed) money has run out? What do we pay the public sector with then?
> 
> I've mentioned on another thread that a possible solution would be to reverse every decision made by bertie ahern and his government. Reset the country back to 1996.



Fantastic idea. What would have to happen then though, is for a law to be introduced that all future laws have to affect everyone in the same way. Otherwise you are going to have a new set of politicians making the same mistakes of favouring one group of people or businesses over another.


----------



## sunrock

I am in favor of cutting public sector pay but not in favor of cutting public sector jobs.
Of course everyone must take a hit including those on welfare, but the fact remains the public sector salaries increased so much during the good years that these must now be reversed.The government "negotiating"  with the unions  is a pointless exercise as the unions will only agree to salary increases and negotiations aren`t needed for that.With peoples reduced spending power prices and fees will fall.
They can`t touch corporate tax rates unless one wants the multinationals to leave. 
I see Ned o Keefe has got assurances that the old age pension won`t be cut...it wasn`t cut in the last budget either.Also the disabled sector /carers has been highlighted in Primetime so that will be treated sympathetically. Personally I don`t think they should be exceptions except in life or death situations. The OAP pensions should definetly be cut.


----------



## T McGibney

sunrock said:


> I am in favor of cutting public sector pay but not in favor of cutting public sector jobs.cut.



So if some public servants have no work to do or are doing work that is no longer needed, they should be left in situ until they reach retirement age?


----------



## z104

chrisboy said:


> There's a big difference between Mortgage payments and interest rates..
> 
> There was a 15% cut in PS wages including the pension levy. Did grocery bills and fees fall much last year?


 
Yes?


----------



## Deiseblue

sunrock said:


> I am in favor of cutting public sector pay but not in favor of cutting public sector jobs.
> Of course everyone must take a hit including those on welfare, but the fact remains the public sector salaries increased so much during the good years that these must now be reversed.The government "negotiating" with the unions is a pointless exercise as the unions will only agree to salary increases and negotiations aren`t needed for that.With peoples reduced spending power prices and fees will fall.
> They can`t touch corporate tax rates unless one wants the multinationals to leave.
> I see Ned o Keefe has got assurances that the old age pension won`t be cut...it wasn`t cut in the last budget either.Also the disabled sector /carers has been highlighted in Primetime so that will be treated sympathetically. Personally I don`t think they should be exceptions except in life or death situations. The OAP pensions should definetly be cut.


 
Negotiations have concluded with the unons on Public Sector pay and pensions and an accord has been reached - the Croke Park Agreement.

Pay and pensions will remain untouched until at least 2014 , which of course contradicts the statement that unions will only negotiate on increases.

I know that people are aware of the foregoing but somehow feel that despite recent assurances from both Brians , Mary Harney and Dara Calleary on Newstalk this morning that PS pay is ringfenced that somehow it is going to be hit again in the 4 year plan to realign our fiscal situation - I just can't see it myself .

Notwithstandind that every sector is going to be hammered by a combination of tax increases and spending cuts.


----------



## sunrock

T McGibney said:


> So if some public servants have no work to do or are doing work that is no longer needed, they should be left in situ until they reach retirement age?


 
Well these people can be deployed where they are needed..presumably they are educated and flexible.Nurses,teachers guards etc have plenty of work to do.
Its clear now what the consequence of the croke park agreement is about.
The public sector workers can keep their high salaries and instead the government will increase tax rates on all workers....public and private.This is just politically easier for the government to do but it would make more sense for the gov. to apply reverse benchmarking to public sector pay taking it back to levels 10 or more years ago.We now have a situation where a senior  engineer with an MNC working long hours and under a lot of pressure and no job security will have a similiar salary as a national school principal.Both will have to pay lots of extra income tax.I know which job I`d prefer.


----------



## PaddyW

I think it's important to remember, that not all public sector workers are paid very high wages. Why not just target the high earners instead? Would this make a significant difference?


----------



## Complainer

sunrock said:


> We now have a situation where a senior  engineer with an MNC working long hours and under a lot of pressure and no job security will have a similiar salary as a national school principal.Both will have to pay lots of extra income tax.I know which job I`d prefer.


