# Public sector pay freeze for top 40,000 public servants announced



## BeanPole

Unfortunately this is in the UK, where they had substantial public sector reform in the early 80s:
http://news.bbc.co.uk/2/hi/uk_news/politics/8291810.stm

The problem in Ireland now is that our public sector salaries, linked to the ridiculous concept of pay increments, have resulted in a situation where a pay freeze will not be enough to either help the economy, or to introduce some equality between the public and private sectors.

Dramatic action needs to be taken by the government to eliminate overstaffing, archaic demarcation policies, jobs for life, ludicrous pay scales based on time served, ridiculous allowances that are paid even during holidays, and a pension scheme where the private sector end up guaranteeing the retirement of public sector employees. This needs to be done in addition to a minimum 20% across the board cut in salary levels.

All of these changes could be implemented without harming front line services, and would benefit the country in the longer term.

The longer we cowtow to the public sector unions, the more painful the eventual remedy will be.


----------



## RMCF

The big problem is once you give people money its hard to take it back off them.

If only the Gov had the sense over the last decade to control public salaries and increases, and try to control the number of people employed in it.

Unfortunately now its all too late, and a problem that I can't see a solution to.


----------



## bogle

BeanPole said:


> Unfortunately this is in the UK, where they had substantial public sector reform in the early 80s:
> http://news.bbc.co.uk/2/hi/uk_news/politics/8291810.stm
> 
> The problem in Ireland now is that our public sector salaries, linked to the ridiculous concept of pay increments, have resulted in a situation where a pay freeze will not be enough to either help the economy, or to introduce some equality between the public and private sectors.
> 
> Dramatic action needs to be taken by the government to eliminate overstaffing, archaic demarcation policies, jobs for life, ludicrous pay scales based on time served, ridiculous allowances that are paid even during holidays, and a pension scheme where the private sector end up guaranteeing the retirement of public sector employees. This needs to be done in addition to a minimum 20% across the board cut in salary levels.
> 
> All of these changes could be implemented without harming front line services, and would benefit the country in the longer term.
> 
> The longer we cowtow to the public sector unions, the more painful the eventual remedy will be.




*Beanie* you're not being accurate in your reporting and commenting.

Some civil and public servants in the Uk will have a pay freeze ...

    "He has written to salary review bodies calling on them to freeze the pay of judges, senior NHS managers and GPs."

while others will actually get a pay rise ...

    "In addition, about 700,000 middle-ranking public servants, including doctors, dentists and prison officers, will get a rise of between 0 and 1%."


In Ireland all civil and public servants have all ready taken a 7 to 8% pay cut.

This is somewhat different to what the title of your post implies.

A more accurate title would be "700,000 middle-ranking public servants get a 0 to 1% pay rise while 40,000 have a pay freeze"


----------



## BeanPole

Lets revert to the facts, shall we?

All Irish civil servants have not taken a pay cut. They are finally making a notional contribution to their pension costs. This is perhaps ten years late, but hey, it’s a start. It is by no means a pay cut – and despite IMPACTs and SIPTUs whining- if there is any justice, heavy pay cuts are on the way.

Much of the Irish public sector employee contribution will be more than wiped out with the pay increments over time. Pay increments have to be the most unfair and inequitable practice that I’ve ever come across. You are rewarding stagnation, not ability. The complete antithesis of a meritocracy.

Public sector pay and conditions reform, and alignment to the public sector is long overdue. Benchmarking has to work both ways, if it is to be equitable. Irish public sector wages are now overblown and need to be dramatically reduced.


----------



## Lex Foutish

BeanPole said:


> Lets revert to the facts, shall we?
> 
> All Irish civil servants have not taken a pay cut. *They a**re finally making a notional contribution to their pension costs.* This is perhaps ten years late, but hey, it’s a start. It is by no means a pay cut – and despite IMPACTs and SIPTUs whining- if there is any justice, heavy pay cuts are on the way.
> 
> Much of the Irish public sector employee contribution will be more than wiped out with the pay increments over time. Pay increments have to be the most unfair and inequitable practice that I’ve ever come across. You are rewarding stagnation, not ability. The complete antithesis of a meritocracy.
> 
> Public sector pay and conditions reform, and alignment to the public sector is long overdue. Benchmarking has to work both ways, if it is to be equitable. Irish public sector wages are now overblown and need to be dramatically reduced.


 
Revert to the facts???????????

Can you explain what you mean by the underlined above.

How can you expect to post the likes of this here and be taken seriously and not end up looking like an ignoramus? And, with Posting Guidelines in mind, I say that to you with the greatest of respect. 

If you're going to have a cut off the Public Service, please do so, like most such posters do here, by knowing the facts and by knowing what you're talking about.


----------



## BeanPole

A contribution to pension costs is not a pay cut. 

It is what it says, a contribution towards pension costs. 

I would suggest that you, sir, are the ignoramus if you cannot discern between the two simple concepts


----------



## Protocol

BeanPole said:


> Lets revert to the facts, shall we?
> 
> All Irish civil servants have not taken a pay cut. _*They a*__*re finally making a notional contribution to their pension costs. *_This is perhaps ten years late, but hey, it’s a start. It is by no means a pay cut – and despite IMPACTs and SIPTUs whining- if there is any justice, heavy pay cuts are on the way.


 
The facts are that public sector workers have *always* made pension contributions.

Not just since the pension levy was introduced.

A typical public sector worker, hired pre 1995, *pays 6.5% of salary*.  You can argue that it's too low, and I agree, but that's a different argument.

Many people and parts of the media seem to suggest that public sector workers get "free" pensions.  Incorrect, they contribute 6.5%.

If they were hired post-1995, it's more complex, but they still contribute 6.5% of an adjusted salary basis.

It is true that civil servants, hired pre-95, pay less at 1.5%.

You may see the pension levy as a *pay cut* or an *increased pension contribution*.  Same effect either way - more revenue for the Govt, lower disp income for public sector workers.


----------



## corkgal

The pension levy is a pay cut in real terms. Having to pay for something that used to be part of your package means that their employer is paying them less.


----------



## Purple

corkgal said:


> The pension levy is a pay cut in real terms. Having to pay for something that used to be part of your package means that their employer is paying them less.


 +1.
To argue otherwise is just semantics.
One thing that many people haven’t taken into account is the fact that the huge increases in the state old age pension over the last few years has reduced the real value of public sector pensions.
I don’t have a problem with public sector pensions now; even with the pension levy it’s still a very good deal  but it’s not as good as it used to be.
The problem is over staffing and pay rates that the country can’t afford. Arguments about whether they are fair or unfair etc are irrelevant. The only issue that matters at the moment is that the country can’t afford to spend what it is spending on public sector pay and has to spend a lot less. That’s the only driving force at present. It would be better if there was a more rational and structured reform of public services but due to gross governmental incompetence and the undue influence of vested interest groups over the last ten years there now simply isn’t the time.


----------



## Lex Foutish

Protocol said:


> The facts are that public sector workers have *always* made pension contributions.
> 
> Not just since the pension levy was introduced.
> 
> A typical public sector worker, hired pre 1995, *pays 6.5% of salary*. You can argue that it's too low, and I agree, but that's a different argument.
> 
> Many people and parts of the media seem to suggest that public sector workers get "free" pensions. Incorrect, they contribute 6.5%.
> 
> If they were hired post-1995, it's more complex, but they still contribute 6.5% of an adjusted salary basis.
> 
> It is true that civil servants, hired pre-95, pay less at 1.5%.
> 
> You may see the pension levy as a *pay cut* or an *increased pension contribution*. Same effect either way - more revenue for the Govt, lower disp income for public sector workers.


 
Thanks, Protocol.

I couldn't have put it better myself!


----------



## Pique318

It also means that something which was worth a lot was only contributed towards in a minute amount. 
Now it's being contributed towards more, but still not completely, or even closely to what a private pension fund would require to provide the same end product.


Basically, it's a case of "Well we had it sweet for long enough, we can't really complain, can we?"


----------



## Protocol

Purple said:


> +1.
> One thing that many people haven’t taken into account is the fact that the huge increases in the state old age pension over the last few years has reduced the real value of public sector pensions.


 
Perhaps, but that is not really relevant for pre-1995 workers who mostly will not get a state pension.


----------



## Protocol

Pique318 said:


> It also means that something which was worth a lot was only contributed towards in a minute amount.
> 
> *I wouldn't call 6.5% of wages "minute".*
> 
> Now it's being contributed towards more, but still not completely, or even closely to what a private pension fund would require to provide the same end product.
> 
> *Yes, the true cost is higher, maybe 20-25-30% of wages.*
> 
> *Yes, public sector workers should pay more for their pensions.*
> 
> *Indeed, we ALL need to save more for our futures.*


----------



## Caveat

I don't want to labour the point but don't forget too that the terms/conditions of PS/CS pension are much more attractive than the typical private sector equivalent.


----------



## csirl

Caveat said:


> I don't want to labour the point but don't forget too that the terms/conditions of PS/CS pension are much more attractive than the typical private sector equivalent.


 
Having worked in both the private and public sectors (worked for a Gov Dept c. 7-8 years ago), this is not my experience. Private sector pension terms and conditions I've received have always been better in the public sector - usually lower or similar employee contributions and usually aimed at receiving a higher percentage of pay on retirement. Most private sector employers make much higher contributions to the companies pension scheme than the employees.

In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.

Public sector employee, with pension levy, now contributes 15-20% of salary and receives 50% of final salary INCLUDING SW pension.

Absolutely no comparison - I know which pension I'd rather have.


----------



## Pique318

csirl said:


> In my experience, typical private sector employee pays 5-10% of salary and *POTENTIALLY *receives 50-75% of final salary EXCLUDING SW pension.
> 
> Public sector employee, with pension levy, now contributes 15-20% of salary and *DEFINITELY *receives 50% of final salary INCLUDING SW pension.
> 
> Absolutely no comparison - I know which pension I'd rather have.



You left out 2 very important words, I've added them for you out of the goodness of my heart. No thanks needed.


----------



## Purple

csirl said:


> In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.



Can we have the name of the guy who manages that pension fund... pretty please?


----------



## Sunny

csirl said:


> In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.


 
Where is the research showing this is the typical private sector worker? Especially considering half the workforce don't have any pension in place.


----------



## csirl

Purple said:


> Can we have the name of the guy who manages that pension fund... pretty please?


 
Its not a fund - its occupational pension scheme. I actually had this with a major multinational in the not to distant past - multinational is still here, still operating these terms and conditions for all employees. This is a major company with 1,000s of employees in Ireland.

As I said earlier, the employers contribution exceeds the employees - in this particular case the employers was approx. twice the employees plus the employer also put a % of profits in the pension fund. This is a publically listed company and the terms and conditions were the industry norm - this company was not regarded as having generous terms and conditions. 

Occupational pensions that people automatically get through their employment are NOT the same a pensions you purchase from an investment company off your own bat. Most occupational pension have some guarantees in them. And, as we've seen from time to time, if there is a deficit in the occupational pension scheme, the shareholders pay through reduced dividends when the company has to top up the scheme.


----------



## peelaaa

csirl said:


> Having worked in both the private and public sectors (worked for a Gov Dept c. 7-8 years ago), this is not my experience. Private sector pension terms and conditions I've received have always been better in the public sector - usually lower or similar employee contributions and usually aimed at receiving a higher percentage of pay on retirement. Most private sector employers make much higher contributions to the companies pension scheme than the employees.
> 
> In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.
> 
> Public sector employee, with pension levy, now contributes 15-20% of salary and receives 50% of final salary INCLUDING SW pension.
> 
> Absolutely no comparison - I know which pension I'd rather have.


 
50-75%, its a  joke, yeah.


----------



## Sunny

csirl said:


> Its not a fund - its occupational pension scheme. I actually had this with a major multinational in the not to distant past - multinational is still here, still operating these terms and conditions for all employees. This is a major company with 1,000s of employees in Ireland.
> 
> As I said earlier, the employers contribution exceeds the employees - in this particular case the employers was approx. twice the employees plus the employer also put a % of profits in the pension fund. This is a publically listed company and the terms and conditions were the industry norm - this company was not regarded as having generous terms and conditions.
> 
> Occupational pensions that people automatically get through their employment are NOT the same a pensions you purchase from an investment company off your own bat. Most occupational pension have some guarantees in them. And, as we've seen from time to time, if there is a deficit in the occupational pension scheme, the shareholders pay through reduced dividends when the company has to top up the scheme.


 
Again just because you have had decent experiences doesn't mean the represents the private sector as a whole. As I pointed out around 50% of the private sector do not have pensions. Also to say that most occupational pensions have guarantees in them is simply untrue. Most private sector pensions are defined contribution schemes so are dependent on investment returns to ensure a decent pension. Most defined benefit schemes out there are closed to new members and are running up huge deficits. There is no legal obligation on a company having having to fund any deficit either so that is another risk that private sector employees have to take on.


----------



## csirl

Sunny said:


> Again just because you have had decent experiences doesn't mean the represents the private sector as a whole. As I pointed out around 50% of the private sector do not have pensions. Also to say that most occupational pensions have guarantees in them is simply untrue. Most private sector pensions are defined contribution schemes so are dependent on investment returns to ensure a decent pension. Most defined benefit schemes out there are closed to new members and are running up huge deficits. There is no legal obligation on a company having having to fund any deficit either so that is another risk that private sector employees have to take on.


 
I agree with you on some points. But you cannot use the argument that some employers neglect to put in place proper occupational pension arrangements for their employees as a reason to cut out pensions for other employees. Yes, this is a problem, but is better addressed by encouraging all employers to put provisions in place. 

I hate the way people are still focused on how much money will be lopped off all public servants wages - suggesting set % to apply to all. This is shortsighted and doesnt address the problem. People who are doing a good job should be paid what they are worth and surplus employees should be got rid off. The same % should not apply to all.

In my job, everyone was given a c.10% pay cut due to the recession. I think my employer made a big mistake in doing this. The area I work in is due to break all records this year and people have being working very hard over the past couple of years to get to this stage. There are other areas that are generating poor results. So the people who broke all records and put in loads of extra hours have been rewarded with a pay cut - the same pay cut as less productive staff. This has had a big impact on some of my colleagues. I cant see them repeating their 2009 performance next year, whats the point? The mindset of many is "I'll stick it out here until the upswing comes, but I'm out the door as soon as someone else offers me something half decent - I've been treated poorly here". 

I would imagine that public sector workers will react in the same way and I've heard some grumbles already from some friends and relatives in the public sector along the lines of ".....I'm taking a pay cut to keep some unproductive waster in X in a job etc.....". I think that an across the board cut will result in productive areas of the public sector becoming unproductive through poor morale among staff and ultimately because the good staff will walk as soon as their is an upswing.


----------



## Sunny

csirl said:


> I agree with you on some points. But you cannot use the argument that some employers neglect to put in place proper occupational pension arrangements for their employees as a reason to cut out pensions for other employees. Yes, this is a problem, but is better addressed by encouraging all employers to put provisions in place.


 
I am not arguing that employees should have their pension entitlements cut. I would love everyone to have the same pension entitlement that exists in the public sector. However the public sector pension scheme is running a €100 billion plus deficit and it operates to some sort of Alice in Wonderland economics.

I have no problem agreeing to a complete overhaul of public and private sector pensions to create a level playing field for everyone. However, I think every sane person in the Country recognises that if there is no way the same terms could be offered to every private sector employee.


----------



## orka

csirl said:


> In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.


Was this in Ireland?  I think there are revenue limits on how much pension can be provided - and I think the maximum allowable is two-thirds of final salary.  What sort of company was it that provided the 75% pension?


----------



## DerKaiser

orka said:


> Was this in Ireland? I think there are revenue limits on how much pension can be provided - and I think the maximum allowable is two-thirds of final salary. What sort of company was it that provided the 75% pension?


 
Yeah, the revenue limits would be 2/3 less SW. 75% with no SW deduction would seem strange.

Also, a 'typical private sector employee' does not have a pension, let alone a DB pension. 

According to the pensions green paper at 31/12/2006 less than 800,000 of the 2,100,000 workers in this country had any form of pension.

It's very hard to have a reasoned debate on appropriate levels of pay and benefits when you spend most of the time trying to simply convey the correct facts


----------



## DerKaiser

csirl said:


> Most occupational pension have some guarantees in them. And, as we've seen from time to time, if there is a deficit in the occupational pension scheme, the shareholders pay through reduced dividends when the company has to top up the scheme.


 
I think the more common scenario these days (in companies that actually offer DB pensions to their employees) is for the pension scheme to be wound down by first closing off to new entrants and then reducing or ceasing accruals to existing employees.


----------



## Deiseblue

Purple said:


> Can we have the name of the guy who manages that pension fund... pretty please?


Glad to help , in the case of AIB it's AIB investment Managers and in the case of Bank of Ireland it's BIAM.
3/4 of final salary on retirement plus OAP at age 65 .


----------



## DerKaiser

Deiseblue said:


> Glad to help , in the case of AIB it's AIB investment Managers and in the case of Bank of Ireland it's BIAM.
> 3/4 of final salary on retirement plus OAP at age 65 .


 
AIB DB scheme has been closed to new entrants since 1996?

Based on revenue pension limits, I'm still very sceptical of 3/4 of final salary plus OAP but I guess we'll have to take your word for it if nobody else has the facts


----------



## Sunny

Neither AIB or BOI offer defined benefit schemes anymore. Both are hybrid schemes and yes both are still very generous to employees. Its not 3/4 of final salary. It's 2/3's (max as set down by revenue I think) and this is based on retiring on 65 after 45 years service (in the case of BOI anyway). Also these pension payouts have to be linked to inflation unlike public sector ones. BOI's scheme is running a deficit of over €1 billion and both banks reserve the right to change the terms of the pension if they want. As I say they are bloody good schemes but they do not represent whats available in the private sector as a whole and there are still major risks for employees. Look at how many people wanted the banks to be allowed fail during the current crisis. It would have been Waterford Crystal on a much larger scale.


----------



## Deiseblue

DerKaiser said:


> AIB DB scheme has been closed to new entrants since 1996?
> 
> Based on revenue pension limits, I'm still very sceptical of 3/4 of final salary plus OAP but I guess we'll have to take your word for it if nobody else has the facts


You are right , got a bit carried away - it's two thirds of final salary.
AIB and Bank of Ireland now operate hybrid schemes , in Bank of Ireland new entrants since 2008 are in the hybrid scheme - anyone employed prior to that will get the full pension on retirement plus the OAP.
In AIB anyone employed prior to 1996 will get the full pension plus the OAP.
Entry level people in BOI will make a 2.5%  mandatory contribution  to a DB scheme which aims to deliver a pension of between 45% and 50 % of their final salary and can make a voluntary contribution of 3% of their salary to DC fund which should ultimately provide a 66% pension , I would presume that the AIB scheme works on the similar basis !
Those in BOI that signed up for voluntary DC contributions received a 3% salary hike plus DC top ups from the Bank of 2% for first 2 years and 1% for the third.
Everyone is entitled to OAP no matter what scheme they are in


----------



## Firefly

csirl said:


> I would imagine that public sector workers will react in the same way and I've heard some grumbles already from some friends and relatives in the public sector along the lines of ".....I'm taking a pay cut to keep some unproductive waster in X in a job etc.....".