My national school principle is regularly at work at 9pm-10pm at night. She is dealing with increasing demand and reduced resources. She is dealing with more and more children from families that don't speak English, more children with disabilities in mainstream schools. She's doing a fabulous job, and deserves every penny she gets. If you fancy her job, then feel free to apply the next time a post becomes vacant.



Firefly said:


> Mortgage payments (interest rate) is already lower here.
> The state is the biggest employer by far in this country. If wages in the PS are cut dramatically, rents. grocery bills & fees will have to fall as there is less money to pay for them.


But why would you limit this to public sector wages? If you want Govt intervention to bring down prices, just simply increase tax across the board, so everyone's wages will drop - then the prices will drop for everybody. This would be far more effective that just targeting one sector of the economy - right?


----------



## Firefly

Complainer said:


> But why would you limit this to public sector wages? If you want Govt intervention to bring down prices, just simply increase tax across the board, so everyone's wages will drop - then the prices will drop for everybody. This would be far more effective that just targeting one sector of the economy - right?



Bringing down prices is one thing and I take your point about tax hitting everybody. The issue really is the 400m a week we are borrowing to pay for our current deficit. I've asked you on another thread and got no response so here it is again - do you really think that increasing the taxes will save the gov 400m a week? I don't and think salaries and pensions in the PS need to fall. We just can't afford it!!


----------



## truthseeker

Complainer said:


> My national school principle is regularly at work at 9pm-10pm at night. She is dealing with increasing demand and reduced resources. She is dealing with more and more children from families that don't speak English, more children with disabilities in mainstream schools. She's doing a fabulous job, and deserves every penny she gets. If you fancy her job, then feel free to apply the next time a post becomes vacant.


 
And Ive a good friend in the public sector who tells me openly that the 2 most senior people in his office do no work and one of them spends the day examining the ceiling between pushing bits of paper around his desk.

We can all come up with extreme examples.

Personally I would like to see public sector pay left alone but for the public sector workforce to be stripped back where there is redundancy.


----------



## number7

FioBi said:


> I agree with Water Rates. Water is a precious resource that we are very luck to have and if we pay for it we will conserve it. It is also a service so you can see what you are getting.
> Property Tax over my dead body!
> What service would I get for that? I already provide accomodation for myself and my family by buying my own house and therefore not expecting the state (ie the rest of us) to provide me with accomodation. All that will happen here is we pay more tax to local government for them to remain inefficient. There are too many councillors pay too much, too many people employed in County Councils, how many planning staff have been let go? They cant have anything to do as no one is building anything.


 
My reluctance to water rates is that most of this vital natural resource (40% and upwards) is lost in the system not by the end user. If we were able to eliminate this waste then it would not be unreasonable to charge for use of water above a basic allowance.

I do not like the idea of a property tax at all but I do accept that it is necessary to collect taxes from areas other than employment based taxation.  

But lets not worry too much about it the IMF will sort it out next year.


----------



## Complainer

truthseeker said:


> And Ive a good friend in the public sector who tells me openly that the 2 most senior people in his office do no work and one of them spends the day examining the ceiling between pushing bits of paper around his desk.
> 
> We can all come up with extreme examples.



I've been round many parts of the public sector for five years, and I've never come across or heard of these scenarios, on or off the record.

But if you're confident that this is actually happening, then take some action. Write to the CEO or chairperson identifying the relevant office and demanding action. Or get your friend to raise the problem through his partnership committee. Or get on to Shane Ross or whatever.


----------



## truthseeker

Complainer said:


> I've been round many parts of the public sector for five years, and I've never come across or heard of these scenarios, on or off the record.


 
Well perhaps you need to spend some time in a particular office and be familiar with the workload and who is doing what to notice it?


----------



## z107

Please don't let this descend into the usual public/private tit for tat. The government loves infighting because it takes the spotlight off of the real problem. Those at the helm.

Can anyone answer my previous question?


> Well what happens in another few months when no one is lending to Ireland, and all the (borrowed) money has run out? What do we pay the public sector with then?


----------



## truthseeker

> What do we pay the public sector with then?


 
We can ask the IMF when they come in.


----------



## Shawady

If the IMF come in, the public sector won't be the only casualty. The social welfare budget would have to be slashed just as much. You can kiss goodbye to the low corperation tax too.


----------



## z107

> You can kiss goodbye to the low corperation tax too.


Can the last person to leave, please remember to switch off the lights?


----------



## sunrock

Complainer said:


> My national school principle is regularly at work at 9pm-10pm at night. She is dealing with increasing demand and reduced resources. She is dealing with more and more children from families that don't speak English, more children with disabilities in mainstream schools. She's doing a fabulous job, and deserves every penny she gets. If you fancy her job, then feel free to apply the next time a post becomes vacant.
> 
> 
> But why would you limit this to public sector wages? If you want Govt intervention to bring down prices, just simply increase tax across the board, so everyone's wages will drop - then the prices will drop for everybody. This would be far more effective that just targeting one sector of the economy - right?


 
Granted there are many low paid public service workers and of course their wages wouldn`t be reduced too much.But all the public service workers on 50k + and there are a lot of them should get their benchmarking reversed so they are earning what they were 10 or more years ago+.
These workers and their unions all demanded benchmarking when the government was flush...now that the government has to make cuts they don`t want to contemplate salary cuts. So what is the point of "negotiating " with the public sector unions.
You talk about your school principal working long hours and deserving every penny she gets.First there should be jobsharing for people like her for a pro rata rate. And as for " evey penny she gets she deserves". My point is no...there is only so much money to go around so she only deserves what the state can afford to pay her.
Posters here know I am in favor of job sharing and not job cuts because of our large amount of unemployed.
I am not in favor of the government intervening on the private sector wages and indeed they don`t and certainly not on prices of goods in the shops.


----------



## Chris

sunrock said:


> Granted there are many low paid public service workers and of course their wages wouldn`t be reduced too much.But all the public service workers on 50k + and there are a lot of them should get their benchmarking reversed so they are earning what they were 10 or more years ago+.
> These workers and their unions all demanded benchmarking when the government was flush...now that the government has to make cuts they don`t want to contemplate salary cuts. So what is the point of "negotiating " with the public sector unions.
> You talk about your school principal working long hours and deserving every penny she gets.First there should be jobsharing for people like her for a pro rata rate. And as for " evey penny she gets she deserves". My point is no...there is only so much money to go around so she only deserves what the state can afford to pay her.
> Posters here know I am in favor of job sharing and not job cuts because of our large amount of unemployed.


I agree with your point about what people deserve. Most people believe they deserve more for their work, but we can only get what our employer is able and willing to give us. 
However, the problem with a blanket wage cut is that this results in those employees that we are most reliant on and that are doing the best job, like gards and nurses or the school principle mentioned, becoming disgruntled, while at the same time not getting rid of excess resources that were built up in the last 10 years.



sunrock said:


> I am not in favor of the government intervening on the private sector wages and indeed they don`t and certainly not on prices of goods in the shops.


Actually they do. The minimum wage enforced by government is the single biggest burden to increasing employment. It also has a direct effect on wage rates and employment numbers in semi-skilled work.
If government starts introducing price controls it will definately be time to leave.


----------



## Complainer

Chris said:


> However, the problem with a blanket wage cut is that this results in those employees that we are most reliant on and that are doing the best job, like gards and nurses or the school principle mentioned, becoming disgruntled, while at the same time not getting rid of excess resources that were built up in the last 10 years.


Please come and spend one day in the school, and then you can see that there are no excess resources, and in fact, they have been dramatically underresourced for many years.


----------



## shnaek

Complainer said:


> Please come and spend one day in the school, and then you can see that there are no excess resources, and in fact, they have been dramatically underresourced for many years.



This is true, because the increased budgets were spent on wages. That is always the choice - capital or wages, and the unions chose wages.


----------



## Purple

shnaek said:


> This is true, because the increased budgets were spent on wages. That is always the choice - capital or wages, and the unions chose wages.


This is true for all of the public sector, healthcare sector and education sector.
I remember not so long ago the nurses holding the sick and vulnerable to ransom in order to get a 10% pay increase and a 12.5% reduction in their working week (a 25% pay hourly rate pay increase). Within weeks of getting this massive increase they were back outside the A&E departments protesting about lack of resources. Obviously Liam Doran doesn't understand irony.

The same is true of the teachers unions who, after getting round after round of massive pay increases then protested about class sizes and school buildings. 