 
Maybe those "performing" workers should have opposed across-the-board increases under benchmarking?


----------



## Deiseblue

Sunny said:


> Neither AIB or BOI offer defined benefit schemes anymore. Both are hybrid schemes and yes both are still very generous to employees. Its not 3/4 of final salary. It's 2/3's (max as set down by revenue I think) and this is based on retiring on 65 after 45 years service (in the case of BOI anyway). Also these pension payouts have to be linked to inflation unlike public sector ones. BOI's scheme is running a deficit of over €1 billion and both banks reserve the right to change the terms of the pension if they want. As I say they are bloody good schemes but they do not represent whats available in the private sector as a whole and there are still major risks for employees. Look at how many people wanted the banks to be allowed fail during the current crisis. It would have been Waterford Crystal on a much larger scale.


My last post crossed with yours.
The Banks can only change terms and condtions with the agreement of the IBOA , obviously that would include changes to the pension schemes.
I appreciate that such pensions do not represent whats generally available in the Private Sector however there are a large number of firms with comparable schemes.
The maximum employee contribution to the BOI hybrid scheme is 5.5% with the mandatory contribution being a mere 2.5% - what are public sector workers currently contributing , am I right in thinking it's approx 14% ?


----------



## Purple

Deiseblue said:


> My last post crossed with yours.
> The Banks can only change terms and condtions with the agreement of the IBOA , obviously that would include changes to the pension schemes.
> I appreciate that such pensions do not represent whats available in the Private Sector however there are a large number of firms with comparable schemes.
> The maximum employee contribution to the BOI hybrid scheme is 5.5% with the mandatory contribution being a mere 2.5% - what are public sector workers currently contributing , am I right in thinking it's approx 14% ?



Banks are protected sector companies (regulated with huge barriers to entry). They do not operate in a proper open market and cannot be compared to most of the private sector. Even with their special status they cannot afford to pay DB pensions.


----------



## Purple

Deiseblue said:


> Glad to help , in the case of AIB it's AIB investment Managers and in the case of Bank of Ireland it's BIAM.
> 3/4 of final salary on retirement plus OAP at age 65 .



Do you now accept that this is not the case?


----------



## Shawady

Isn't this part of the problem with comparing the Public and Private sector - That within the private sector itself there are (1) companies such as banks/large multi-nationals/ semi-state companie that enjoy similar benefits to the public sector and (2)  a large number of smaller companies that do not provide benefits such as pension schemes, most probably because they could never afford it.
People working for companies that have been represented at the social partnership talks have got the pay increases but those employed in the SME sector have not got these increases as this sector has not been represented. Am I right in saying SMEs were not represented at the partnership talks?


----------



## Purple

Shawady said:


> Isn't this part of the problem with comparing the Public and Private sector - That within the private sector itself there are (1) companies such as banks/large multi-nationals/ semi-state companie that enjoy similar benefits to the public sector and (2)  a large number of smaller companies that do not provide benefits such as pension schemes, most probably because they could never afford it.
> People working for companies that have been represented at the social partnership talks have got the pay increases but those employed in the SME sector have not got these increases as this sector has not been represented. Am I right in saying SMEs were not represented at the partnership talks?



Yes on all counts (it should be noted that the semi-states are not private sector but with the banks make up the bulk of the active IBEC members. IBEC is affiliated to the ICTU)


----------



## Latrade

Shawady said:


> Isn't this part of the problem with comparing the Public and Private sector - That within the private sector itself there are (1) companies such as banks/large multi-nationals/ semi-state companie that enjoy similar benefits to the public sector and (2) a large number of smaller companies that do not provide benefits such as pension schemes, most probably because they could never afford it.
> People working for companies that have been represented at the social partnership talks have got the pay increases but those employed in the SME sector have not got these increases as this sector has not been represented. Am I right in saying SMEs were not represented at the partnership talks?


 


Purple said:


> Yes on all counts (it should be noted that the semi-states are not private sector but with the banks make up the bulk of the active IBEC members. IBEC is affiliated to the ICTU)


 
It may be the case in Shane Ross' head, but not actually the case. It's not just SMEs who couldn't afford the last wage deal, retail, hotels, etc, manufacturing. All represented and all unable to provide the benefits outlined.

I'd be interested to know the reason why IBEC is affiliated to ICTU.


----------



## Shawady

Purple said:


> Yes on all counts (it should be noted that the semi-states are not private sector but with the banks make up the bulk of the active IBEC members. IBEC is affiliated to the ICTU)


 
Getting off topic but were the american multi-nationals such as Intel or Wyeth part of the partnership arrangement, does anyone know?


----------



## Purple

Latrade said:


> I'd be interested to know the reason why IBEC is affiliated to ICTU.


 They are a union, that's why.



Shawady said:


> Getting off topic but were the american multi-nationals such as Intel or Wyeth part of the partnership arrangement, does anyone know?


 They join as a PR exercise when they get their grants but really have bugger all input after that.


----------



## Latrade

Shawady said:


> Getting off topic but were the american multi-nationals such as Intel or Wyeth part of the partnership arrangement, does anyone know?


 
Not individually. Social partnership is through various representative bodies such as ICTU and IBEC.


----------



## Latrade

Purple said:


> They are a union, that's why.


 
Partly a union (the old FUE side), but it doesn't mean they're part of ICTU.


----------



## Deiseblue

Purple said:


> Do you now accept that this is not the case?


I certainly accept that I was wrong.
Bank of Ireland employees pre 2008 can expect to retire on two thirds of their final salary ( not three quarters as I initially stated ) plus they can avail of the OAP based on contributions of 2.5% of their salary.
AIB employees pre 1996 have the same entitlements.
Gold plated or what ?
All for contributions of 2.5% of salary.
Really puts the Public Sector pensions in the shade.


----------



## Latrade

Deiseblue said:


> I certainly accept that I was wrong.
> Bank of Ireland employees pre 2008 can expect to retire on two thirds of their final salary ( not three quarters as I initially stated ) plus they can avail of the OAP based on contributions of 2.5% of their salary.
> AIB employees pre 1996 have the same entitlements.
> Gold plated or what ?
> All for contributions of 2.5% of salary.
> Really puts the Public Sector pensions in the shade.


 
I suppose a key difference is that where these employers spotted a propblem with the pension system they changed their conditions. However, this has not happened for the PS.

In addition, for many on DB schemes their employers have had to increase contributions from employees (their own private pension levy) just to make it viable.


----------



## Deiseblue

Latrade said:


> I suppose a key difference is that where these employers spotted a propblem with the pension system they changed their conditions. However, this has not happened for the PS.
> 
> In addition, for many on DB schemes their employers have had to increase contributions from employees (their own private pension levy) just to make it viable.


As I pointed out that maximum employee contribution to the BOI hybrid DB/DC scheme is 5.5 % which is actuarially calculated to provide a pension of 66% of final salary.


----------



## liaconn

BeanPole said:


> Unfortunately this is in the UK, where they had substantial public sector reform in the early 80s:
> http://news.bbc.co.uk/2/hi/uk_news/politics/8291810.stm
> 
> This needs to be done in addition to a minimum 20% across the board cut in salary levels.



Beanpole

You keep banging on about a 20% pay cut across the board but, when asked, refuse to explain how you came up with this figure. For instance why the same percentage across the board? Why 20%? Is this in addition to the cuts we have already taken? (and yes, the pension levy is a 'cut'!).

Its just really hard to take your posts seriously when you just bang out statements with no analysis or explanation.


----------



## Caveat

liaconn said:


> and yes, the pension levy is a 'cut'!).


 
Yes, it is a reduction in take home pay and amounts to a 'cut' in that respect.  But it is both irritating and disingenuous IMO when people specifically refer to this as a 'pay cut' - and I'm not getting at you Liaconn.

If due to a change in policy or circumstances with my pension I had to contribute more per month (or my employer contributed less - whatever) 
I could never genuinely say that I had been subjected to a 'pay cut' and expect to be taken seriously.


----------



## Bill Struth

liaconn said:


> Its just really hard to take your posts seriously when you just bang out statements with no analysis or explanation.


He's an angry man isn't he?


----------



## csirl

> If due to a change in policy or circumstances with my pension I had to contribute more per month (or my employer contributed less - whatever)


 
The difference is that whatever money you put in your pension fund is ring fenced for your benefit. The pension levy goes into the the general exchequer to pay for stuff like John O'Donoghues travel expenses.


----------



## Caveat

Not the issue though - very little you me or anyone can do about that.

If it concerns anyone that much I assume there is some way they can opt out and make their own (generally far more costly and less attractive) pension arrangements like nearly everyone outside of the CS/PS?  

Princples eh?  They tend to be expensive.


----------



## csirl

Caveat said:


> Not the issue though - very little you me or anyone can do about that.
> 
> If it concerns anyone that much I assume there is some way they can opt out and make their own (generally far more costly and less attractive) pension arrangements like nearly everyone outside of the CS/PS?
> 
> Princples eh? They tend to be expensive.


 
 Thats the problem - there is no opt out. As I've said earlier, if there was, I'd advise my wife to opt out as acturially speaking, she will never get the full value of her contributions.


----------



## DerKaiser

csirl said:


> Thats the problem - there is no opt out. As I've said earlier, if there was, I'd advise my wife to opt out as acturially speaking, she will never get the full value of her contributions.


 
Have you had advice from an actuary to that effect?


----------



## zxcvbnm

Caveat said:


> Yes, it is a reduction in take home pay and amounts to a 'cut' in that respect.  But it is both irritating and disingenuous IMO when people specifically refer to this as a 'pay cut' - and I'm not getting at you Liaconn.
> 
> If due to a change in policy or circumstances with my pension I had to contribute more per month (or my employer contributed less - whatever)
> I could never genuinely say that I had been subjected to a 'pay cut' and expect to be taken seriously.


----------



## Protocol

*Doesn't get full value for conts?????*


Work for 40 yrs, pay 6.5% pa = 260% of salary.

Get 150% of salary as a lump-sum at retirement.

Get 50% pa pension.

After 2 yrs = 150 + 50 + 50 = 250%.

*Payback*.

What I mean is that PS pensions are so good that you may have received back all your conts within 3yrs of retirement, and the following 30 yrs pension is taxpayer subsidised.


----------



## Deiseblue

Protocol said:


> *Doesn't get full value for conts?????*
> 
> 
> Work for 40 yrs, pay 6.5% pa = 260% of salary.
> 
> Get 150% of salary as a lump-sum at retirement.
> 
> Get 50% pa pension.
> 
> After 2 yrs = 150 + 50 + 50 = 250%.
> 
> *Payback*.
> 
> What I mean is that PS pensions are so good that you may have received back all your conts within 3yrs of retirement, and the following 30 yrs pension is taxpayer subsidised.


At the current time Public Sector workers are paying 14% pa towards their pensions not 6.5%.
As pointed out in my previous posts PS pensions are dwarfed by the gold plated pensions enjoyed by Bankers for substantially less contributions.


----------



## Caveat

Deiseblue said:


> As pointed out in my previous posts PS pensions are dwarfed by the gold plated pensions enjoyed by Bankers for substantially less contributions.


 
..and you are the only one making this comparison which is far from typical or realistic.

The simple fact is that the average private sector worker, on an average salary makes a much higher contribution to their pension and gets much less for it than the equivalent public sector worker and their pension.

Are you saying this is incorrect?


----------



## DerKaiser

Deiseblue said:


> At the current time Public Sector workers are paying 14% pa towards their pensions not 6.5%.
> As pointed out in my previous posts PS pensions are dwarfed by the gold plated pensions enjoyed by Bankers for substantially less contributions.


 
Nice one, throw in bankers to distract the situation.

There are a small minority of workers in the private sector whose initial pensions on retirement exceed those enjoyed by the majority of public servants.  I have come across no private sector employees whose pensions are incremented in line with the salaries of those in their old position.

In any case the minority of private pensions are funded by the shareholders of these companies (except for cases like Anglo where the government has foolishly stepped in, but that is beside the point).

Your previous posts have had glaring factual inaccuracies in an effort to distort the true picture.

As a nation of tax payers the impact on our pockets of excessively generous public sector pensions that are linked to salary inflation DWARFS any envy that might exist towards a small number of privately funded pension schemes


----------



## Deiseblue

Caveat said:


> ..and you are the only one making this comparison which is far from typical or realistic.
> 
> The simple fact is that the average private sector worker, on an average salary makes a much higher contribution to their pension and gets much less for it than the equivalent public sector worker and their pension.
> 
> Are you saying this is incorrect?


I am merely pointing out that by far the best pensions are enjoyed by a significant number of employees in the Private Sector , more than 40,000 people work in the Irish Banking Sector and as I've said a large number of firms have comparable pension schemes .
We really have to get away from this idea that the Public Sector provides the best pensions for the least amount of employee contributions when this is quite obviously not the case.


----------



## csirl

> There are a small minority of workers in the private sector whose initial pensions on retirement exceed those enjoyed by the majority of public servants.


 
What about the large multinationals? Their pension schemes are more generous than the public servants.

So now we have:

Banking/Insurance industry
Semi-State organisations
Large Mulitnationals

All with more generous pensions..........this is a very high proportion of the private sector work force.


----------



## DerKaiser

csirl said:


> What about the large multinationals? Their pension schemes are more generous than the public servants.
> 
> So now we have:
> 
> Banking/Insurance industry
> Semi-State organisations
> Large Mulitnationals
> 
> All with more generous pensions..........this is a very high proportion of the private sector work force.


 
No it is not. There are less than 600,000 employees of DB schemes in ireland. I'd guess 300,000, or almost half, of these are in the public service.

So perhaps 300,000 out of 1.6 million private sector workers have DB pensions.

I don't even know why I'm quoting this again because you have been heavily involved in previous threads where I've provided these figures.

Bottom line is that yes about 20% of private sector workers could consider themselves to have pensions in line with what's payable in the public service.

The 600,000 people with DB pensions should all consider themselves very well looked after compared to the 1.2 million workers with no pensions


----------



## Purple

It should also be noted that most people working in the big retail banks are paid far less than the bulk of the public sector.


----------



## csirl

> Bottom line is that yes about 20% of private sector workers could consider themselves to have pensions in line with what's payable in the public service.


 
Do you know what percentage of full time permanent PAYE workers have these pensions?

Remember that a large percentage of the work force are either self employed (and so responsible for their own pensions) or temporary part time workers. We should be comparing like with like.


----------



## orka

Why are we even having this discussion? If private sector workers are getting DB pensions, it is because their employers can afford them. Bottom line is Ireland as an employer of public sector workers cannot afford gold-plated pensions for its employees - and certainly not at the expense of taxing those who may have lesser pensions and/or are seeing a reduction in their employer's ability to keep their pension scheme going.

Bravo on the obfuscation once again though.


----------



## Deiseblue

DerKaiser said:


> Nice one, throw in bankers to distract the situation.
> 
> There are a small minority of workers in the private sector whose initial pensions on retirement exceed those enjoyed by the majority of public servants. I have come across no private sector employees whose pensions are incremented in line with the salaries of those in their old position.
> 
> In any case the minority of private pensions are funded by the shareholders of these companies (except for cases like Anglo where the government has foolishly stepped in, but that is beside the point).
> 
> Your previous posts have had glaring factual inaccuracies in an effort to distort the true picture.
> 
> As a nation of tax payers the impact on our pockets of excessively generous public sector pensions that are linked to salary inflation DWARFS any envy that might exist towards a small number of privately funded pension schemes


"Glaring factual inaccuracies "
I immediately admitted to being wrong about bankers receiving 3/4 of their final salary on retirement , it's actually 2/3 rds - a mistake on my part, not an effort to distort the picture.
Care to point out any other inaccuracies in my previous posts ?


----------



## DerKaiser

csirl said:


> Do you know what percentage of full time permanent PAYE workers have these pensions?
> 
> Remember that a large percentage of the work force are either self employed (and so responsible for their own pensions) or temporary part time workers. We should be comparing like with like.


 
Have a read through these and you might find out more:



Page 7 & 8 of

http://www.finance.gov.ie/documents/pressreleases/2009/bl100vol1.pdf


----------



## DerKaiser

Deiseblue said:


> "Glaring factual inaccuracies "
> I immediately admitted to being wrong about bankers receiving 3/4 of their final salary on retirement , it's actually 2/3 rds - a mistake on my part, not an effort to distort the picture.
> Care to point out any other inaccuracies in my previous posts ?


 
Yeah, it's quite inaccurate to say that a 2/3rds pension linked to CPI is by far better than a 50% pension linked to salary inflation


----------



## DerKaiser

orka said:


> Bravo on the obfuscation once again though.


 
Absolutely correct.  I find myself making the same points to the same people on this subject.

If these costly pensions are not appreciated (and they are not because most people have no comprehension of future demographics) then they should be replaced with something less costly that will be appreciated more


----------



## Purple

orka said:


> Why are we even having this discussion? If private sector workers are getting DB pensions, it is because their employers can afford them. Bottom line is Ireland as an employer of public sector workers cannot afford gold-plated pensions for its employees - and certainly not at the expense of taxing those who may have lesser pensions and/or are seeing a reduction in their employer's ability to keep their pension scheme going.



Very good point!


----------



## Caveat

I think for the benefit of some of the 'sentinels of the service' it's worth quoting some of DerKaiser's link though:

"Public servants are generally entitled to retire on a full Defined Benefit pension (calculated at half of the average annual salary over the final three years of service), after 40 years’ service, together with a lump sum of up to one-and-a-half times the final salary. Employees may retire after reaching the age of 60 (the compulsory retirement age is 65), with​_pro rata _reductions for those with fewer than 40 years’ service, although those retiring between the ages of 50 and 60 incur an ‘actuarial reduction’ to reflect the longer retirement period. (The key benefit of the recently-introduce_Incentivised Scheme for Early Retirement _is that it eliminates the actuarial reduction for this age group.) 