These people are either very stupid or very hypocritical.


----------



## Complainer

shnaek said:


> This is true, because the increased budgets were spent on wages. That is always the choice - capital or wages, and the unions chose wages.


Sorry, you don't get off that easy. That's not the choice. The real choices are something like; decent wages and decent resources, or continued tax reliefs for pension contributions, tax releifs for property investors, tax reliefs for private healthcare clinics, tax reliefs for private colleges, state subsidies to private schools etc etc. It all comes out the one pot, so if you're going to make comparisons, let's look at the big picture. Don't expect teachers to take the blame for poor funding of schools.


----------



## Deiseblue

Purple said:


> This is true for all of the public sector, healthcare sector and education sector.
> I remember not so long ago the nurses holding the sick and vulnerable to ransom in order to get a 10% pay increase and a 12.5% reduction in their working week (a 25% pay hourly rate pay increase). Within weeks of getting this massive increase they were back outside the A&E departments protesting about lack of resources. Obviously Liam Doran doesn't understand irony.
> 
> The same is true of the teachers unions who, after getting round after round of massive pay increases then protested about class sizes and school buildings.
> 
> These people are either very stupid or very hypocritical.


 
A few facts would'nt go astray .

The nurses never received this " massive increase "  as you claim.

The 10 % increase was to be dealt with under the benchmarking process and was never subsequently delivered and the working week was decreased from 39 hours to 37.5 hours and as such your statement that they actually secured this massive increase is wrong.

Pay is obviously a two way street and if the employer after discussions with their respective unions decide that for example teachers are worth their salaries then who are we to argue ?


----------



## lightswitch

Purple said:


> There is lots of talk about increasing competitiveness etc at the moment. The government is still spinning the same nonsense about “The Knowledge Economy” as if it is a magic wand that can sort out all of our problems. We need to get the stuff inside the box right before we can start thinking outside it. The bottom line is that as a nation we all get paid too much. The public sector get paid more than the state can afford to pay them and the private sector get paid more than it sustainable to make them competitive in an open international market.
> 
> We aren’t just way out of kilter with Poland and China, we are way out of kilter with the UK and Germany. As an example I got an email from a recruitment company today offering candidates for jobs here and in Northern Ireland. Accountancy Technicians here are looking for €26k-€28k a year. The same sort of people are looking for £12k-£14k per year in the North.
> 
> Forget about everything else when it comes to competitiveness; we need to cut wages significantly right across the country. There are, of course, exceptions, but on a macro level it is our biggest problem.


 
Personally I would find it impossible to live on 28k, particularly after tax.  When you say "there are of course exceptions"  would you be referring to yourself by any chance?  Or are you happy to reduce your wages to 14k sterling?


----------



## shnaek

There is no more money. When are people going to realise this? Reality will have to dawn at some stage. People all over the world deserve a decent wage for the hard work they do. But they can only be paid with the money that's available. Where do people think that money comes from?


----------



## shnaek

Complainer said:


> That's not the choice.


That is the choice. A department, such as health or education, has a budget - just like you and I have a budget. We decide how we spend that budget. They chose to spend it on wages. You can't keep taxing people just like the old monarchs of Europe - sooner or later the money runs out and everyone ends up poorer as a result. 
Our spending on health matches that of the best nations in Europe, they spent wisely, we spent poorly.


----------



## z107

> Sorry, you don't get off that easy. That's not the choice. The real choices are something like; decent wages and decent resources, or continued tax reliefs for pension contributions, tax releifs for property investors, tax reliefs for private healthcare clinics, tax reliefs for private colleges, state subsidies to private schools etc etc. It all comes out the one pot, so if you're going to make comparisons, let's look at the big picture. Don't expect teachers to take the blame for poor funding of schools.


The pot will be empty in another few months. Sometime early next year.
When all the borrowed money has run out, and Ireland is unable to borrow any more, where will the public sector pay come from then?


----------



## Purple

lightswitch said:


> Personally I would find it impossible to live on 28k, particularly after tax.  When you say "there are of course exceptions"  would you be referring to yourself by any chance?  Or are you happy to reduce your wages to 14k sterling?