*After retirement, it has been the practice to index pension rates in line with earnings, which **carries a very high actuarial cost and is not generally available in the private sector.*
 
In addition to the basic public service pension system, the Group notes the existence of a range ofaccelerated / ‘added years’ arrangements across various areas of the public service. These accelerated arrangements are more costly to the Exchequer, and their existence and budgetary implications do not appear to be widely known or appreciated by the general public. For example,Gardaí are free to retire on full pension at the age of 50 (an effective 10 years’ added service on the assumption of an entry age of 20); some engineers, who might enter the public service at the age of 35, would accrue full pension entitlements at age 65 (again an effective 10 added years); teachers with 35 years service are eligible to retire from age 55 on; some hospital consultants may be entitled to up to 10 added years of service; and a High Court judge, who might typically be appointed to the bench at 50 years of age, is entitled to full pension at age 65 (an effective 25 added years). Accelerated accrual terms also apply in certain top-level public sector posts although it must be said similar pension arrangements at these levels can apply in the private sector.

*Given the above arrangements, the Group observes that the annual cost of purchasing similar **pension arrangements (including the earnings-linking of pension benefits) in the private sector **would be very high indeed: ranging from around 27% of annual salary in the case of a typical civil **servant employed prior to 2004 to 31% for a teacher entitled to retire at age 55; 33% for a hospital **consultant; 48% in the case of a Garda member; and as high as 87% of annual salary in the case of **a High Court judge. The cost of providing similar benefits in a Defined Contribution arrangement, **which is more generally applicable in the private sector, would be significantly higher in all cases. "*​


----------



## csirl

> *Given the above arrangements, the Group observes that the annual cost of purchasing similar pension arrangements (including the earnings-linking of pension benefits) in the private sector would be very high indeed: ranging from around 27% of annual salary in the case of a typical civil servant employed prior to 2004 to 31% for a teacher entitled to retire at age 55; 33% for a hospital consultant; 48% in the case of a Garda member; and as high as 87% of annual salary in the case of a High Court judge. The cost of providing similar benefits in a Defined Contribution arrangement, which is more generally applicable in the private sector, would be significantly higher in all cases. "*


 
Good to see an official report agrees with some of my figures. 

PS salaries are inclusive of SW. This report is saying that a civil servants salary needs a 27% contribution, a teachers 31 % etc.

Lets look at what they contribute inclusive of SW:

Pension contribution: 6.5%
Pension Levy: 7.5%
Employee PRSI: 6%
Employer PRSI: 10:75%
TOTAL: 30.75%

So this report is essentially saying that the full cost of most public service pensions IS covered by the contributions that are currently being made to the "funds" that pay the pension.

Most private sector pensions include an employers contribution (in addition to the employers PRSI contribution). If you were to include a notional employers contribution of similar percentage to the average private sector pension, then the Government is actually profiting from PS pensions. 

I know people are going to bring up the PRSI argument, but you cant have it both ways. PS pensions include PRSI benefits full stop, so you have to include a public servant's PRSI contribution towards this portion of the pension in any calculations.


----------



## Sunny

csirl said:


> Good to see an official report agrees with some of my figures.
> 
> PS salaries are inclusive of SW. This report is saying that a civil servants salary needs a 27% contribution, a teachers 31 % etc.
> 
> Lets look at what they contribute inclusive of SW:
> 
> Pension contribution: 6.5%
> Pension Levy: 7.5%
> Employee PRSI: 6%
> Employer PRSI: 10:75%
> TOTAL: 30.75%
> 
> So this report is essentially saying that the full cost of most public service pensions IS covered by the contributions that are currently being made to the "funds" that pay the pension.
> 
> Most private sector pensions include an employers contribution (in addition to the employers PRSI contribution). If you were to include a notional employers contribution of similar percentage to the average private sector pension, then the Government is actually profiting from PS pensions.
> 
> I know people are going to bring up the PRSI argument, but you cant have it both ways. PS pensions include PRSI benefits full stop, so you have to include a public servant's PRSI contribution towards this portion of the pension in any calculations.


 
So you are basically arguing that public sector pensions are pretty much fully funded? Even if you were to ringfence the pension contributions and pension levy (I am not including the PRSI) into a pension fund and then looked at the liabilities of the public sector pension fund. What do you think you would see?


----------



## Caveat

csirl said:


> Good to see an official report agrees with some of my figures.


 
Wait a minute - unless I've completely misunderstood, is the report not saying that *if *the same level of pension/benefits *were to be purchased in the private sector this is what it would cost these people?*


----------



## csirl

> So you are basically arguing that public sector pensions are pretty much fully funded? Even if you were to ringfence the pension contributions and pension levy (I am not including the PRSI) into a pension fund and then looked at the liabilities of the public sector pension fund. What do you think you would see?


 
Yes, I've been advocating this approach on this forum for months now. The Public Service should have a ring fenced pension fund that is self funding. I am a firm believer in everyone being responsible for providing for themselves.

I once asked a pensions expert from the public service why this isnt done. The answer he gave me is because the Government is using todays employees pension contribution to pay the pensions of employees of previous generations i.e. todays pensioners. If the Government were to place the contributions in a ring fenced pension fund, then they would not have the money to pay todays pensioners. He did admit that this is storing up a huge problem for the future in that there is no money being put aside for current employees pensions, but Government never think beyond the next election, so they dont really care - problem will be someone elses in the future. Having a ring fenced pension fund would also raise the issue of an employers contribution which would cost even more money.

The Government is quite happy to see the current public service pension bashing going on in the media and has made no effort to correct the mis conceptions being spread (media usually conveniently omit that public service pensions are coordinated with SW and inclusive of SW and when comparing with private sector usually use a SW inclusive pension (i.e. "50%") for public servants and SW exclusive for private sector workers). Public servants are a convenient target for raising money in a recession. They are generally placid and conforming. While they may grumble or go on the odd 1 day strike, they will never bring the country to a standstill in the way that farmers, taxi drivers etc. would if face with similar cuts.


----------



## DerKaiser

csirl said:


> Good to see an official report agrees with some of my figures.
> 
> PS salaries are inclusive of SW. This report is saying that a civil servants salary needs a 27% contribution, a teachers 31 % etc.
> 
> Lets look at what they contribute inclusive of SW:
> 
> Pension contribution: 6.5%
> Pension Levy: 7.5%
> Employee PRSI: 6%
> Employer PRSI: 10:75%
> TOTAL: 30.75%
> 
> So this report is essentially saying that the full cost of most public service pensions IS covered by the contributions that are currently being made to the "funds" that pay the pension.
> 
> Most private sector pensions include an employers contribution (in addition to the employers PRSI contribution). If you were to include a notional employers contribution of similar percentage to the average private sector pension, then the Government is actually profiting from PS pensions.
> 
> I know people are going to bring up the PRSI argument, but you cant have it both ways. PS pensions include PRSI benefits full stop, so you have to include a public servant's PRSI contribution towards this portion of the pension in any calculations.


 


As was stated before you shouldn't include PRSI as all PAYE employees pay this. So you should probably compare the 14% to the amount of pension in excess of the OAP.

That said it is a bit pointless to focus in on pensions without looking at the entire remuneration package, the bigger questions are:

1 What can we afford to pay
2 What should we pay

In respect of point 2 I'd suggest an objective analysis against the remuneration packages in other countries.

An alternative would be a benchmarking process where job security, the true economic value of pension entitlements, qualifications, level of responsibility and hours worked are taken account of in an unbiased manner.


----------



## orka

csirl said:


> Lets look at what they contribute inclusive of SW:
> 
> Pension contribution: 6.5%
> Pension Levy: 7.5%
> Employee PRSI: 6%
> Employer PRSI: 10:75%
> TOTAL: 30.75%


If the government switched to a DC scheme for public sector (please make it so...), public sector will still pay PRSI so only potentially the levy and the actual contribution could be 'ringfenced'.



csirl said:


> (media usually conveniently omit that public service pensions are coordinated with SW and inclusive of SW and when comparing with private sector usually use a SW inclusive pension (i.e. "50%") for public servants and SW exclusive for private sector workers)


A few points you seem unware of in your posts:

Most DB private sector schemes are also co-ordinated with SW.  I was in a very good scheme with a previous employer (financial services) where the benefit was two-thirds LESS OAP - and I think that's quite typical.
The 'miserly' 50% vs chunky 67% isn't a valid comparison because public sector is 50% PLUS a 1.5 times salary lump sum whereas private sector is usually 67% LESS an offset if the retiree elects to take a lump sum (e.g. choice of 67% pension or lump sum and lower pension of maybe 55%) - these are often not that far apart.
You say that public sector make contributions of 6.5% - in the civil service (not sure about wider public service), they pay 6.5% of net pensionable salary which is salary less twice max OAP - so they only make the contribution on that part of their salary that they will actually be funding for.  Eg, if OAP is 11K and salary is 30K, contributions will be 6.5% of 8K (30K minus twice 11K) or 1.73% of gross pay.  See Q4 in http://www.cspensions.gov.ie/faq2.pdf


----------



## csirl

> Most DB private sector schemes are also co-ordinated with SW. I was in a very good scheme with a previous employer (financial services) where the benefit was two-thirds LESS OAP - and I think that's quite typical.


 
What level of contributions did you make to receive this? Comparison with the PS rate would be interesting.


----------



## orka

csirl said:


> What level of contributions did you make to receive this? Comparison with the PS rate would be interesting.


Why would it be interesting?  It's actually of no relevance because my employer was very profitable and could do what they wanted with their income.
The total contribution to the scheme was 28% of payroll (I also paid full PRSI and my employer paid full employers' PRSI).  As is currently the case with public pensions, the benefit was grossly underappreciated by staff who couldn't see benefit in anything other than hard cash hitting the bank account each month.  So, the employer took to including their share of the contribution on monthly payslips - softened somewhat the grumblings about pay...


----------



## csirl

> Why would it be interesting? It's actually of no relevance because my employer was very profitable and could do what they wanted with their income.


 
Very very relevent to a discussion which is trying to make out that private sector workers pay more for their benefits than public sector ones.


----------



## orka

Well, as I appear to be acceptable as representative of the private sector for the purposes of looking at benefits, my current employer makes NO provision towards my pension.  Does this mean I am in a worse position than everyone in the public sector?


----------



## DerKaiser

csirl said:


> Very very relevent to a discussion which is trying to make out that private sector workers pay more for their benefits than public sector ones.


 
I would say that the 6.5% payable prior to the introduction of the levy would be closer to the typical contribution of a  private sector employee in a DB scheme.

I'd fully take your point that 14% is a much larger than average contribution.

Someone getting a similar pension to the public service one and paying less than 14% towards it is obviously getting a better deal on the pension.  There are perhaps 300,000 such employees in this country.

Question 1

Do these 300,000 such employees enjoy a similar wage to the public sector?  Are they similarly qualified?  How do their working hours and job security compare?

Question 2

What about the other 1.2 to 1.4 million workers?


This is why we firstly need an objective comparison of the entire remuneration, not one aspect of it.

And secondly, if we are offering DB schemes to our public servants we need to do a cost benefit analysis i.e. if funding costs for a salary rather than CPI linked pension are significantly higher but universally unappreciated why offer such a benefit?


----------



## Protocol

csirl said:


> Lets look at what they contribute inclusive of SW:
> 
> Pension contribution: 6.5%
> Pension Levy: 7.5%
> Employee PRSI: 6%
> Employer PRSI: 10:75%
> TOTAL: 30.75%


 
To be more precise:

*Pre-1995 typical public sector worker*

6.5% of gross
0.9% PRSI, but no SW pension
Pension levy, e.g. 6.5% of gross for somebody on 50k

So that's *13% of gross* in total.


*Post-1995 typical public sector worker*

Complex, but approx. 5% of gross for normal pension
4% PRSI
Pension levy, e.g. 6.5% of gross for somebody on 50k

So that's *15.5% of gross wage as an employee contribution* in total.


Note that the 4% PRSI entitles you to non-pension benefits as well.


----------



## Deiseblue

DerKaiser said:


> Yeah, it's quite inaccurate to say that a 2/3rds pension linked to CPI is by far better than a 50% pension linked to salary inflation


It should be pointed out that Public Sector workers do not receive the old age pension in addition to the public services pension unlike those getting Bank pensions.
Bank of Ireland employees prior to 2007 and AIB employees prior to 1996 pay a contribution of 2.5% towards their pension , a public sector worker currently pay 14% ( previously 6.5% ) towards their pensions.
Bank of Ireland pensions are linked to the National Wage Agreements not the CPI , BOI pensioners received the 3.5% increase under the National Wage agreement towards 2016 whereas with the current wage freeze in the Public Sector salary inflation does not currently enter the equation.
Bank pensions are the gold standard !


----------



## Sunny

Why are people comparing bank pensions with public sector. It has already been established that the banks are not representative of the private sector, have closed down the scheme to new members and also have big pension holes (which is beginning to come back into investor minds recently as a big issue in every company that offeres defined benefit pensions). By the way do you have a link showing that the pensions are linked to national wage agreements. First I heard of it. Also banks pensions are based on 45 years service not 40 as in public sector. They also don't get the lump sum. 

Didn't the ERSI survey today ignore pensions and still they found a premium in the public sector.


----------



## DerKaiser

Deiseblue said:


> Bank pensions are the gold standard !


 
...And have been closed to new entrants 

Are you actually sure that OAP is in addition to the 2/3 salary? Must check that with some of my friends who work there

IN any case we've already accepted that there may be some DB schemes which may be better than the public service ones. I know for a fact the LAPD can retire on 100% salary at the age of 45. BUt what's this got to do with anything?

Public service pensions are a costly benefit 
Public sector wages have increased enormously over the decade
Public sector numbers have increased over the decade
Social welfare has increased enormously over the decade
Living costs are down 6.5% since last year
We're running a €20bn per annum deficit (ignoring bank recapitalisations)
Social welfare and public sector pay & benefits make up about 2/3rds of public spending

The entenched attitude towards pay and benefits coming from the public sector and unions is nothing short of depressing.

Taxing the rich alone will not even come close to solving this crisis. Nor will blaming dodgy bankers. The difference between Government spending (2/3rds of which goes on public sector pay and social welfare) and revenues is the equivalent of an annual banking crisis.


----------



## Deiseblue

Sunny said:


> Why are people comparing bank pensions with public sector. It has already been established that the banks are not representative of the private sector, have closed down the scheme to new members and also have big pension holes (which is beginning to come back into investor minds recently as a big issue in every company that offeres defined benefit pensions). By the way do you have a link showing that the pensions are linked to national wage agreements. First I heard of it. Also banks pensions are based on 45 years service not 40 as in public sector. They also don't get the lump sum.
> 
> Didn't the ERSI survey today ignore pensions and still they found a premium in the public sector.


It has also been pointed out that others such as the insurance sector , semi-state bodies and large multi-nationals have similar schemes.
Bank of Ireland employees can retire on full pension after completing 40 years service with the Bank's agreement.
Bank of Ireland pensioners have always received the increases agreed under the National Wage Agreements , no link available but this can easily be verified by contacting the Pensions department in Head Office .
 BOI also now operate a hybrid DC/DB scheme the details of which I have outlined in a previous post.
I also note that the unions question the validity of the ERSI report


----------



## Sunny

Deiseblue said:


> I also note that the unions question the validity of the ERSI report


 
 I didn't expect that!

Why should I contact a head office to confirm your statements?


----------



## Deiseblue

Sunny said:


> I didn't expect that!
> 
> Why should I contact a head office to confirm your statements?


Because there is no link.
However , I can unequivocally confirm that Bank of Ireland pay the percentage pay increases negotiated under the national wage agreements to pensioners - if you doubt me then the best way of checking matters is the pensions dept. in head office or you could contact the IBOA.


----------



## shanegl

> I also note that the unions question the validity of the ERSI report



Really? That's interesting. What does David Begg, a director of the ESRI, have to say on the matter?


----------



## csirl

> It has also been pointed out that others such as the insurance sector , semi-state bodies and large multi-nationals have similar schemes.


 
In summary, you could say that the private sector pensions in large administrative organisations of similar size to public sector organisations have similar or better pension arrangements that most public sector organisations.

Shouldnt the real discussion be about the gap between the employees of large organisations and employees of small/medium sized organisations rather than public v private?


----------



## Deiseblue

csirl said:


> In summary, you could say that the private sector pensions in large administrative organisations of similar size to public sector organisations have similar or better pension arrangements that most public sector organisations.
> 
> Shouldnt the real discussion be about the gap between the employees of large organisations and employees of small/medium sized organisations rather than public v private?


+ 1
Excellent post.


----------



## orka

csirl said:


> In summary, you could say that the private sector pensions in large administrative organisations of similar size to public sector organisations have similar or better pension arrangements that most public sector organisations.


YOU could say that.  You could say anything you want but it wouldn’t make it correct.  I don’t accept that benefits offered to employees of large administrative organizations were ever better than the public sector pension but you’ll find that the better large company schemes have closed to new entrants and there’s a very good chance that future accrual for existing employees will switch to defined contribution also.  How difficult is it to understand the concept – “the schemes used to be provided – they became too expensive to provide so they are no longer provided”.  
Discussion of the cost of contributions is meaningless without knowing full details of relative packages.  I would prefer to earn 50K and make a 10% contribution to my pension scheme than 40K and a 5% contribution.  Would you consider the person with a 5% contribution to be better off if they both provided the same benefits?  
I would also agree with DerKaiser – I would be dubious about the bank schemes providing two-thirds PLUS OAP – can anyone confirm this definitively?




csirl said:


> Shouldnt the real discussion be about the gap between the employees of large organisations and employees of small/medium sized organisations rather than public v private?


The poor provision for the majority of the private sector is certainly a discussion worth having.  But the gap is already being closed – private sector DB schemes are being closed and benefits are becoming less attractive.  However, in the context of that minor irritation of our state hemorrhaging €20B per annum, the far more important discussion is how to save money.  The pension offered to public sector with benefits far in excess of the average private sector worker is a target for a cost saving.  It is a benefit that I believe a majority of taxpayers are coming to resent paying taxes for.


----------



## Purple

csirl said:


> Shouldnt the real discussion be about the gap between the employees of large organisations and employees of small/medium sized organisations rather than public v private?



Why? We're talking about the state spending money it doesn't have. 
What large organisations spend on remuneration is nothing to do with that.


----------



## Deiseblue

I would also agree with DerKaiser – I would be dubious about the bank schemes providing two-thirds PLUS OAP – can anyone confirm this definitively?
I can confirm without a shadow of a doubt that as well as the 2/3rd of final salary pension Bank pensioners will also receive the Old Age Pension on attaining 66 as long as they keep their credits up to date at the local social welfare office.
I also note what you say about closing off the DB schemes to new entrants , the Bank of Ireland have introduced a hybrid DB/DC scheme which actuarially calculates a pension of 2/3rds of final salary based on employee contributions of 5.5% of salary , I posted all the details in a previous post.


----------



## csirl

Purple said:


> Why? We're talking about the state spending money it doesn't have.
> What large organisations spend on remuneration is nothing to do with that.