My pay is related to the profitability of the company I work for. If it can make a profit and still cover the existing wage bill then wages are not too high. If it can't then wages will be cut. 
As we are a private  company that is 100% export focused we are benchmarked against international competition (and always have been). Therefore we charge the same as the guys in the UK, USA, Poland etc. If our wages are twice as high then our overall productivity has to be high enough to compensate for that.

My outgoings are set by my income. My income is based on my value in an open international market.


----------



## Complainer

umop3p!sdn said:


> The pot will be empty in another few months. Sometime early next year.


Strange how pretty much every economic forecast (even the most pessimistic ones) seem to disagree with your conclusion here.


----------



## z107

> Strange how pretty much every economic forecast (even the most pessimistic ones) seem to disagree with your conclusion here.


Do they? That is indeed very strange.

Okay, so we do have a bottomless pit of money. Nothing to worry about then. No need to increase taxes in the budget either because we can just borrow more.

Problem solved.


----------



## Chris

Complainer said:


> Please come and spend one day in the school, and then you can see that there are no excess resources, and in fact, they have been dramatically underresourced for many years.


I wasn't referring to front line education services, where I agree with you about under-resourcing at primary and secondary level. This is exactly why I disagree with the approch of blanket pay cuts and resource cuts in all services. 



shnaek said:


> There is no more money. When are people going to realise this? Reality will have to dawn at some stage. People all over the world deserve a decent wage for the hard work they do. But they can only be paid with the money that's available. Where do people think that money comes from?


Absolutely right. The problem is that government has over-extended the number of services over the years, which put ever increasing pressure on the most important services. Now that money is running out it should be an approach of scrapping unnecessary services, not cutting everything back.


----------



## Complainer

shnaek said:


> That is the choice. A department, such as health or education, has a budget - just like you and I have a budget. We decide how we spend that budget. They chose to spend it on wages. You can't keep taxing people just like the old monarchs of Europe - sooner or later the money runs out and everyone ends up poorer as a result.
> Our spending on health matches that of the best nations in Europe, they spent wisely, we spent poorly.



Nope, that's not the choice. You are deliberately ignoring the income side of the budget, particularly taxation and elimination of tax reliefs. The money is there, it just isn't being collected for public services at the moment. Our tax model has to change.




Chris said:


> I wasn't referring to front line education services, where I agree with you about under-resourcing at primary and secondary level. This is exactly why I disagree with the approch of blanket pay cuts and resource cuts in all services.


Sorry, I misread your post. Though (surprise, surprise) I still disagree. This simplistic approach of 'front-line good, back-office bad' is nonsense. There are hard-working, over-stressed, under-resourced front line and back office workers in all parts of the public sector and all parts of the private sector. There are a few lazy shysters in all parts of the public sector and all parts of the private sector. The techie guy/gal who is coding the IT systems to manage the X-ray results is just as important as the radiographer who is taking the xray, and maybe even more important in terms of bringing out real cost savings in the future.


----------



## Firefly

Complainer said:


> Nope, that's not the choice. You are deliberately ignoring the income side of the budget, particularly taxation and elimination of tax reliefs. The money is there, it just isn't being collected for public services at the moment. Our tax model has to change.



I'll try for the 3rd time - do you think that we can extract 400m a week in taxation to pay for current spending?


----------



## T McGibney

(posted twice in error)


----------



## T McGibney

Complainer said:


> Nope, that's not the choice. You are  deliberately ignoring the income side of the budget, particularly  taxation and elimination of tax reliefs. The money is there, it just  isn't being collected for public services at the moment. Our tax model  has to change.



This is certainly a valid point, to an extent. There are some ridiculous tax credits, deductions and reliefs out there that could be scrapped or curtailed. There may be some scope to increase some taxes (without doing signficiant harm to the economy as happened with the 2009 VAT hike) 

However on the other hand I'm pretty doubtful that there is sufficient scope under either heading to increase the State's tax revenue by the 50-60% needed (approx €30bn to €50bn) to close the deficit.

For example, is it really feasible to expect to raise the standard VAT rate from 21% to 32% when the State couldn't manage to raise it to 21.5% without adverse effects? And is it really feasible to expect a 50-60% rise in the Income Tax yield from the elimination of property incentives etc when these are now about as fashionable as Anglo Irish Bank? And if not, can the economy and the State really sustain a rise in income taxes rates from 20%/41% to 30%/62% or the elimination of credits etc from ordinary people that would give rise to the same result?