 
Yes we are. But the solution is not to impose a blanket cut on all public sector workers. The reality is that programmes in the public service will be shut down. If a programme is shut down, the people working in it should be made redundant. You dont want a situation where you have people in productive funded programmes taking a pay or pensions cut to keep surplus staff in non-funded programmes twiddling their thumbs. This would never happen in the private sector.

There is also the overall argument about employees renumeration and benefits. In any job, whether in recession or not, if you pay people below the odds, then the best people will drift away to other organisations. Yes, there is a delicate balance here between affordability and pay rates, but you cannot totally disregard the market rate for a job (which is lower in a recession). 


Finally, the main argument put forward on this thread for cutting public service pensions is that we cannot afford it. By implication, does this mean that in good times when their is an exchequer surplus, the government should make public service pensions more generous? Do people want public service pay to be linked to exchequer performance? How best could this be introduced? Should there be a profit sharing scheme for public servants (bearing in mind that most of the staff of the Dept of Finance would probably be millionaires now if their was a profit sharing scheme in operation for the past decade). Would this be acceptable?


----------



## Purple

csirl said:


> Yes we are. But the solution is not to impose a blanket cut on all public sector workers. The reality is that programmes in the public service will be shut down. If a programme is shut down, the people working in it should be made redundant. You don’t want a situation where you have people in productive funded programmes taking a pay or pensions cut to keep surplus staff in non-funded programmes twiddling their thumbs. This would never happen in the private sector.


 I agree but the public sector unions have stopped reasonable reform for years so now we have no choice. 



csirl said:


> There is also the overall argument about employees renumeration and benefits. In any job, whether in recession or not, if you pay people below the odds, then the best people will drift away to other organisations. Yes, there is a delicate balance here between affordability and pay rates, but you cannot totally disregard the market rate for a job (which is lower in a recession).


 There is not, and for decades there has not been, a case to be made for pay increases in the broader public sector due to market conditions. The public sector were better paid than their private sector counterparts 15 years ago and the gap has widened massively over those years.  




csirl said:


> Finally, the main argument put forward on this thread for cutting public service pensions is that we cannot afford it. By implication, does this mean that in good times when their is an exchequer surplus, the government should make public service pensions more generous? Do people want public service pay to be linked to exchequer performance? How best could this be introduced? Should there be a profit sharing scheme for public servants (bearing in mind that most of the staff of the Dept of Finance would probably be millionaires now if their was a profit sharing scheme in operation for the past decade). Would this be acceptable?


 No, pensions should be seen as part of an overall remuneration package that is just attractive enough to get and keep the right people for the job. What has happened is the government gave pay and pension awards during a short-term capital tax income boom that have to be funded out of current tax income for the next 40 years. It was never sustainable. It was based on political horse-trading, not any economic or social need.


----------



## DerKaiser

csirl said:


> There is also the overall argument about employees renumeration and benefits. In any job, whether in recession or not, if you pay people below the odds, then the best people will drift away to other organisations. Yes, there is a delicate balance here between affordability and pay rates, but you cannot totally disregard the market rate for a job (which is lower in a recession).


 
First theory:  You could probably cut public service pay by 10% with negligible impact on the quality of applicants 



csirl said:


> Finally, the main argument put forward on this thread for cutting public service pensions is that we cannot afford it. By implication, does this mean that in good times when their is an exchequer surplus, the government should make public service pensions more generous? Do people want public service pay to be linked to exchequer performance? How best could this be introduced? Should there be a profit sharing scheme for public servants (bearing in mind that most of the staff of the Dept of Finance would probably be millionaires now if their was a profit sharing scheme in operation for the past decade). Would this be acceptable?


 
Second Theory:  Benchmarking has achieved what you've described above


----------



## csirl

Probably the big issue here is that public sector managers are not allowed to negotiate terms and conditions with the staff they hire at the time of hire and have no say in the numbers of staff hired/fired. There is too much of a one shoe fits all approach. Public sector managers should be given targets and budgets and be allowed to work within these parameters.


----------



## BeanPole

liaconn said:


> Beanpole
> 
> You keep banging on about a 20% pay cut across the board but, when asked, refuse to explain how you came up with this figure. For instance why the same percentage across the board? Why 20%? Is this in addition to the cuts we have already taken? (and yes, the pension levy is a 'cut'!).
> 
> Its just really hard to take your posts seriously when you just bang out statements with no analysis or explanation.


 
Sorry liaconn

It's been really hectic at work, so I haven't had the time or interest to get back to you to try to justify my entirely sensible starting point of a 20% pay cut.

If you really are struggling to find evidence that the public sector are massively overpaid compared to the private sector, have a look at the latest ESRI report:
http://www.rte.ie/news/2009/1009/economy.html

Fintan O'Toole also had a good analysis in the Irish Times during the week.

I don't think its necessarily accurate to benchmark against current wages in the private sector, as many private sector workers (including everyone at the manufacturing site where I work) are under pressure to take pay cuts for ever increasing hours. We are fighting for the survival of our jobs and homes. 

I think a more accurate benchmark would be to compare public sector pay and conditions with those of our European neighbours. As one German diplomat pointed out recently, there is no reason why a civil servant in Ireland should be paid three times the level of his German counterpart. I also have a number of friends, who were hospital consultants in the UK, who came back to a more than doubling of their pay in Irish hospitals. 

Nope - the truth is that 20% is probably a fair starting point in public sector wages, social welfare, and the minimum wage in order to take a dramatic step change in the cost base of our economy


----------



## S.L.F

BeanPole said:


> If you really are struggling to find evidence that the public sector are massively overpaid compared to the private sector, have a look at the latest ESRI report:
> http://www.rte.ie/news/2009/1009/economy.html


 
Is this the same report that got it's comparisons of what the Gardai are worth by comparing them to security guards.

The same report that compares DIT lecturers to teachers.

*Maybe* then librarians should be compared to video shop assistants.

*Maybe* trained chefs in canteens should be compared to what a cook in McDonalds would make.



BeanPole said:


> I think a more accurate benchmark would be to compare public sector pay and conditions with those of our European neighbours. As one German diplomat pointed out recently, there is no reason why a civil servant in Ireland should be paid three times the level of his German counterpart. I also have a number of friends, who were hospital consultants in the UK, who came back to a more than doubling of their pay in Irish hospitals.


 
Did this same diplomat say anything about the cost of houses, fuel, cars, insurance, food or clothes in Ireland as compared to Germany.

Does this diplomat believe that public servants should live on grass and water?

I would think this diplomat is not being very diplomatic and would need a pay decrease since they are not very good at their job.

I have no qualms about attacking the pay of consultants I think they are paid far too much.

95% of public servants are just doing their job and mostly scrape by (these days) I don't doubt that there are Public servants who make a serious killing financially but they are few and far between and I believe it is very unfair to paint all 350,00 people in the PS with the same biased brush


----------



## BeanPole

To say that teachers in their early 30s on €40k per year (plus the hols, the pension,etc etc) are "scraping by" is an insult. As for €60k at the top of the scale - sheesh !!

The cost of living in Ireland is caused, in no small way, by our inflated salaries. 

In the exposed private sector, we are making painful adjustments very quickly indeed. In my own company, we have had across the board pay cuts already this year, and more likely before Christmas. It's that or the jobs to Eastern Europe, where a highly skilled, low cost workforce can do our jobs just as well, while local tax rates are far lower.

To see SIPTU and IMPACT on the news screaming for more pay rises for a cossetted public sector is a slap in the face to those of us scraping by, and praying that our jobs will be here tomorrow. 

It is patently unfair to suggest that the entire pain for the readjustment / depression that Ireland is going through should be borne by private sector workers


----------



## Firefly

S.L.F said:


> Did this same diplomat say anything about the cost of houses, fuel, cars, insurance, food or clothes in Ireland as compared to Germany.


 
With the exception of fuel, all others will come down if wages fall.


----------



## S.L.F

BeanPole said:


> To say that teachers in their early 30s on €40k per year (plus the hols, the pension,etc etc) are "scraping by" is an insult. As for €60k at the top of the scale - sheesh !!


 
Are you saying *all* Public Servants are on 60k in their early 30's?

If so I suggest you take a walk outside and breath some fresh air because whatever you are smoking is distorting your sense or reality.



BeanPole said:


> The cost of living in Ireland is caused, in no small way, by *our* inflated salaries.


 
Not the bosses...just the workers???



BeanPole said:


> In the exposed private sector, *we* are making painful adjustments very quickly indeed. In my own company, we have had across the board pay cuts already this year, and more likely before Christmas. It's that or the jobs to Eastern Europe, where a highly skilled, low cost workforce can do our jobs just as well, while local tax rates are far lower.


 
My understanding is that 90% of the private sector haven't taken a pay cut as of yet but you are harping on as if every single person who works for the private sector has taken a pay cut.

*100%* of the Public service has taken a pay cut.



BeanPole said:


> To see SIPTU and IMPACT on the news *screaming* for more pay rises for a cossetted public sector is a slap in the face to those of us scraping by, and praying that our jobs will be here tomorrow.


 
First I've heard of the unions *screaming*.



BeanPole said:


> It is patently unfair to suggest that the entire pain for the readjustment / depression that Ireland is going through should be borne by private sector workers


 
Who suggested this???

I certainly did not and no PS employee on AAM has ever said this so can you back up the claim that someone suggested this.



Firefly said:


> With the exception of fuel, all others will come down if wages fall.


 
Will mortgages?


----------



## S.L.F

BeanPole said:


> Fintan O'Toole also had a good analysis in the Irish Times during the week.


 
Any link to this statement???

In the meantime another good analysis

[broken link removed]


----------



## Complainer

BeanPole said:


> The cost of living in Ireland is caused, in no small way, by our inflated salaries.


Don't forget our hugely inflated property prices (and don't forget that NAMA will ensure that they stay inflated).


----------



## Purple

Complainer said:


> Don't forget our hugely inflated property prices


 Yes, the ones inflated by our inflated salaries...


----------



## liaconn

BeanPole said:


> Sorry liaconn
> 
> It's been really hectic at work, so I haven't had the time or interest to get back to you to try to justify my entirely sensible starting point of a 20% pay cut.
> 
> If you really are struggling to find evidence that the public sector are massively overpaid compared to the private sector, have a look at the latest ESRI report:
> http://www.rte.ie/news/2009/1009/economy.html
> 
> Fintan O'Toole also had a good analysis in the Irish Times during the week.
> 
> I don't think its necessarily accurate to benchmark against current wages in the private sector, as many private sector workers (including everyone at the manufacturing site where I work) are under pressure to take pay cuts for ever increasing hours. We are fighting for the survival of our jobs and homes.
> 
> I think a more accurate benchmark would be to compare public sector pay and conditions with those of our European neighbours. As one German diplomat pointed out recently, there is no reason why a civil servant in Ireland should be paid three times the level of his German counterpart. I also have a number of friends, who were hospital consultants in the UK, who came back to a more than doubling of their pay in Irish hospitals.
> 
> Nope - the truth is that 20% is probably a fair starting point in public sector wages, social welfare, and the minimum wage in order to take a dramatic step change in the cost base of our economy


 
You still haven't answered my question re your self proclaimed 'entirely sensible starting point'. If you go back to my post I broke my question  down into a few simple stages for you.


----------



## csirl

> I think a more accurate benchmark would be to compare public sector pay and conditions with those of our European neighbours. As one German diplomat pointed out recently, there is no reason why a civil servant in Ireland should be paid three times the level of his German counterpart. I also have a number of friends, who were hospital consultants in the UK, who came back to a more than doubling of their pay in Irish hospitals.


 
Are UK and German pay rates appropriate? Private sector wages in Ireland are at least one third higher than private sector wage in the UK. UK isnt even in the Euro. 

If it wasnt for the low corporation tax here, the vast majority of private sector jobs would be uncompetitive. Essentially, companies chose to take a lower level of profit (due to higher wages), and use the benefit of the lower tax rates to offset this. The two go hand in hand - low corporation tax = high wages; high corporation tax = low wages. 

Comparisons of wage rates in Ireland are meaningless when compared with high corporation tax wages. Public service wages follow on from this - they increase to keep up with private sector wages, though usually there is a time lag on increases/decreases in public sector wages.


----------



## Purple

csirl said:


> Public service wages follow on from this - they increase to keep up with private sector wages, though usually there is a time lag on increases/decreases in public sector wages.



But they started higher than the private sector and over the last 10 years the gap has increased.


----------



## csirl

Purple said:


> But they started higher than the private sector and over the last 10 years the gap has increased.


 
I'm not so sure the comparisons in these "studies" are like for like.

Best comparison is recruitment/retention.

There was a period of time between c.1999 and 2005 where the public service was leaking people more quickly than it could fill positions. In the high years of the celtic tiger - 2003 to 2005, the public service found recuitment very difficult and the calibre of candidates for many jobs was a lot lower than in previous eras. It wasnt until 2007 that this began to turn again. The fact that it was leaking people and couldnt recruit good employees is proof that the private sector was offering better terms and conditions.

I know quite a few people who left the public sector in around 2001-2003 because they were getting offers from the private sector they just couldnt refuse -wage levels well in excess of their public sector wages. Interestingly, a couple of these people have returned to the public sector over the past couple of years, but not in the same positions - they were only willing to move back to the public sector in return for a promotion - pay in the private sector was and is still higher for a job of the same level.

Averages dont tell the full story. My impression is that the public sector is most overpaid in lower level jobs. I know I'll get criticised for saying this, but it is true. Public sector workers in lower paid jobs have either incremental progression that takes them to a pay level way above what the job is worth or are just paid more than the private sector because the unions play the poor mouth card in pay negotiations and usually get better increases (or lower decreases as we've seen with the levys) that other public sector workers. At the other end of the scale, professional well qualified people are usually underpaid in comparison with the private sector. Not saying they are poor, but they dont get anything like the same level of renumeration of private sector equivalents.


----------



## Purple

csirl said:


> Averages dont tell the full story. My impression is that the public sector is most overpaid in lower level jobs. I know I'll get criticised for saying this, but it is true. Public sector workers in lower paid jobs have either incremental progression that takes them to a pay level way above what the job is worth or are just paid more than the private sector because the unions play the poor mouth card in pay negotiations and usually get better increases (or lower decreases as we've seen with the levys) that other public sector workers. At the other end of the scale, professional well qualified people are usually underpaid in comparison with the private sector. Not saying they are poor, but they dont get anything like the same level of renumeration of private sector equivalents.



I agree with you on that bit.
I would point out that during the period from 2003-2005 the state was taking on about 20'000 people a year. Any organisation taking on such numbers will need time to fill them all.


----------



## csirl

> I would point out that during the period from 2003-2005 the state was taking on about 20'000 people a year.


 
This is mainly in the health and education sectors - the core civil service was undergoing job cuts as well as keeping jobs vacant due to decentralisation during this time. I think we can all agree that a lot of those taken on obviously are not up to the job - the HSE being the perfect example. There was a bout of "just hire anyone" going on at this time as funding coming on stream in health and education which outstripped the number of quality candidates available for jobs.


----------



## liaconn

Any chance of an answer to my question, Beanpole? Or do you still not have the 'interest' to back up a call for 20% pay cuts across the board with an explanation of your rationale?


----------



## DerKaiser

I think the biggest stat in all of this is unemployment. We have about 400,000 unemployed, about 200,000 of whom had been in employment for a number of years.

Look at queues turning up for any available job. How can we justify inflated pay levels when we have such a supply of labour?

The reason we have this level of unemployment, far above the European average, has been our deterioration in competitiveness in the labour market here.

Professional fees, Public service pay, minimum wages and the dole (to maintain the gap with minimum wage and not encourage people into the poverty trap) all need to come down. Any union opposition to this amounts to throwing those already out of work to the wolves and reducing the employment prospects of young people.

In the same way, not addressing public spending now is simply maintaining unrealistic lifestyes in the short term and making the next generation pay for the debt run up.

Don't let any union rhetoric fool you. The 'hands off our pay' call simply translates into screw the young and the unemployed instead


----------



## Latrade

I wish the comparisson thing between private and public on both sides would cease and desist. It's a red herring that is taking us away from the simple fact that the outgoings do not match in the incomings. We have to address this balance.

In all the pages of debate on this thread and others, I think all we can say is that it is too difficult to compare the two directly. I suppose the point would be if it is wrong to compare the two in order to justify pay cuts in the PS/CS, then you have to accept it was wrong to compare the two in order to justify the pay increase in the PS/CS.

Just to clarify some points though. The CSO's figures do not show pay cuts in the private sector. And they're right, basic pay hasn't been cut in a lot of cases. But what they don't take account of is that there have been other cuts outside of basic pay level. 

Redundancies, loss of bonuses, loss of overtime, reduced hours or days, etc. So it's unfair to say there haven't been cuts as there's only a few sectors of employment that haven't suffered with the current situation. Most others have either lost staff or reduced unit cost.

And that's it, we need to reduce the unit cost of providing the services we do. No one from the government has come out and said it means teachers, gardai, nurses, etc on the streets. That's been the unions and the media. People are getting wound up over something that hasn't even been decided yet.

In order to fix this we need to get that huge difference between tax revenue and public pay down and now. Cuts are obvious, but just like the Tax Report was to look at taxing in the long term, reform of the PS is for the long term. Getting the unit price down will unfortunately mean some loss of jobs, we don't know where from yet though. It will mean some look at pay. But it's going to be general views, like other employers, in terms of "other" costs that can be cut down.


----------



## Caveat

Latrade said:


> I suppose the point would be if it is wrong to compare the two in order to justify pay cuts in the PS/CS, then you have to accept it was wrong to compare the two in order to justify the pay increase in the PS/CS.


 
Very good point.


----------



## Shawady

I would aggree with a lot of Der Kaiser and Latarde's points but when you see that the ERSI are recommending the government does not cut social welfare rates, you have to wonder how they are going to cut the deficit.
The social welfare bill is the biggest cost to the state but anytime it is mentioned it may have to be cut, the phrase 'most vulnerable in society' is thrown out.

http://www.rte.ie/business/2009/1013/esri.html


----------



## Complainer

DerKaiser said:


> Look at queues turning up for any available job. How can we justify inflated pay levels when we have such a supply of labour?


This is the 'Let's not waste the recession' approach. The recession is seen as the opportunity to cut wages and salaries. Are you seriously suggesting that we should be replacing existing staff members with unemployed people to save money?