Complainer said:


> There are a few lazy shysters in all parts of the public sector and all parts of the private sector. The techie guy/gal who is coding the IT systems to manage the X-ray results is just as important as the radiographer who is taking the xray, and maybe even more important in terms of bringing out real cost savings in the future.



I think it is unhelpful to label people as lazy shysters. I don't know anyone, private sector or public sector, who doesn't go into work in the morning with the intention of doing an honest day's work.  I do know people who  have been for a long time utterly frustrated in their jobs by a combination of grossly inefficient and outdated processes, poor and non-existent management direction, political and corporate-ladder interference at every turn, and ongoing resistance to change on the part of powerful vested interests. 

An example was one of the major banks who castigated and punished branch staff for occasional mistakes in relation to retention of client ID records while encouraging them to ignore warning signs in relation to customers' credit-worthiness.

Another example is a major HSE 'Centre of Excellence' which employs hundreds of people and whose payroll is still to this day operated manually by staff who have to physically write up tax deduction cards by hand.

I don't accept for one moment that the people working under such conditions are lazy shysters, but the institutions that they worked and work for need urgent root-and-branch rationalisation and reform. The banks have already reaped a bitter harvest by resisting and delaying this process for as long as they did. Increasing numbers of private sector firms are going in the same direction. Do we want the public sector to make the same grevious mistake?


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## shnaek

Complainer said:


> Nope, that's not the choice. You are deliberately ignoring the income side of the budget, particularly taxation and elimination of tax reliefs. The money is there, it just isn't being collected for public services at the moment. Our tax model has to change.


On the contrary - the income side is foremost on my mind. The country is spending 50bn when it earns 30bn. There is scope for tax rises in that 50% of workers pay no tax at all. There is also scope for closing off tax shelters. But there is no magic bullet. The country must live within its means. This is simple reality. 
Anyone look at the 10 year bond yields yesterday? We're up to almost 6.7%. There is no way we will be out of the 6-7% range after Christmas, and we all know what that means. Higher taxes have never worked, the people who pay our bills know this, and that is part of the reason why they won't be lending us money on the cheap any time soon. We need to tackle our spending. We are way out of line with our trading partners. One way or another this imbalance will be rectified. The only choice is whether we do it, or someone else does it for us.


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## Chris

Complainer said:


> Sorry, I misread your post. Though (surprise, surprise) I still disagree. This simplistic approach of 'front-line good, back-office bad' is nonsense. There are hard-working, over-stressed, under-resourced front line and back office workers in all parts of the public sector and all parts of the private sector. There are a few lazy shysters in all parts of the public sector and all parts of the private sector. The techie guy/gal who is coding the IT systems to manage the X-ray results is just as important as the radiographer who is taking the xray, and maybe even more important in terms of bringing out real cost savings in the future.



Having lazy or do-nothing workers is not the problem. The problem is that there are way too many inefficiencies without any incentive to get rid of them. During the Croke Park negotiations unions came out and said that the cuts needed could be achieved through changes in work practices and increasing efficiencies. Why was this not ongoing for the past 10 years?!?!
IT systems have vastly improved the way motor tax is collected. Has this resulted in any reduction in motor tax offices and their employees? The same is the case for the revenue offices.
There are too many unnecessary services and departments, that have every incentive to maintain old and inefficient work practices rather than introduce newer and more efficient ones.


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## Complainer

shnaek said:


> On the contrary - the income side is foremost on my mind. The country is spending 50bn when it earns 30bn. There is scope for tax rises in that 50% of workers pay no tax at all.


THis is nonsense. Perhaps you haven't heard of VAT - it brings in more revenue for the state than income tax, and everyone who lives here pays VAT. There are 0% of workers that 'pay no tax at all'.


Chris said:


> Having lazy or do-nothing workers is not the problem. The problem is that there are way too many inefficiencies without any incentive to get rid of them. During the Croke Park negotiations unions came out and said that the cuts needed could be achieved through changes in work practices and increasing efficiencies. Why was this not ongoing for the past 10 years?!?!
> IT systems have vastly improved the way motor tax is collected. Has this resulted in any reduction in motor tax offices and their employees? The same is the case for the revenue offices.