DerKaiser said:


> Professional fees, Public service pay, minimum wages and the dole (to maintain the gap with minimum wage and not encourage people into the poverty trap) all need to come down. Any union opposition to this amounts to throwing those already out of work to the wolves and reducing the employment prospects of young people.
> 
> In the same way, not addressing public spending now is simply maintaining unrealistic lifestyes in the short term and making the next generation pay for the debt run up.
> 
> Don't let any union rhetoric fool you. The 'hands off our pay' call simply translates into screw the young and the unemployed instead


This is dangerous and divisive nonsense, trying to distract attention from the real issues by pitting one group against another. It ignores many other parts of the equation - the money being  paid over to the banks, the costs of tax breaks to property developers, the massive tax allowances available to pension contributions, the tax allowances available to developers of private health clinics etc etc.

Don't be fooled by this divisive rhetoric - look at the big picture.


----------



## Purple

Complainer said:


> Don't be fooled by this divisive rhetoric - look at the big picture.



How ironic; all of the above is nothing when compared to the massive overspend in public sector pay and social welfare.

By the way, nobody is "pitting two groups against each other". The private sector has finally woken up to the fact that they are being bled dry by greedy public sector unions and their whiskered fat-cat leaders.

Here’s a question; If all of the tax breaks that cause your blood pressure to rise are taken away (even the ones for private hospitals that save the state money) and the exchequer is still screwed would you stop this nonsensical defence of the indefensible and agree that public sector pay needs to be cut? (Or maybe you are like IMPACT and would rather see a cut in services than a cut in pay?).

I expect, as usual, there will be no reply from you.


----------



## DerKaiser

Complainer said:


> This is the 'Let's not waste the recession' approach. The recession is seen as the opportunity to cut wages and salaries. Are you seriously suggesting that we should be replacing existing staff members with unemployed people to save money?


 
In the last 10 years we've had close to full employment and have had to import labour from abroad to keep up with demand.  Wages naturally increased.

We now have 200,000 people on the dole who were working last year and probably 60,000 people per annum looking to enter the workforce from school or college.  That's a lot of labour supply.  We can go down two roads:

1) Closed shop.  Shut out the unemployed and graduates into a long term life on the dole in order to maintain the salaries of the current incumbants

or

2) Recognise that there are excellent quality people with no jobs drawing the dole whilst current occupants of jobs maintain wages that only arose due to labour shortages from a few years ago



Complainer said:


> Don't be fooled by this divisive rhetoric - look at the big picture.


 
The big picture is that we are in a recession and we are running up huge debts that will cripple future generations.  I gladly have paid extra taxes and will pay more taxes but that is only one side of the equation.  We need to stand up to all vested interests who refuse to take part in solving this crisis.

Tax breaks are being closed off and/or granted at a lower rate.  The banking and building issue are being dealt with.  The current public spending issue should also be addressed before we are incapacitated by debt


----------



## Complainer

DerKaiser said:


> 2) Recognise that there are excellent quality people with no jobs drawing the dole whilst current occupants of jobs maintain wages that only arose due to labour shortages from a few years ago


Oh don't be so coy. Why not be a bit clearer about your recommendation. This is the IBEC wet dream - dump all employment protections, and let employers (public and private) continuously cut wages and conditions and fire any objectors, until we are all working in sweatshop conditions. This is your proposal - right?



DerKaiser said:


> The big picture is that we are in a recession and we are running up huge debts that will cripple future generations. I gladly have paid extra taxes and will pay more taxes but that is only one side of the equation. We need to stand up to all vested interests who refuse to take part in solving this crisis.
> 
> Tax breaks are being closed off and/or granted at a lower rate. The banking and building issue are being dealt with. The current public spending issue should also be addressed before we are incapacitated by debt


It is good to hear 'more taxes' on the agenda. It's not often this gets a mention here on AAM. Many AAM readers be forgiven for missing the fact that many, many private sector workers have not had pay cuts, and are continuing to do quite nicely, benefiting from price deflation and keeping their heads down to avoid attention. Income tax increases will mean that those who are earning (public and private) contribute to the solution.

Your claims about 'tax breaks being closed off and/or granted at a lower rate' is far from comprehensive. There is still no cap for mortgage interest relief for property investors (unlike the modest cap for residential mortgage holders). There are still tax breaks for developers of private medical clinics (i.e. the state subsidises a service that will only be available to the wealthy). Don't expect people to be patient about addressing these issues while expecting instant reductions in public sector salaries (which of course, have already experienced a significant cut).


----------



## liaconn

Complainer said:


> It is good to hear 'more taxes' on the agenda. It's not often this gets a mention here on AAM. Many AAM readers be forgiven for missing the fact that many, many private sector workers have not had pay cuts, and are continuing to do quite nicely, benefiting from price deflation and keeping their heads down to avoid attention. Income tax increases will mean that those who are earning (public and private) contribute to the solution.
> 
> Your claims about 'tax breaks being closed off and/or granted at a lower rate' is far from comprehensive. There is still no cap for mortgage interest relief for property investors (unlike the modest cap for residential mortgage holders). There are still tax breaks for developers of private medical clinics (i.e. the state subsidises a service that will only be available to the wealthy). Don't expect people to be patient about addressing these issues while expecting instant reductions in public sector salaries (which of course, have already experienced a significant cut).


 

Well Said.


----------



## Protocol

There are still dozens, even hundreds, of tax reliefs in existence.

See here:



Most of these should be abolished, unless there is a strong case for them.


----------



## Caveat

OK then - _Complainer_, _Liaconn_ & _Dieselblue_ for example:

Simple question, YES or NO answer please. 

"Do you agree that there needs to be substantial cuts made within the public sector either in personnel and/or in pay?"


----------



## liaconn

I agree the public sector is overstaffed. 

I agree _*some* _people in the public sector are on ridiculously high salaries.

I do not agree that _*all *_people in the public sector are overpaid. 

I do not agree that *all *people in the private sector are taking pay cuts or losing their jobs.

Using all that as a starting point I agree we should stop fighting with each other and try and find a fair solution to *our* problem.


----------



## Purple

liaconn said:


> I agree the public sector is overstaffed.
> 
> I agree _*some* _people in the public sector are on ridiculously high salaries.
> 
> I do not agree that _*all *_people in the public sector are overpaid.
> 
> I do not agree that *all *people in the private sector are taking pay cuts or losing their jobs.
> 
> Using all that as a starting point I agree we should stop fighting with each other and try and find a fair solution to *our* problem.



And there was I thinking it was a simple question.
BTW I agree with your points above but that's not the issue.


----------



## Complainer

Caveat said:


> OK then - _Complainer_, _Liaconn_ & _Dieselblue_ for example:
> 
> Simple question, YES or NO answer please.
> 
> "Do you agree that there needs to be substantial cuts made within the public sector either in personnel and/or in pay?"



Well if you're going to act like Miriam O'C, I'm going to act like the Minister.

Well Miriam, I'm glad you asked me that question, blah, blah, blah.

Let's look at the facts. Substantial cuts have already been to public sector personnel and to public sector pay. Many contract positions have already been cut, and those that haven't won't be renewed. For example, one local authority that I'm aware of has had their health & safety team cut from five to one. So one person is now responsible for ensuring health & safety of every set of roadworks in the county, and every local authority depot and building. So now they are paying outside consultants to carry out workstation assessments that would previously have been done in-house for a fraction of the cost. 

The rush to cut public salaries is misguided. This will take considerable amounts of money out of the economy with substantial downstream effects and push many more people onto the dole. 


Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part. The public sector is ready to be part of the solution, but it is not going to be the sole, soft target for cuts.


----------



## DerKaiser

Complainer said:


> Oh don't be so coy. Why not be a bit clearer about your recommendation. This is the IBEC wet dream - dump all employment protections, and let employers (public and private) continuously cut wages and conditions and fire any objectors, until we are all working in sweatshop conditions. This is your proposal - right?


 
Acknowledging that pay increases granted in inflationary times should be reversed in deflationary times is not tantamount to dumping employment protections.

From other posts you seem to be in the school of economics that justified pay raises against the increased housing costs of the last decade. Please show some consistency in the light of increased affordability.

We live in a high cost economy simply because we bought into the 'pay us more because costs of living are increasing' mantra. Well we lost the run of ourselves collectively and got into a vicious circle of wage inflation that has been every bit as damaging as the banking scandals.

There is no moral authority for anyone to berate the banks and builders if they show no willingness to accept the action needed on addressing the current budget deficit arising from unsustainably high public spending


----------



## DerKaiser

Complainer said:


> The rush to cut public salaries is misguided. This will take considerable amounts of money out of the economy with substantial downstream effects and push many more people onto the dole.


 
Works out nicely for you that the solution to all our fiscal problems is to pump money into the economy through high wages  and high consumption of public servants.  If that's your economic view then why not instead increase the dole, as social welfare will have a higher multiplier impact



Complainer said:


> Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part. The public sector is ready to be part of the solution, but it is not going to be the sole, soft target for cuts.


 
Sole target?  200,000 people have lost their jobs.  Political action is needed to address public spending and that is why it is being constantly debated. Market forces will dictate non public sector wages. 

I'm sure the public service is doing a good job but we just can't afford the wage levels


----------



## Purple

Complainer said:


> So the public sector has done its part, and now it is time for others to play their part.


If I, in a private company, take a pay cut how does that reduce the government deficit?
I have no problem paying more tax, as I have stated many times, but reducing wages in the private sector doesn't help reduce state borrowing. It will make the country more competitive in the medium term but we're screwed in the short term if we don't get the borrowing sorted out.


----------



## MOB

Complainer said:


> The rush to cut public salaries is misguided. This will take considerable amounts of money out of the economy with substantial downstream effects and push many more people onto the dole.
> 
> Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part. The public sector is ready to be part of the solution, but it is not going to be the sole, soft target for cuts.



The above quote neatly encapsulates the main arguments emanating from those who disagree with public sector pay cuts.  Let's deal with them one by one;

1.  Will a public sector pay cut take " considerable amounts of money out of the economy"?  Yes of course it will.  But it is borrowed money. We are borrowing lots of money and we are mortgaging our children's future to have this money in the economy.  We know that wide-scale pay cuts reduce the size of the economy.  We must do this if it is our "least-worst" option.  I think we have no choice but to do it.  But perhaps we, as a nation, will make a different choice.  I hope not.

2.  Will a public sector pay cut push "many more people onto the dole".  I don't know.  Certainly, it won't push any public sector employees onto the dole.  Those who sell goods and services to the public sector ( and to the employees of the public sector) will of course see their businesses suffer.   So yes - it will produce higher unemployment.   

3.   "Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part."   Here is where the serious disagreement starts.   I am sorry to be blunt but it is just nonsense to suggest that the public sector has 'done its part'.   Out here in Reality Land, many people are coping with downturns of 30-50% in business and resultant downturns of 40-60% in their income.  Employees are facing 20% pay cuts and mass lay-offs.   Of course some private sector employees ( and businesses) are doing quite nicely.   But the reality is that the public sector has been disproportionately insulated from the worst effects of the downturn, the brunt of which has been borne by private sector employees.  To present the public sector as a 'sole soft target' is, with respect, to take a perspective utterly divorced from reality.


----------



## Complainer

MOB said:


> 1.  Will a public sector pay cut take " considerable amounts of money out of the economy"?  Yes of course it will.  But it is borrowed money. We are borrowing lots of money and we are mortgaging our children's future to have this money in the economy.  We know that wide-scale pay cuts reduce the size of the economy.  We must do this if it is our "least-worst" option.  I think we have no choice but to do it.  But perhaps we, as a nation, will make a different choice.  I hope not.


Your analysis implies that the impacts of all other options have been seriously evaluated and proven as worse than cutting public sector. What serious analysis has been done on other options to address the deficit, including increasing income tax, increasing CGT, increasing corporation tax and cutting out many of the existing tax reliefs available to the wealthy? You can't rule something as 'least-worst' until you have evaluated all other options. 


MOB said:


> 2. Will a public sector pay cut push "many more people onto the dole". I don't know. Certainly, it won't push any public sector employees onto the dole. Those who sell goods and services to the public sector ( and to the employees of the public sector) will of course see their businesses suffer. So yes - it will produce higher unemployment.


To be honest, I was thinking about direct public job cuts, as mentioned in Caveat's question, but thanks for reminding all about the downstream impact of job cuts. This is not just an sociological issue, this is a real economic issue. More unemployment (direct and downstream) has a direct cost on the state. Is it unreasonable to suggest that perhaps someone should check whether the net economic effects of the job cuts is to save the state money, or possibly to actually cost the state even more money.



MOB said:


> 3. "Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part." Here is where the serious disagreement starts. I am sorry to be blunt but it is just nonsense to suggest that the public sector has 'done its part'. Out here in Reality Land, many people are coping with downturns of 30-50% in business and resultant downturns of 40-60% in their income. Employees are facing 20% pay cuts and mass lay-offs. Of course some private sector employees ( and businesses) are doing quite nicely. But the reality is that the public sector has been disproportionately insulated from the worst effects of the downturn, the brunt of which has been borne by private sector employees. To present the public sector as a 'sole soft target' is, with respect, to take a perspective utterly divorced from reality.


Sorry to dissapoint you, but I live in reality land too. I have direct family members unemployed, and others with salary cuts. I do know what's happening out there. I know that my former colleagues in private sector software industry are whinging about their pay being frozen, but they have had no pay cuts. They did cut some staff, but this was really just a case of 'don't waste the recession', taking the opportunity to dump some staff no longer wanted. 

The recent publication of wages by the CSO for Q1 2009 (certain industries) showed very little decreases and (surprise surprise) increases in some area. See http://www.irisheconomy.ie/index.php/2009/08/17/where-are-the-wage-cuts/ for an analysis of these figures, and see http://www.irisheconomy.ie/index.php/2009/08/17/where-are-the-wage-cuts/#comment-12453 for confirmation of this analysis by the high priest of the slash-and-cut brigade, Colm McCarthy himself.

As a matter of fact and public record, the public sector is the only sector that has taken an absolute across the board cut. 

The benefit of using income tax as the main mechanism for balancing the books now, is that those who are earning will pay, and those who are not earning will not pay.




DerKaiser said:


> Works out nicely for you that the solution to all our fiscal problems is to pump money into the economy through high wages  and high consumption of public servants.  If that's your economic view then why not instead increase the dole, as social welfare will have a higher multiplier impact
> 
> Sole target?  200,000 people have lost their jobs.  Political action is needed to address public spending and that is why it is being constantly debated. Market forces will dictate non public sector wages.


I didn't suggest anything about 'pumping money'. As MOB accurately notes above, cuts will have direct and downstream effects. Perhaps in the rush to slash-and-burn, somebody should stop and do the sums and see if these cuts will actually save money, or end up costing more money downstream.



DerKaiser said:


> Acknowledging that pay increases granted in inflationary times should be reversed in deflationary times is not tantamount to dumping employment protections.
> From other posts you seem to be in the school of economics that justified pay raises against the increased housing costs of the last decade. Please show some consistency in the light of increased affordability.
> We live in a high cost economy simply because we bought into the 'pay us more because costs of living are increasing' mantra. Well we lost the run of ourselves collectively and got into a vicious circle of wage inflation that has been every bit as damaging as the banking scandals.
> 
> There is no moral authority for anyone to berate the banks and builders if they show no willingness to accept the action needed on addressing the current budget deficit arising from unsustainably high public spending


Please stop trying to beat your views into other people. You don't have a monopoly of expertise here. Questioning and challenging your approach does not equate to an unwillingness to solve the problem. There are a range of solutions available, but your absolute and one-sided focus on the slash-and-burn approach does not stand up.  Your one-sided analysis of wage inflation doesn't really help us towards a solution either. It wasn't wage inflation that increased property prices. It was the 'perfect storm' of FF/PD planning policy, FF/PD economic policy (giving huge state subsidies to construction and property management, and giving carte-blanche to the banks to inflate prices via flaccid lending controls)


----------



## DerKaiser

Complainer said:


> Please stop trying to beat your views into other people. You don't have a monopoly of expertise here.



It's a discussion/debate, you surely understand people are going to push their views?

I have no prejudices, I just want to see progress towards addressing the €20bn current deficit.  If that's from €4bn in spending cuts or €2bn in spending and €2bn in taxes this year, so be it.  Trying to raise €4bn from taxes alone whilst leaving both public sector pay _and _social welfare untouched for another year is not an option

My simple view is that there is more scope for spending cuts than tax rises and this is allied to my belief that too large a focus on taxes will be more counter productive to recovery than spending cuts.

I'm realistic enough to realise that I'm not going to get anyone to admit that they are overpaid for what they do, so I can understand why people can be defensive in this respect.


----------



## DerKaiser

Complainer said:


> Your one-sided analysis of wage inflation doesn't really help us towards a solution either.



I'd argue that it's a vital part of the solution

[broken link removed]


----------



## Birroc

Complainer said:


> The rush to cut public salaries is misguided. This will take considerable amounts of *borrowed* money out of the economy with substantial downstream effects and push many more people onto the dole.


 
I inserted a word for you above in bold just for clarity


----------



## csirl

> 3. "Public sector staff have already had a substantial cut in pay via the so-called pensions levy. So the public sector has done its part, and now it is time for others to play their part." Here is where the serious disagreement starts. I am sorry to be blunt but it is just nonsense to suggest that the public sector has 'done its part'. Out here in Reality Land, many people are coping with downturns of 30-50% in business and resultant downturns of 40-60% in their income. Employees are facing 20% pay cuts and mass lay-offs. Of course some private sector employees ( and businesses) are doing quite nicely. But the reality is that the public sector has been disproportionately insulated from the worst effects of the downturn, the brunt of which has been borne by private sector employees. To present the public sector as a 'sole soft target' is, with respect, to take a perspective utterly divorced from reality.


 
I think this is a gross over exageration. Even the most pessimistic projections have the economy is constricting by only 5-7%, which means that the average reduction in wealth will only be 5-7%, not the "20%" plus figures you are quoting. Maybe certain sectors will be hit hard, but they are not typical. Lets not get carried away here. 



> Sole target? 200,000 people have lost their jobs.


 
200k extra people signing on does not equate to 200k extra unemployed people. People who are on short weeks etc. sign on for the day or two they are not working. Workers who used to work 6 days a week and now only work a more normal 5, sign on for 1 day a week. These are not necessarily poor people. I've a close friend who's been put on a 3 day week. His income is still on in excess of 60k per annum for the 3 day week and he collects dole for the remaining 2 days. He's counted as "unemployed" in these stats. There are many more like him.


----------



## MOB

csirl said:


> I think this is a gross over exageration. Even the most pessimistic projections have the economy is constricting by only 5-7%, which means that the average reduction in wealth will only be 5-7%, not the "20%" plus figures you are quoting. Maybe certain sectors will be hit hard, but they are not typical. Lets not get carried away here.



I hope you are right.  I really do.   Perhaps - being in the legal profession - I am unduly sensitised as a result of the drop in the number of property transactions.

The tax collected in the next couple of months will be a useful indicator as to whether things are really as bad as I fear.  I am very fearful that there will be a massive drop in tax receipts.