It would really help turn this into a productive debate if you did some basic research. You have clearly no idea what actually goes on in  local authorities and Revenue. Local authorities have taken on a whole raft of new functions over the period that motor tax payments have moved online, and staff have been reallocated into new services, without increasing staffing levels. Similarly for Revenue, they took on huge increases in activity levels/tax collected in the boom years with no increases in staff. The Govt have also been reallocating Revenue staff to other more critical areas - particularly Dept Social Protection - since the crunch began.

There is of course lots of scope for further improvements, and there always will be.


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## DerKaiser

Complainer said:


> This simplistic approach of 'front-line good, back-office bad' is nonsense. There are hard-working, over-stressed, under-resourced front line and back office workers in all parts of the public sector and all parts of the private sector. There are a few lazy shysters in all parts of the public sector and all parts of the private sector. The techie guy/gal who is coding the IT systems to manage the X-ray results is just as important as the radiographer who is taking the xray, and maybe even more important in terms of bringing out real cost savings in the future.


 
Hear Hear!


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## DerKaiser

It's funny to see people winding themselves up over this.

1) Can we afford €50bn government expenditure? No

2) Is is possible to run the country for €30bn? No

3) Will we be able to borrow the €20bn difference beyond this year? No

Solution?

More tax and spending cuts.

Tax: A tax on the super rich just won't cut it. The vast proportion of people in this country consider themselves middle income and they will have to pay more. The rich will have to pay more tax and those outside the tax net will need to be brought into it.

Spending: The Croke park agreement can't cut it. We need involuntary efficiencies, redundancies _and_ pay cuts.

Any point in arguing? no

Any point in saying you've already paid your share? no

An average individual will be hit in several ways: Higher tax, maybe pay cuts, child allowance cuts, removal of tax reliefs, property tax, water charges, etc.

We're all going to be squeezed and any argument, no matter how eloquent, will not change that


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## Shawady

But nobody knows how much they are going to be squeezed!
The government are limping from budget to budget, bluffing their way through it, trying to make the easiest cuts politically speaking.
If at the start they had actually spelt out what specific actions it will take over the next 4 to 5 year, the majority of people might be able to knuckle down and get on with it.
There is so much uncertainty that even peolpe that have money are not spedning it, justifyibly in my opinion.


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## shnaek

Good post,  DerKaiser. It's how we go about this that will convince the markets whether we are worth putting money into or not.


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## shnaek

Complainer said:


> THis is nonsense. Perhaps you haven't heard of VAT - it brings in more revenue for the state than income tax, and everyone who lives here pays VAT. There are 0% of workers that 'pay no tax at all'.


My mistake, I meant the 50% of workers who pay no income tax.


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## lightswitch

@ purple

I was simply wondering if you could live on the wage you are suggesting others should be able to live on. Cutting wages results in reduced spending power in this Country. That is important to those of us who rely on domestic spending, which I would imagine is most of us.

I'm delighted your export business is going so well. It's great to hear as we need so much more of it. I personally always try to buy as much Irish produce as possible, it's not easy even leaving the cost aside the availability, aside from food, simply isn't there.


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## Purple

lightswitch said:


> @ purple
> 
> I was simply wondering if you could live on the wage you are suggesting others should be able to live on. Cutting wages results in reduced spending power in this Country. That is important to those of us who rely on domestic spending, which I would imagine is most of us.
> 
> I'm delighted your export business is going so well. It's great to hear as we need so much more of it. I personally always try to buy as much Irish produce as possible, it's not easy even leaving the cost aside the availability, aside from food, simply isn't there.


I'm not disagreeing with you.
BTW, while we are busy we have had to cut prices so we have cut costs which included pay cuts (me included) and lay-offs. That's life; we can only spend what we get in from customers in payments. Everyone who got a pay cut accepted it without much complaint. If/when things improve we will increase pay to where it was but we cannot trade at a loss.