----------



## Caveat

csirl said:


> His income is still on in excess of 60k per annum for the 3 day week and he collects dole for the remaining 2 days. He's counted as "unemployed" in these stats. There are many more like him.


 


There are *many more* like him? Earning 60K PA for a 3 day week?

C'mon - now who is exaggerating.

Who are the 'many' who earn 100K PA because the last I heard it was only a couple of % of the population.


----------



## liaconn

liaconn said:


> Any chance of an answer to my question, Beanpole? Or do you still not have the 'interest' to back up a call for 20% pay cuts across the board with an explanation of your rationale?


 

I'll take it that you don't have the answer then?


----------



## orka

liaconn said:


> Beanpole
> 
> You keep banging on about a 20% pay cut across the board but, when asked, refuse to explain how you came up with this figure. For instance why the same percentage across the board? Why 20%? Is this in addition to the cuts we have already taken? (and yes, the pension levy is a 'cut'!).
> 
> Its just really hard to take your posts seriously when you just bang out statements with no analysis or explanation.


 


liaconn said:


> You still haven't answered my question re your self proclaimed 'entirely sensible starting point'. If you go back to my post I broke my question down into a few simple stages for you.


 


liaconn said:


> Any chance of an answer to my question, Beanpole? Or do you still not have the 'interest' to back up a call for 20% pay cuts across the board with an explanation of your rationale?


 


liaconn said:


> I'll take it that you don't have the answer then?


Liaconn, any chance you could harangue beanpole with PMs rather than subjecting the rest of us to this squeaky, scratchy broken record?  It's a public discussion forum.  People can make suggestions that they don't have to back up with hard documented peer-reviewed evidence.  Beanpole is well known to be OTT in his comments and views.  He's not going to answer you.  He doesn't have to answer to you for his opinions - just as you don't have to agree with him.


----------



## Caveat

liaconn said:


> I'll take it that you don't have the answer then?


 
In fairness, neither do you or Complainer (to post #122)


----------



## liaconn

Orka

Any chance you'd keep out of it. If Beanpole suggests I should take a 20% pay cut I am PERFECTLY ENTITLED to ask for his rationale. If you don't want to read my posts, feel free not to. But don't tell me when I can and cannot post. Who on earth do you think you are?


----------



## liaconn

Caveat said:


> In fairness, neither do you or Complainer (to post #122)


 
We both answered your post. You may not like our answers, but we answered it.


----------



## Caveat

liaconn said:


> We both answered your post. You may not like our answers, but we answered it.


 
No, neither of you answered the question I asked with a YES or NO.

You appeared to partially agree and Complainer did his usual.

Are you still not willing or able to answer?


----------



## liaconn

You put two large proposals in the one question and then asked for Yes or No. I agreed with one proposal (overstaffing) and did not agree entirely with the other but thought it was appropriate in some cases and explained this. Why should someone give just a yes or no answer about a matter that is not completely straightforward.


----------



## truthseeker

liaconn said:


> You put two large proposals in the one question and then asked for Yes or No. I agreed with one proposal (overstaffing) and did not agree entirely with the other but thought it was appropriate in some cases and explained this. Why should someone give just a yes or no answer about a matter that is not completely straightforward.


 
Wow - I thought it was a pretty simple yes or no question myself!


----------



## orka

liaconn said:


> Orka
> 
> Any chance you'd keep out of it. If Beanpole suggests I should take a 20% pay cut I am PERFECTLY ENTITLED to ask for his rationale. If you don't want to read my posts, feel free not to. But don't tell me when I can and cannot post.


Wowser!  Of course you can ask him for his rationale but... you asked and he didn't answer.  You asked again and he didn't answer.  So, you asked again and he didn't answer.  So, what the heck, let's ask again.  When will it end?  I actually find your posts generally interesting so I start reading them - but then find the same question again. 


liaconn said:


> Who on earth do you think you are?


I am many things - including being someone who knows that if I ask a question 3 times and don't get a reply, asking a fourth time is unlikely to change the outcome.


----------



## liaconn

Hi Truthseeker

He asked Do you agree that there needs to be substantial cuts made within the public sector either in personnel and/or in pay?" Answering simply Yes implied that yes I agree you should just cut one or the other. My view is 'Yes', cut staffing and 'No' substantial cuts in pay are only appropriate at certain levels. That is why a simple yes or no was not appropriate, in my view.


----------



## truthseeker

liaconn said:


> Answering simply Yes implied that yes I agree you should just cut one or the other.


 
That was exactly my reading of it too. I think the question was not designed to bring out the individual viewpoint - just to ascertain that there was agreement on one of the above?
Perhaps Im wrong, Im late to the thread.....


----------



## liaconn

orka said:


> Wowser! Of course you can ask him for his rationale but... you asked and he didn't answer. You asked again and he didn't answer. So, you asked again and he didn't answer. So, what the heck, let's ask again. When will it end? I actually find your posts generally interesting so I start reading them - but then find the same question again.
> I am many things - including being someone who knows that if I ask a question 3 times and don't get a reply, asking a fourth time is unlikely to change the outcome.


 
Yes, Orka I was trying to make the point that Beanpole is constantly throwing out wild and unfair remarks about the Public Sector and then, when asked to back up or explain these remarks there is usually a silence or another wild post. This is annoying if you are a Public Servant and are constantly reading rubbish about how we all take hundreds of sick days every year, get paid a fortune etc. If he is going to keep making those statements then I am going to keep asking him for back up. A deafening silence implies that he's right and we do skive off, have ridiculously easy jobs etc. because we're not coming back and saying 'that's not true, where did you get that information?'. His refusals to answer and then popping up a couple of days later with another statement pulled out of the air are getting very annoying, so basically I've decided to push him for an answer this time or to admit, by not answering, that he doesn't have one. In other words, ensure that his silence is actually saying something this time.


----------



## liaconn

truthseeker said:


> That was exactly my reading of it too. I think the question was not designed to bring out the individual viewpoint - just to ascertain that there was agreement on one of the above?
> Perhaps Im wrong, Im late to the thread.....


 
Well, the point I was trying to make was that I didn't agree that 'I didn't mind whichever they did, either was acceptable.' which I felt a simple 'yes' would imply.


----------



## truthseeker

liaconn said:


> Well, the point I was trying to make was that I didn't agree that 'I didn't mind whichever they did, either was acceptable.' which I felt a simple 'yes' would imply.


 
The original question would have been better posed as 2 questions methinks.


----------



## liaconn

Exactly.


----------



## Caveat

My. God.

It was a question that you answer yes or no to. It can be yes to cuts in staff or cuts in pay or both. That's why I said and/or. Saying yes is not a complete acceptance of all cuts. There is no implication/reading into it or anything like that. Truthseeker got it right in post # 147.

I think Liaconn you are more concerned with being seen as 'hanging yourself' than anything else TBH.


----------



## liaconn

No Caveat, I am concerned with not being misunderstood if I answer a simple yes or no. Certainly, if I was doing up a questionnaire in work prior to introducing a new policy, I would not be allowed phrase the question like you did, but would be made to break it down into two questions, as Truthseeker suggested.


----------



## Caveat

This is beyond ridiculous.

Right.

_*"The public sector - cuts are required."*_

(This is in addition to the pensions levy already in place)

Once again, YES or NO please. 

No need for qualification or ifs or buts or ands at this stage.

(By not being permitted to qualify your answer does not imply that you would or wouldn't prefer to give a more detailed answer...etc etc)

How is that?


----------



## liaconn

Caveat said:


> This is beyond ridiculous.
> 
> Right.
> 
> _*"The public sector - cuts are required."*_
> 
> (This is in addition to the pensions levy already in place)
> 
> Once again, YES or NO please.
> 
> No need for qualification or ifs or buts or ands at this stage.
> 
> (By not being permitted to qualify your answer does not imply that you would prefer to give a more detailed answer...etc etc)
> 
> How is that?


 
Caveat

The answer is YES, it's beyond ridiculous.


----------



## Caveat

liaconn said:


> Caveat
> 
> The answer is YES, it's beyond ridiculous.


 
Oh very clever.

YES it's beyond ridiculous or YES to the statement in my last post?  (as I do believe you are being deliberately evasive)


----------



## peelaaa

They shouldn't be frozen, they should be decreased, only the top earners mind. Too much for too little output.
At least Public workers have a voice unlike the private sector, who just take it up the backside.


----------



## truthseeker

Caveat said:


> Oh very clever.
> 
> YES it's beyond ridiculous or YES to the statement in my last post?


 
Caveat youre just messing now - Liaconn has answered Yes.
She has also stated that her answer to the question requires some qualification for clarity - but on a basic yes/no - its a yes!!


----------



## liaconn

Thank you, Truthseeker.


----------



## Caveat

...and thank you Liaconn.

Now where's the incorrigible Complainer?


----------



## truthseeker

And thank you Caveat


----------



## Caveat

Ah sure thanks then yourself 

I've an idea - what about a big massive private/public sector group hug?


----------



## truthseeker

Caveat said:


> I've an idea - what about a big massive private/public sector group hug?


 
Im in! 

The public sector get a terrible bashing. I think its unfair. I dont believe that people set out to deliberately go into public sector jobs either, you'd swear there was a conspiracy out there where some people secretly decide to go into public sector jobs to annoy people in the private sector!!

And I didnt notice a similar bashfest from the public side when the private sector were cleaning up in the boom years.

Its the government people should direct their frustrations at - not individual workers in the public sector.


----------



## TheBlock

truthseeker said:


> And I didnt notice a similar bashfest from the public side when the private sector were cleaning up in the boom years.
> quote]
> 
> So now were onto private sector cleaning ladies...what are the equivalent PS sector cleaning ladies earning with the DB pensions, not to mention those dame little council vans and the raod sweepers that always seem to pull out in front of me!!


----------



## liaconn

truthseeker said:


> Im in!
> 
> The public sector get a terrible bashing. I think its unfair. I dont believe that people set out to deliberately go into public sector jobs either, you'd swear there was a conspiracy out there where some people secretly decide to go into public sector jobs to annoy people in the private sector!!
> 
> And I didnt notice a similar bashfest from the public side when the private sector were cleaning up in the boom years.
> 
> Its the government people should direct their frustrations at - not individual workers in the public sector.


 
Big Hug!  

Oh, alright, you too Caveat!.


----------



## Purple

truthseeker said:


> And I didnt notice a similar bashfest from the public side when the private sector were cleaning up in the boom years.



That's because it didn't happen. Before the boom the public sector was generally better paid than the private sector. During the boom years the gap  was increasing, not decreasing.  
Benchmarking (round one) came in before the crash, though the writing was on the wall even then, and plenty of us were saying that it was unjustified and would beggar the country in the long run.


----------



## Booter

I normally stay out of these debates, however I'd be interested to know what the 1st round of benchmarking has actually cost, to date. By which I mean, if it had been shelved, how much would the state have "saved" to date?

Anyone?


----------



## Purple

According to [broken link removed] from the Business Post in 2006 it was already costing over a billion a year. So by now it's cost (at a guess) about €5-8 billion.


----------



## truthseeker

Purple said:


> During the boom years the gap was increasing, not decreasing.


 
I dont agree with this - no one I know who works in the public sector matched the tripling salaries I saw around me in the private sector during the boom.


----------



## Caveat

Purple said:


> According to [broken link removed] from the Business Post in 2006 it was already costing over a billion a year. So by now it's cost (at a guess) about €5-8 billion.


 
Hmm.  Well if this guess is in any way accurate it makes Latrade's point...



Latrade said:


> In all the pages of debate on this thread and others, I think all we can say is that it is too difficult to compare the two directly. *I suppose the point would be if it is wrong to compare the two in order to justify pay cuts in the PS/CS, then you have to accept it was wrong to compare the two in order to justify the pay increase in the PS/CS.*


 
...all the more pertinent.


----------



## RonanC

A simple YES answer to a _Are cuts required in the Public Service? _question is very hard to say. The public service is so large and so diversified in what it does for every sector of Irish life, that simply saying cutting wages should apply to all in the public service is a question that cannot be answered with one word.

In saying that though, cuts are required, its as simple as that. We cannot afford to borrow what we currently are, but cuts are required everywhere! 

But *both* Private and Public sectors should see these cuts together. The majority of the private sector have not seen any pay cuts (according to the ESRI), but every public servant has had a Pension Levy imposed on them which is a pay cut in a different name. 

The ESRI has also recently stated that the public service should see further pay cuts of about 10% across the board but at the same time, unemployment benefit levels should be kept as they are. 

Cuts must happen everywhere, at the moment the Public sector is being picked on, its easy to pick on them really. But everyone is being put into this one large box and marked with the same bright coloured pen which states "Public Sector worker - Pay Cut" without looking at what they do for society, what they give, what they contribute to the economy in taxes and other forms of income.


----------



## csirl

What about a bank employees levy? There is a strong case for applying e.g. a 20% levy/tax on all bank employees as to a greater or lesser extent, they all contributed to the banking crisis. Maybe 2% for every full year each individual was employed in banking between the years 1998 and 2008?


----------



## Purple

truthseeker said:


> I dont agree with this - no one I know who works in the public sector matched the tripling salaries I saw around me in the private sector during the boom.


You may not agree with it but it is the case. A quick Google throws this up. I agree that the people who made the biggest killings were in the private sector but taking a broad view the public sector were the biggest winners from the boom.


----------



## Purple

csirl said:


> What about a bank employees levy? There is a strong case for applying e.g. a 20% levy/tax on all bank employees as to a greater or lesser extent, they all contributed to the banking crisis. Maybe 2% for every full year each individual was employed in banking between the years 1998 and 2008?



If the banks can't pay their staff then they should cut wages/ numbers. The same goes for any private sector employer. The same goes for the government.


----------



## csirl

Purple said:


> If the banks can't pay their staff then they should cut wages/ numbers. The same goes for any private sector employer. The same goes for the government.


 
I was thinking more along the lines of making sure everyone who was in the industry that took us down takes some personal pain for their part in the downfall. Money should go to the exchequer and should be levied regardless of whether they are or arent still employed in banking.


----------



## Caveat

RonanC said:


> A simple YES answer to a _Are cuts required in the Public Service? _question is very hard to say. The public service is so large and so diversified in what it does for every sector of Irish life, that simply saying *cutting wages should apply to all in the public service* is a question that cannot be answered with one word.


 
You see now, I never said or implied that. 

It was a very, very simple question (now even more simplified) to which there can easily be a YES or NO answer:

*"The public sector - cuts are required"*


----------



## Purple

csirl said:


> I was thinking more along the lines of making sure everyone who was in the industry that took us down takes some personal pain for their part in the downfall. Money should go to the exchequer and should be levied regardless of whether they are or arent still employed in banking.


 I don't think the foot soldiers in the banks should be punished in some way. If the bank can't pay their wages without borrowing money then that's a different thing


----------



## RonanC

Caveat said:


> You see now, I never said or implied that.
> 
> It was a very, very simple question (now even more simplified) to which there can easily be a YES or NO answer:
> 
> *"The public sector - cuts are required"*


 
Its a simple question alright but one that must be answered and qualified further though.


----------



## Purple

RonanC said:


> Its a simple question alright but one that must be answered and qualified further though.



No, the follow on question; "what cuts are required", needs a long answer. The first one is just "yes" or "no".


----------



## orka

RonanC said:


> ...In saying that though, cuts are required, its as simple as that. We cannot afford to borrow what we currently are, but cuts are required everywhere!
> 
> But *both* Private and Public sectors should see these cuts together. The majority of the private sector have not seen any pay cuts (according to the ESRI), but every public servant has had a Pension Levy imposed on them which is a pay cut in a different name. ....
> Cuts must happen everywhere,


Why must cuts happen everywhere?  If an employer is profitable, forcing a pay cut on the employees out of some warped notion that they must share some pain, that just makes the employer more profitable - doesn't do a whole lot for the economy other than a bit of extra corporation tax.


----------



## VOR

csirl said:


> I was thinking more along the lines of making sure everyone who was in the industry that took us down takes some personal pain for their part in the downfall. Money should go to the exchequer and should be levied regardless of whether they are or arent still employed in banking.


 
OK. Let's nail them all to crosses. Shall we start with the all the bankers from tellers to the top as you have stated, then the developers, engineers, architects, builders including carpenters, electricians, roofers and JCB drivers, property investors, the media, town planners, county councillors for rezoning, NRA for the grid lock, Financial Regulator, every one in the Dept of Finance starting with the tea lady, Dept of the Environment, Dept of Transport, the social partners and the house buyers.

Right, I'll get the nails.  We can then look at the retailers & wholesalers who pushed up margins, the farmers and solicitors. Oh, I almost forgot, the insurance companies! 

Have I covered off every one who played a part in taking us down.


----------



## RonanC

orka said:


> Why must cuts happen everywhere? If an employer is profitable, forcing a pay cut on the employees out of some warped notion that they must share some pain, that just makes the employer more profitable - doesn't do a whole lot for the economy other than a bit of extra corporation tax.


 
So tell me why should those working in the public service be hit with a pay cut? How are they to blame for what has happened? Why should they take the pain? 

Public services like the Fire Service, Gardaí and Nurses do not generate any money but provide an invaluable service to this country had nothing to do with the downfall of our economy, yet they must be hit with a pay cut? And at the same time, as pay cuts are being talked about, the HSE Chief Executive will get a bonus of €70,000? 

Area's such as Revenue, Customs and Motor Tax offices that make huge amounts of money, should the staff in those offices be saved from a pay cut?


----------



## orka

RonanC said:


> So tell me why should those working in the public service be hit with a pay cut? How are they to blame for what has happened? Why should they take the pain?


It's nothing to do with blame.  Their employer (the state) can't afford to pay the current wage bill. So through some combination of job cuts and pay cuts, costs have to be saved.  We are borrowing €400M a week at the moment - that is just unsustainable.


----------



## Firefly

truthseeker said:


> Wow - I thought it was a pretty simple yes or no question myself!


 

Maybe a good one for the poll Brendan is talking about?


----------



## Purple

orka said:


> It's nothing to do with blame.  Their employer (the state) can't afford to pay the current wage bill. So through some combination of job cuts and pay cuts, costs have to be saved.  We are borrowing €400M a week at the moment - that is just unsustainable.



+1
Keep saying it; it might sink in.


----------



## RonanC

orka said:


> It's nothing to do with blame. Their employer (the state) can't afford to pay the current wage bill. So through some combination of job cuts and pay cuts, costs have to be saved. We are borrowing €400M a week at the moment - that is just unsustainable.


 
Orka, I totally agree with you, but, and its a big but, cuts should and must be sought in other areas too. 

Incentivised career breaks could be introduced public service wide, as far as I know they have been so far limited to the Civil Service and the uptake has been slow but nobody was expecting 100's or 1000's to pack up and leave. 