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## Chris

Complainer said:


> It would really help turn this into a productive debate if you did some basic research. You have clearly no idea what actually goes on in  local authorities and Revenue. Local authorities have taken on a whole raft of new functions over the period that motor tax payments have moved online, and staff have been reallocated into new services, without increasing staffing levels. Similarly for Revenue, they took on huge increases in activity levels/tax collected in the boom years with no increases in staff. The Govt have also been reallocating Revenue staff to other more critical areas - particularly Dept Social Protection - since the crunch began.
> 
> There is of course lots of scope for further improvements, and there always will be.


There is still a motor tax office in every county and some have 2! This is hardly an example of making the most of improved efficiencies and making necessary resource cuts.
And it is precisely because government have constantly increased their activities rather than decrease them that the public sector became so bloated. The country is broke and it simply cannot afford lots of the unnecessary services being "provided".



Shawady said:


> There is so much uncertainty that even peolpe that have money are not spedning it, justifyibly in my opinion.


Saving doesn't mean that the saved money isn't spent. A saver allows someone else to do the spending. There would not be a net gain to the economy if people started spending their savings, as less people and organisations would be able to take out loans. This would actually cause bank's balance sheets to further deteriorate and lower credit availability (although the latter is actually positive).


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## DerKaiser

Shawady said:


> The government are limping from budget to budget, bluffing their way through it, trying to make the easiest cuts politically speaking.
> If at the start they had actually spelt out what specific actions it will take over the next 4 to 5 year, the majority of people might be able to knuckle down and get on with it.


 
The real budget deficit will be €18bn in 2010, same as 2009.

The plan as far as I understood it last year was something like knock €3bn off the annual deficit each year for 4/5 years.

Two things have changed since last year:

1) We have had to revise the annual cost of servicing our debt upwards because the bank bailout was costlier than expected and as a result, markets demand a higher premium from us to lend us money

2) The rate of expected recovery across the globe has slowed.

Both of these factors mean that the cuts will now be deeper than €3bn p.a. over the next few years.

Anyone who has listened to what's being said by government will know this.

So where specifically will the €12bn in cuts come from?

Well:

1) We don't really need to know this.  The budget occurs in december each year at which point we'll know the measures for the coming year.

2) The government are due to submit a 4 year plan to the EU in next month, so we'll have a broad outline of what will happen.

The problem is that everybody wants to know everything yesterday.  We need a little patience.  In fact, what's the point in Brian Lenihan telling us what will happen in any year other than 2011?  He'll be doing well to get the budget for 2011 through and hasn't a hope of being Finance Minister for the 2012 one.


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## Complainer

Chris said:


> There is still a motor tax office in every county and some have 2! This is hardly an example of making the most of improved efficiencies and making necessary resource cuts.
> And it is precisely because government have constantly increased their activities rather than decrease them that the public sector became so bloated. The country is broke and it simply cannot afford lots of the unnecessary services being "provided".


Again, it would help if you knew just a little bit about how Govt works. Local Authorities don't get to decide their own roles/scope/functions. These are set by legislation, so please don't beat up LAs for the expanding scope of their role.

It's easy to talk about 'bloated public sector' without being specific. You really need to start being specific about the services we can't afford. Do you want to halt the already limited inspections for building regulations? Or do want to cut back on the library service that provides a gateway to education for people with limited resources?


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## sunrock

I personally do not want to see a reduction in public services or the staff that work in them.
However as the big cost here is the wages and salaries of these staff ,I think this is where cuts need to be made. I appreciate these staff have already seen a reduction in their take home pay, but what is the alternative?


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## losttheplot

Could motor tax be included in fuel? This would eliminate the administration in LAs, cost of the online service and payment processing would be gone, Gardai / court time saved prosecuting evaders and it would be difficult to evade as every car needs fuel The more you use a car the more you pay.

Reduce child benefit but as compensation introduce a free book / uniform for every child. Most parents find these costs expensive. The state could obtain the books at a much better rate than individuals can (although I'm sure they could find a way to screw it up). This would also mean child benefit is being used for the benefit of the child and not going to people who don't need it (http://www.askaboutmoney.com/showthread.php?t=145601) or being spent on other non-child related items.

The loss in benefit for parents with pre-school / babies could be offset by reducing VAT on essential necessities (bread / milk etc). This would be needed for families who are truly in need of this benefit. A reduction in VAT for some of the basics could also make a PAYE tax increase easier to swallow. If you spend all your income you're not effected, if you have excess income then you can affored the cut.


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