Pay increments could be frozen which would mean that future pay is set at a rate that would not need any further borrowing.

Cutting the pay of 350,000 workers will have an immediate knock on effects, tax take will be down and disposable income will be dramatically hit. You also have the fact that motivation and the morale of all public service workers will be damaged. Cuts must be achieved but they must be fair.


----------



## Latrade

Caveat said:


> You see now, I never said or implied that.
> 
> It was a very, very simple question (now even more simplified) to which there can easily be a YES or NO answer:
> 
> *"The public sector - cuts are required"*


 
Just to be pedantic, it's a statement, not a question.....



orka said:


> It's nothing to do with blame. Their employer (the state) can't afford to pay the current wage bill. So through some combination of job cuts and pay cuts, costs have to be saved. We are borrowing €400M a week at the moment - that is just unsustainable.


 
Very good point. 

I apologise if there are some who have an axe to grind with the PS for whatever justified or misguided opinion. I'm sorry that the media is whipping up the frenzy and blood lust. I'm sorry that maybe you (those in the PS) or your friends or your colleagues are facing a very uncertain period. I really am. 

But the arithmatic fails every time with what we have and what we can afford. 

There are means to bridge this gap and not all relate to pay and job numbers. But what we agree on must be beneficial for the greater good, not personal self interest. If you're a public servant, the greater good is the public.

I wasn't happy to take a pay cut, but then I wasn't happy that it could lead to friends and colleagues losing their jobs. So I signed up. It was the same simple arithmatic, what was comming in wasn't going to match what was going out. 

To come back to the same tiring issue, about comparing private with public, in certain cases we can, in others we can't. But when people say the private sector by and large hasn't taken pay cuts may have missed the numbers on the live register. The CSO figures only include pay cuts for people in employment. Too many have seen 100% pay cut.

But for those employers that haven't seen their *basic* rates cut have made other changes because they've had to, stuff that doesn't get recognised by the CSO. They've done everything they can to not cut pay and to try and keep people in employment. But there has been swift and quick reform.

The important thing is that in the vast majority of cases this has been with the support of employees. They may not have liked it, but ultimately they were able to see the greater good.


----------



## Latrade

RonanC said:


> Cutting the pay of 350,000 workers will have an immediate knock on effects, tax take will be down and disposable income will be dramatically hit. You also have the fact that motivation and the morale of all public service workers will be damaged. Cuts must be achieved but they must be fair.


 
Labour Party Economics: about as much value as a windscreen wiper on a submarine.

Tax take is pretty much at rock bottom as it is. Retail is hit as hard as its ever going to be. People just aren't spending and to be honest, a few more people spending a bit less isn't going to make that big a difference, not in comparison to the savings made immediately off the wage bill.

That's why we'll be having tax reform to address the reliance on retail going hand in hand with the McCarthy Report.


----------



## RonanC

Latrade said:


> a few more people


 
Lets be fair now, 350,000 people is a bit more than just "a few"

And look at where "_Fianna Fail Economics"_ has got us. Borrowing €400m every single week. Amazing


----------



## liaconn

Latrade said:


> a few more people spending a bit less isn't going to make that big a difference, .


 
It will be 350,000 people and their families spending less. Do you really think that's not going to affect shops, restaurants, pubs, hairdressers, taxi drivers, petrol stations, various suppliers to the aforementioned, particulary when some of them are already barely hanging on by their fingernails?


----------



## Shawady

First point.

The government has a plan to reduce the deficit by 16 billion over 5 years.
Why not estimate how much of this is likely to come as tax and how much as spending cuts. Say 25% increase taxes against 75% spening cuts.
That leaves 12 billion of spending cuts so as PS wage bill is 1/3 of all spending it would be reasonable to look for cuts of 4 billion. Is this possible over 5 years - I think so. What would it represent? Roughly 10% cut in salary and 10% cut in numbers?
One of the factors that is leading to redcued spending IMO is the uncertainty out there because the government does not seem to have a plan.

Second point.

As a civil servant, I think I would like to see pay increases in the private sector. More income tax for the government which will lead to increase revenue and less spending cuts required.


----------



## csirl

Would it be correct to say that a pure flat rate income tax of 25% - no exemptions, no credits - would clear the deficit and leave cash to spare? To me this is the most painless way of doing it and would be popular with most PAYE workers.


----------



## S.L.F

orka said:


> Liaconn, any chance you could harangue beanpole with PMs rather than subjecting the rest of us to this squeaky, scratchy broken record? It's a public discussion forum. People can make suggestions that they don't have to back up with hard documented peer-reviewed evidence. Beanpole is well known to be OTT in his comments and views. He's not going to answer you. He doesn't have to answer to you for his opinions - just as you don't have to agree with him.


 
I would normally agree with what you said but this thread was started by Beanpole so I believe he should answer the questions put to him.

I also have asked him questions but he has not answered them.


----------



## Firefly

RonanC said:


> Lets be fair now, 350,000 people is a bit more than just "a few"
> 
> And look at where "_Fianna Fail Economics"_ has got us. Borrowing €400m every single week. Amazing


 

..to pay for things we can't afford !!!


----------



## Latrade

liaconn said:


> It will be 350,000 people and their families spending less. Do you really think that's not going to affect shops, restaurants, pubs, hairdressers, taxi drivers, petrol stations, various suppliers to the aforementioned, particulary when some of them are already barely hanging on by their fingernails?


 
But as we keep being told, a fair percentage of those will be from natural wastage. What percent exactly: I don't know. All I know is that in previous discussions it has been mentioned that NW alone will give signficant savings.

However, tax will be reformed so it isn't such a big hit on VAT etc. But the revenue from VAT just doesn't come near (and thus the possible loss from the redundancies) the gap in the public expenses. It will be a hit yes, but not as big a hit as we're taking on the public finances. 

And it's not to say it's a percentage across the board from all levels. At this stage, this is an assumption. If it were me, I'd assume it to be on the basis of most similar redundancy packages where the package is geared to be more attractive to those nearing, or withing earshot of retirement age. How many would that account for?

There will have to be strategic redundacies where the role just isn't needed. First, that has to happen anyway and it is a hit the PS is going to have to take. Those roles cannot be justified. Last, it is the PS unions claiming this means less nurses etc, when there is no indication that this will be the case.

Plus, do we honestly think there won't be a generous redundancy package?

Pay cuts can help avoid some of this, but not all cases. I take no delight in seeing people lose their jobs. I take no pleasure in anyone getting a pay cut. But when it really is down to bankrupting the country or not, for me the greater good is the only reasonable argument we have.


----------



## MOB

I should say perhaps qualify earlier comments.   I do not believe that - in an ideal world where all options can be explored -  pay cuts are the only way to achieve the required reduction in the cost of the public sector wage bill.  

Wholesale layoffs would work too.   

There are LOTS of people in Planning Offices, Land Registry, Revenue, Health and Safety Authority etc. who are already faced with a hugely reduced workload.  

There are LOTS of employees in other services where we may just have to decide we can no longer afford to enjoy public services at the levels we have previously enjoyed.

We have nibbled at the edges of this issue in reducing the numbers of 'temporary' teachers and such like.   My difficulty is that I have absolute zero confidence in the ability of the public sector to introduce wide-scale redundancies on a 'statutory redundancy only' cost basis.   If I thought that there was any realistic prospect of wide-scale layoffs being pushed through, I would certainly take this option as part of the solution.   Given my belief that such wide-scale layoffs are utterly impossible, or can only be done at a cost that would make our public debt even worse, what are we left with?


----------



## mf1

RonanC said:


> And look at where "_Fianna Fail Economics"_ has got us. Borrowing €400m every single week. Amazing



I find this so depressing: tacked onto "we didn't cause it, we shouldn't have to take a pay cut............

Look, lads, I didn't cause it either but my drop in income as a solicitor didn't stop when it hit the floor - nope, it just kept going down. 

We cannot afford to run the country the way it has been run and continues to run. The pain will hit everyone - there cannot be exceptions for anyone who didn't cause the problem. 

And the worst part is that I still don't believe the message has gotten home to way too many people.

mf


----------



## Purple

Agree 100% with the last three posts


----------



## BeanPole

Purple said:


> Agree 100% with the last three posts


 
+1

The problem is that our discussion matters not one whit - the Government do not have the bottle to make the sort of cuts required. 

An alternative administration, including the Labour party, would be far far worse.

... and so we will continue to slide deeper from recession into depression.

One of the constitutional factors that needs to be addressed is our electoral system. STV PR has led us into the position of a very weak government, unwilling to take hard decisions to upset the unions, the farmers, the bankers, or pretty much anyone else.


----------



## Complainer

mf1 said:


> I find this so depressing: tacked onto "we didn't cause it, we shouldn't have to take a pay cut............
> 
> Look, lads, I didn't cause it either but my drop in income as a solicitor didn't stop when it hit the floor - nope, it just kept going down.
> 
> We cannot afford to run the country the way it has been run and continues to run. The pain will hit everyone - there cannot be exceptions for anyone who didn't cause the problem.
> 
> And the worst part is that I still don't believe the message has gotten home to way too many people.


This is quite patronising. Don't assume that because you are not hearing the answer you want, people 'dont get it'. Many of those people do 'get it' and have offered different answers and solutions. 


MOB said:


> I should say perhaps qualify earlier comments.   I do not believe that - in an ideal world where all options can be explored -  pay cuts are the only way to achieve the required reduction in the cost of the public sector wage bill.
> 
> Wholesale layoffs would work too.
> 
> There are LOTS of people in Planning Offices, Land Registry, Revenue, Health and Safety Authority etc. who are already faced with a hugely reduced workload.
> 
> There are LOTS of employees in other services where we may just have to decide we can no longer afford to enjoy public services at the levels we have previously enjoyed.


Don't the Land Registry have years of backlogs on hand to catch up on? I've no idea why you think the HSA have a reduced workload - their work was always on a sampling basis, so they never got to inspect every building site or every farm. Given the cutbacks that many public and private business are making in their own H&S staff, I'd have thought that the HSA will have more than enough productive work to keep them going. Every local authority planning office is currently rewriting their county development plan, which defines their planning policy for the next decade or so. These guys aren't sitting round scratching their asses.

I think those who propose cuts in public services have a duty to be reasonably specific about which services they propose to cut back.


Latrade said:


> Tax take is pretty much at rock bottom as it is. Retail is hit as hard as its ever going to be. People just aren't spending and to be honest, a few more people spending a bit less isn't going to make that big a difference, not in comparison to the savings made immediately off the wage bill.


Famous last words...




Latrade said:


> There are means to bridge this gap and not all relate to pay and job numbers. But what we agree on must be beneficial for the greater good, not personal self interest. If you're a public servant, the greater good is the public.


Indeed, the greater good is down to the public - who are (and the hint comes in the name) the users of public services. There are those who (very quietly) are quite happy to see public services being cut, because they will be jumping in at the chance to offer these services, at a price of course. This is the privatisation agenda, led by Mary Harney, and followed enthusiastically by many others.



Latrade said:


> To come back to the same tiring issue, about comparing private with public, in certain cases we can, in others we can't. But when people say the private sector by and large hasn't taken pay cuts may have missed the numbers on the live register. The CSO figures only include pay cuts for people in employment. Too many have seen 100% pay cut.


Indeed, many in the public sector have had their 100% pay cut - including just about all contract staff, many of whom were in essential roles.



Latrade said:


> But for those employers that haven't seen their *basic* rates cut have made other changes because they've had to, stuff that doesn't get recognised by the CSO. They've done everything they can to not cut pay and to try and keep people in employment. But there has been swift and quick reform.
> 
> The important thing is that in the vast majority of cases this has been with the support of employees. They may not have liked it, but ultimately they were able to see the greater good.


And indeed this kind of reorganisation has already been taking place right across the public sector - the private sector don't have a monopoly on quick & swift reform.


orka said:


> Why must cuts happen everywhere?  If an employer is profitable, forcing a pay cut on the employees out of some warped notion that they must share some pain, that just makes the employer more profitable - doesn't do a whole lot for the economy other than a bit of extra corporation tax.


I don't think anyone has suggesting forcing job cuts on the private sector. However, there are real options out there to balance our budget by increasing income and other taxes. That's the beauty of income tax - those who earn will pay, those who are earning less, pay less.



Caveat said:


> No, neither of you answered the question I asked with a YES or NO.
> 
> You appeared to partially agree and Complainer did his usual.
> 
> Are you still not willing or able to answer?



Have you stopped beating your wife yet, Caveat - YES or NO?

As you've just realised, there are some questions that can't be answered with a YES or NO. I answered your question clearly.



Caveat said:


> Now where's the incorrigible Complainer?


Sorry for the delayed response. That pesky inconvenience of public service sometimes causes temporary interruptions in my AAMing (unlike many of those who claim to be overworked and overstressed in the private sector).


----------



## DerKaiser

csirl said:


> Would it be correct to say that a pure flat rate income tax of 25% - no exemptions, no credits - would clear the deficit and leave cash to spare? To me this is the most painless way of doing it and would be popular with most PAYE workers.



That would be very hard on low income families and a needless concession to higher earners.  

I agree that exemptions and credits should be justified now more so than ever.


----------



## BeanPole

DerKaiser said:


> That would be very hard on low income families and a needless concession to higher earners.
> 
> I agree that exemptions and credits should be justified now more so than ever.


 
+1

A number of Eastern European countries toyed with flat taxes and failed.

One of the basic cannons of taxation is that taxes should be progressive. A flat rate of tax ends up hurting the poor at the expense of the wealthy.

While I agree that taxes shouldn't rise for the higher rate payers in this country, being one myself, I don't think it would be fair for them to come down either.

The way to reduce the deficet is to substantially reduce spending whilst not impacting front line services, through reduced public sector pay rates, and substantial reductions in welfare payments. 

I would suggest that we reduce such payments to an equivalent level to those in the UK, which has recently started to see unemployment falls due, in no small part I would guess, to lower costs and a more flexible economy.


----------



## DerKaiser

Complainer said:


> There are those who (very quietly) are quite happy to see public services being cut, because they will be jumping in at the chance to offer these services, at a price of course. This is the privatisation agenda, led by Mary Harney, and followed enthusiastically by many others.



You make privatisation sound dirty!


----------



## BeanPole

There is so much else left to privatise in this country:

Large parts of RTE - speficically Network 2, 2FM, the Montrose land bank
Dublin bus
Some or all of Bord Gais, ESB, and An Post
Fás International Consultancy (!!!)

Thanks to goodness, we flogged off Eircom and Aer Lingus when we did. Could you imagine some gobsheen of a minister trying to deal with the unions there?


----------



## Booter

BeanPole said:


> There is so much else left to privatise in this country:
> 
> Large parts of RTE - speficically Network 2, 2FM, the Montrose land bank
> Dublin bus
> Some or all of Bord Gais, ESB, and An Post
> Fás International Consultancy (!!!)
> 
> Thanks to goodness, we flogged off Eircom and Aer Lingus when we did. Could you imagine some gobsheen of a minister trying to deal with the unions there?


Selling the state's telecoms infrastructure was one of the most ridiculous and shortsighted privatisations ever. Our broadband is a joke and will remain so, as the state has absolutely no power to enforce its full roll-out. This would have been akin to selling off the ESB before delivering electricity to all houses in the country. The private sector is motivated by profit and therefore will never deliver services to people simply because those people need the services. 
That's the state's job, and it failed miserably when it sold off Eircom.


----------



## BeanPole

There are a whole load of semi-states that we could close or merge tomorrow.

How many tourism, fishery protection, or training semi-state bodies does a small country need?

Anything protecting a sole industry should be paid for by the industry themselves. 

My list for closure / merger candidates are:


An Bord Bia
An Bord Glas
An Chomhairle Ealaíon (The Arts Council)
Area Development Management Limited
Bord na gCon
Bord na Leabhar Gaeilge
Campus and Stadium Ireland Development Limited
Central Fisheries Board
CERT
Eastern Regional Fisheries Board
Horse Racing Ireland
Ireland-US Commission for Educational Exchange
Irish National Stud Company
National Milk Agency
Northern Regional Fisheries Board 
North Western Regional Fisheries Board
Southern Regional Fisheries Board 
South Western Regional Fisheries Board 
Údarás na Gaeltachta
Western Development Commission 
Western Regional Fisheries Board 
 


Also, do we really need Forfas, IDA, and Enterprise Ireland all running as separate bodies?

Do we need both the National Archives and the National Archives Advisory Council? 

Or both an Information Commissioner and Information Society Commission?

Both the CSO, and the National Statistics Board?

Both the National Economic and Social Council and the National Economic and Social Forum?

If you closed half of these quangos, it would save millions. I'm not saying that all of these closures or mergers are feasible, but that they merit consideration before we start cutting front line services or raising taxes.


----------



## BeanPole

DerKaiser said:


> You make privatisation sound dirty!


 
I find that statement strangely arousing ...


----------



## BeanPole

Indiansign said:


> Selling the state's telecoms infrastructure was one of the most ridiculous and shortsighted privatisations ever. Our broadband is a joke and will remain so, as the state has absolutely no power to enforce its full roll-out. This would have been akin to selling off the ESB before delivering electricity to all houses in the country. The private sector is motivated by profit and therefore will never deliver services to people simply because those people need the services.
> That's the state's job, and it failed miserably when it sold off Eircom.


 
And you really think that the old Dept of Posts & Telegraphs would have done better?


----------



## Protocol

I think it is a fair point that a privatised Eircom has not made substantial capex investment in the network.

Perhaps the solution is a state-owned network, but with plenty of private operators using the network (like roads).

Is this off-topic?


----------



## Protocol

BeanPole said:


> +1
> 
> While I agree that taxes shouldn't rise for the higher rate payers in this country, being one myself, I don't think it would be fair for them to come down either.


 

Tax rates need to come down, but tax revenues need to go up, by abolishing tax reliefs, esp pension tax relief.

*Why give a tax incentive for something that we should all be doing?*


----------



## becky

I love this thread. The national milk agency! Milk! Wonder if any posters here work there.


----------



## BeanPole

Mooo !


----------



## BeanPole

Protocol said:


> Tax rates need to come down, but tax revenues need to go up, by abolishing tax reliefs, esp pension tax relief.
> 
> *Why give a tax incentive for something that we should all be doing?*


 

Agreed in principle, but I don't think we should cut off pension relief completely, as it might act as a disincentive for saving for retirement. Perhaps it should be capped at a certain level of contibutions, perhaps €2k per annum, so that low earners are not penalised.

Certainly, now that interest rates have gone through the floor this is the time to reduce or eliminate mortgage interest and rent relief.


----------



## Purple

Complainer said:


> There are those who (very quietly) are quite happy to see public services being cut, because they will be jumping in at the chance to offer these services, at a price of course. This is the privatisation agenda, led by Mary Harney, and followed enthusiastically by many others.


 What a load of groundless, paranoid, Marxist rubbish. You sound like a British Leyland union official from the 1960’s.


----------



## Complainer

BeanPole said:


> There are a whole load of semi-states that we could close or merge tomorrow.
> 
> How many tourism, fishery protection, or training semi-state bodies does a small country need?
> 
> Anything protecting a sole industry should be paid for by the industry themselves.
> 
> My list for closure / merger candidates are:
> 
> 
> An Bord Bia
> An Bord Glas
> An Chomhairle Ealaíon (The Arts Council)
> Area Development Management Limited
> Bord na gCon
> Bord na Leabhar Gaeilge
> Campus and Stadium Ireland Development Limited
> Central Fisheries Board
> CERT
> Eastern Regional Fisheries Board
> Horse Racing Ireland
> Ireland-US Commission for Educational Exchange
> Irish National Stud Company
> National Milk Agency
> Northern Regional Fisheries Board
> North Western Regional Fisheries Board
> Southern Regional Fisheries Board
> South Western Regional Fisheries Board
> Údarás na Gaeltachta
> Western Development Commission
> Western Regional Fisheries Board
> 
> 
> 
> Also, do we really need Forfas, IDA, and Enterprise Ireland all running as separate bodies?
> 
> Do we need both the National Archives and the National Archives Advisory Council?
> 
> Or both an Information Commissioner and Information Society Commission?
> 
> Both the CSO, and the National Statistics Board?
> 
> Both the National Economic and Social Council and the National Economic and Social Forum?
> 
> If you closed half of these quangos, it would save millions. I'm not saying that all of these closures or mergers are feasible, but that they merit consideration before we start cutting front line services or raising taxes.


On the Forfas, IDA, EI question, perhaps you might ask whichever genius (private sector) consultant recommended splitting up the old IDA in the early 90's. They were one body up to that time, but the consultants recommended splitting up.

On many of the others, mergers/combinations have already happened or are already in progress, so you might want to check out your facts and then repost.


----------



## Purple

Complainer said:


> On the Forfas, IDA, EI question, perhaps you might ask whichever genius (private sector) consultant recommended splitting up the old IDA in the early 90's. They were one body up to that time, but the consultants recommended splitting up.
> .


And with good reason; there is are clear conflicts of interest between the IDA and Enterprise Ireland (as well as many synergies). 

I work closely with Enterprise Ireland and my experience of them, as with other state agencies, is that there are excellent individuals at mid-level ranks but there is a serious lack of competence at a senior level. All decisions above the very basic level have to be made by the collective. This  means that decisions are not made at all or are made far too late. Things that would happen in hours in the SME sector take weeks or months in the public sector. The net result is that the skills, experience and  talents of good people are wasted and their enthusiasm and drive is sapped away. Sided with that they have to work with the wasters who know that they can’t be sacked and just put in the hours but do as little as possible... It must be a very frustrating job for people who genuinely want to do some good.


----------



## Shawady

Latrade said:


> But as we keep being told, a fair percentage of those will be from natural wastage. What percent exactly: I don't know. All I know is that in previous discussions it has been mentioned that NW alone will give signficant savings.


 
Latrade, there was a report in the paper at the weekend that the embargo this year has reduced the the numbers by over 3,500, a 1% reduction. This may not see like a lot but it is not for a full year. I know in my own department there is a lot more retirements this year than last year. I would be interested to see how much the government has reduced the numbers by the end of 2010.
The government should be able to predict how many people in the public sector are due to retire in the next 5 years. I think they could then set some sort of broad target eg. only 1 in 3 jobs will be replaced. In a previous discussion someone suggested that on average 2.5% of people retire every year, which would mean 12.5 % of total staff. If the goverment replaced 1/3 of these this would still result in an 8% reduction.

Alternatively, they could replace 'front line' jobs but put a complete embargo on admin jobs and introduce flexibility between the public sector and civil service. Therefore, when admin jobs are lost in the civil service people from the HSE for example could be moved into these position i.e move people to priority areas rather than take on new staff.

I'm not suggesting this can be the only tool to reduce the PS bill but reducing numbers by natural wastage over their 5 year plan should be looked at.


----------



## Latrade

Complainer said:


> Famous last words...


Uh? It’s just based on common sense and simple arithmetic. First, the cuts won’t be as excessive or at the numbers suggested. Looks good on paper, gets good headlines stating so many hundreds of thousands will be out of a job. But that just won’t be the case.

As already stated, the focus will be those at or near retirement age initially and other voluntary redundancies. How do I know this? Because that’s how most employers handle larger scale redundancies, it’s the easiest and most just way. And why do employers do it, again the short term loss of the usually generous redundancies is quickly gained in the medium to long term (sometimes in the same accounting year) savings on payroll and other employment costs (pensions etc). 

So most of those who will be out of a job, will be moderately comfortable and live the life of any usual retiree.

How many others need to be let go will come down to the will of the government. I get the impression there is will for reform with a long term view of sustainability. So those jobs that offer no value to the public service provided will have to go. I’m no hard line capitalist, but then my bleeding heart pinko nature doesn’t stop me being disgusted at working my ar*e off to shoulder colleagues who I know offer no value or productivity in my workplace. 

I’m sorry but comradeship has limits. And I don’t see how anyone can defend the indefensible, especially when it is mine and your taxes that pays for these people. They exist, we all know it. Why should they be supported?

Ultimately, these few will make little dint in the VAT or other tax intake. As I say nothing in comparison to the current deficit. 

It’s utter nonsense to suggest that it’s only the public sector propping up the economy and spending money, because that is the implication with the stupidity of Labour Party Economics. 




Complainer said:


> Indeed, the greater good is down to the public - who are (and the hint comes in the name) the users of public services. There are those who (very quietly) are quite happy to see public services being cut, because they will be jumping in at the chance to offer these services, at a price of course. This is the privatisation agenda, led by Mary Harney, and followed enthusiastically by many others.


 
Yes and again your argument has no basis. It’s another tabloid view that loss of jobs means loss of front line staff and services. Let me spell it out again. The reform and cuts are to look to decrease the unit cost *of the same service*. It’s your assumption that less administrators means a poorer service. It’s your assumption that less managerial grades means poorer service.

Nothing to do with privatisation again that’s your red herring. It’s to do with first a public service we can afford and an efficient public service. Not a lower service, a better one.




Complainer said:


> And indeed this kind of reorganisation has already been taking place right across the public sector - the private sector don't have a monopoly on quick & swift reform.


 
Oh come on. I think it’s rich that the accepting such things as performance review shows how understanding the PS/CS has been. As I remember the unions were apoplectic at the time at the very thought of performance reviews. In fact I distinctly remember one official publically stating that it is unthinkable that a public servant would not be promoted if their review showed they were incompetent. 

Every single attempt at reform has been met with the heaviest resistance, industrial action and threats of industrial action. To try and pretend that the PS calmly acquiesced to these (completely ineffective) measures is slight tinkering with history. It’s like the British claiming that they acquiesced to Ireland’s request to be Independent and skipping the rather big bit before that.




Complainer said:


> I don't think anyone has suggesting forcing job cuts on the private sector. However, there are real options out there to balance our budget by increasing income and other taxes. That's the beauty of income tax - those who earn will pay, those who are earning less, pay less.


 
I do wonder where your economic theories come from. But first, why should the books be balanced by further taxes when it is all too clear that the PS is too expensive? Are you seriously suggesting that we hit people again for more tax just to support the cushie benchmarking scheme? 

Second, increasing the taxes for everyone will have the exact impact it is falsely claimed redundancies in the public sector will have. Taxing everyone will hit retail and tax intake even harder. However, the a few thousand PS redundancies won’t. It’s a matter of scale, in your model we have 2 million people who already aren’t spending and already have no confidence as consumers (for example figures for retail this September are actually worse than last year, and last September is when it really went belly up). The idea that taking more money off them is going to bridge the gap wouldn’t even enter the head of a junior cert business studies class.

But the economic loss from PS redundancies is minimal and very quickly recouped not only in payroll savings but in a cut down in borrowing and therefore less debt. 

That’s what we mean by the greater good.


----------



## Latrade

Shawady said:


> Latrade, there was a report in the paper at the weekend that the embargo this year has reduced the the numbers by over 3,500, a 1% reduction. This may not see like a lot but it is not for a full year. I know in my own department there is a lot more retirements this year than last year. I would be interested to see how much the government has reduced the numbers by the end of 2010.
> The government should be able to predict how many people in the public sector are due to retire in the next 5 years. I think they could then set some sort of broad target eg. only 1 in 3 jobs will be replaced. In a previous discussion someone suggested that on average 2.5% of people retire every year, which would mean 12.5 % of total staff. If the goverment replaced 1/3 of these this would still result in an 8% reduction.
> 
> Alternatively, they could replace 'front line' jobs but put a complete embargo on admin jobs and introduce flexibility between the public sector and civil service. Therefore, when admin jobs are lost in the civil service people from the HSE for example could be moved into these position i.e move people to priority areas rather than take on new staff.
> 
> I'm not suggesting this can be the only tool to reduce the PS bill but reducing numbers by natural wastage over their 5 year plan should be looked at.


 
Shawady, I agree and I don't think many wouldn't. But there is the issue of a larger reform that is need to give a better, efficient service for less. This can't be completely worked through natural wastage. But I agree that the bulk of the losses will naturally come from those at or near retirement age.

Do we have a couple of years? To be honest: yes. Given other aspects going on, such as a reduction in the Live Register, the actual savings needed before in the short term are less that previously thought. However, it is still the government's plan to eventually reduce the cost of the PS and so there will be a medium term look at how this can be achieved through retirements etc.


----------



## csirl

BeanPole said:


> +1
> 
> A number of Eastern European countries toyed with flat taxes and failed.
> 
> One of the basic cannons of taxation is that taxes should be progressive. A flat rate of tax ends up hurting the poor at the expense of the wealthy.
> 
> While I agree that taxes shouldn't rise for the higher rate payers in this country, being one myself, I don't think it would be fair for them to come down either.
> 
> The way to reduce the deficet is to substantially reduce spending whilst not impacting front line services, through reduced public sector pay rates, and substantial reductions in welfare payments.
> 
> I would suggest that we reduce such payments to an equivalent level to those in the UK, which has recently started to see unemployment falls due, in no small part I would guess, to lower costs and a more flexible economy.


 
????? It would be more true to say that a lot of Eastern European countries have toyed with a flat rate tax and found it to be an overwhelming success - exceeding all their expectations. 

A flat rate tax is progressive - remember its a *%*, so those who earn more *DO* pay more. I am not proposing a lump sum tax where every citizen is billed exactly the same amount.

As our minumum wage is more than 25% above the SW rates, it cannot be argued that taxing everyone at this rate would lead to some people not having enough to live on. Every worker, not matter how badly paid, would still take home more than someone on SW. As we all know, our SW rates are extremely generous.

A flat rate tax is the fairest way - hits everyone in direct proportion to their earnings. Doesnt penalise people for working harder. Is low enough that people are more willing to pay it. And is less complex to administer, thus saving the Government costs.


----------



## Caveat

Complainer said:


> Have you stopped beating your wife yet, Caveat - YES or NO?


 
 I honestly thought a hoary old chestnut of an example like this would be beneath you but maybe not. 

If you really think that any similarities can be drawn between my question and the above then I give up.



> ...there are some questions that can't be answered with a YES or NO.


 
Of course there are - but mine isn't one of them.



> I answered your question clearly.


 
Of course you didn't.  Do you want to try again? 
There is a second more simplified statement (as answered by Licaonn) if you like.


----------



## csirl

We dont need an across the board public sector pay cut. We may need to cut the pay of a percentage of public sector workers by various amounts, but an across the board one shoe fits all approach is wrong.

What we do need is redundancies. We need to examine what services we require and to what extent we require them. What is certain is that a lot of non-essential services should and probably will have their funding withdrawn. So there should be compulsory redundancies of staff who are surplus to requirements because we can't afford to retain the particular services they are delivering or the services are reduced. In summary, those staff you do need - pay them what they're worth. Those you dont need, get rid. 

The one area where there is enormous scope for reducing public service costs is the health service. We currently have the worst case scenario from a VFM point of view - a private sector monopoly which has passed IR and employment risks to the Government. Health providers should be forced to tender for business, deal with their own HR issues and should only be paid for work actually done.


----------



## Latrade

csirl said:


> ????? It would be more true to say that a lot of Eastern European countries have toyed with a flat rate tax and found it to be an overwhelming success - exceeding all their expectations.
> 
> A flat rate tax is progressive - remember its a *%*, so those who earn more *DO* pay more. I am not proposing a lump sum tax where every citizen is billed exactly the same amount.
> 
> As our minumum wage is more than 25% above the SW rates, it cannot be argued that taxing everyone at this rate would lead to some people not having enough to live on. Every worker, not matter how badly paid, would still take home more than someone on SW. As we all know, our SW rates are extremely generous.
> 
> A flat rate tax is the fairest way - hits everyone in direct proportion to their earnings. Doesnt penalise people for working harder. Is low enough that people are more willing to pay it. And is less complex to administer, thus saving the Government costs.


 
Out of interest, which Eastern European countries have found it an ovewhelming success?

Lithuania's is too early to call. Much of the benefits there can easily also be attributed to the effects of migration. First, this cut unemployment rates dramatically, lowering all the necessary welfare payments etc. Then due to a labour shortage wages have increased considerably, so there's naturally more tax revenue. Simply, it's too early to say whether Flat Tax is the driver.

Estonia is the more widely used model, but again other factors are important. VAT is increased significantly (disproportionate to the flat tax). But as they've gone on and had to tinker with the system (deductions, relief, etc) it's fair to argue that it's no longer a pure flat tax. In addition, it's doubtful how much longer it can be sustained and outside of the rich-right, the public really aren't happy with it.

So it's true that many have seen an increase in tax intake, a drop in unemployment, a drop in tax evasion and an increase in GDP. But these aren't just down to flat tax.

Flat tax only appears fair on paper. Progressive taxes are pretty much accepted as the fairest system among both left and right economists. The simple analogy is take a person on the breadline and another in a well paying job. 25% off the last €100 of the poorer person is much more hard hitting that 25% off the last €100 of the more prosperous person.

But the biggest problem is trying to simplify a system (taxation) that is not simple. Flat Tax would imply that the rate is the rate no matter what. For business this would be difficult, they have to have some deductions for various expense. If they can't, then they'd have to up their fees by the tax rate to cover this (e.g. immediately costs go up by 25%). 

Do we also have expections for those on the breadline? It's a flat rate, so we can't. So not only are they now paying more tax, but because business can't make deductions, the poorer people with less money are now paying more for goods and services.

I like the idea of the simplicity and general appearance of fairness, but this is all on paper. Most models have effectively become progressive tax in all but name. And really as much as we would like, tax just does not lend itself to too much simplification.


----------



## Shawady

Is the real problem with taxation that too many people do not pay any income tax? I think there is around 600,000 low earners that do not pay any income tax.
Should all workers as a matter of principle pay income tax even if it is only €10 or €20 a week?


----------



## csirl

> For business this would be difficult, they have to have some deductions for various expense. If they can't, then they'd have to up their fees by the tax rate to cover this (e.g. immediately costs go up by 25%).


 
We're talking about personal taxes only here.

The business issues you raise are red herrings. Business in Ireland already has a flat rate tax - 12.5%. Its levied against profits. This flat rate tax is the biggest success ever in our tax system. Are you suggesting that we should introduce progressive taxation for businesses?


----------



## Caveat

Shawady said:


> Should all workers as a matter of principle pay income tax even if it is only €10 or €20 a week?


 
Yes, I think so anyway.


----------



## DerKaiser

Caveat said:


> Yes, I think so anyway.


 
We switched emphasis from taxing the lower paid through income taxes to taxing them through indirect taxes.

We'd need to look at indirect taxes (VAT & Excise duties), minimum wages, taxation of low incomes and social welfare levels as part of a bigger ideology.

For example we could knock a few % off VAT (costing €1.5bn), a few % off social welfare (saving €0.75bn) and bring an extra €1500p.a. into the tax net for each individual (raising €0.75bn @ 25% rate).

This might create an extra incentive to spend whilst having no detriment on encouragement to work


----------



## Latrade

csirl said:


> We're talking about personal taxes only here.





csirl said:


> The business issues you raise are red herrings. Business in Ireland already has a flat rate tax - 12.5%. Its levied against profits. This flat rate tax is the biggest success ever in our tax system. Are you suggesting that we should introduce progressive taxation for businesses?




Yes but in order to simplify a tax system that equates to being tax neutral it would affect business. Simply, because the bulk of the tax burden at the moment is on higher earners, the flat tax system shifts this down. Middle income are still hit, but lower income is now hit and higher income pays less.

However, the loss in revenue from a lower tax rate on higher income would be significant, basically would mean the deficit gets bigger. Simplified example:

I'm on 10K and now have to pay 25%. Flat tax means no deductions, and only on income. So the state mow gets €2,500 it didn't have before. But I'm on 100K and paying around 42% currently. That's €42K for the state. I'm now taxed at 25% and that's €25K, a loss of €18K. Add in the new tax on the lower income person and I'm still down.

So you simplify the tax on one hand, but increase the deficit, so you have to find the taxes from elsewhere. 

If you'd provided any examples of where flat tax had been an overwhelming success purely as a result of taxing. You'd find that their systems are not only balanced by either much higher VAT or Corporation Tax, but that they also apply flat tax principles to business. It's all or nothing to make it work. So my example (not rule) regarding business is relevant in the context of you claiming Eastern Europe is rolling in dosh. If you want to use them as an example of the success then you must consider their entire system and not just the bits you like (which is the real red herring in this discussion).

Your also assuming that business problems only equate to large companies. In fact it would be a benefit for them as it would mean less red tape, less tax advisors etc. But the SME and self-employed sector is huge here. It wouldn’t be so uncomplicated for them. 

And while the argument may not hold much water or gain much sympathy, but in the context of defending (not you personally, in fact from you previous posts I presume you agree with some cuts in the PS and so this wouldn’t be hypocritical) job cuts, you would effectively end the financial advice sector and legal system. However, the same argument of “greater good” must be applied even in their case.

However, the simple nature of even just a flat tax on income is that the poor pay more and the rich pay less. Also to just have it for income would mean a greater deficit, not a smaller one.


----------



## Firefly

csirl said:


> We're talking about personal taxes only here.
> 
> The business issues you raise are red herrings. Business in Ireland already has a flat rate tax - 12.5%. Its levied against profits. This flat rate tax is the biggest success ever in our tax system. Are you suggesting that we should introduce progressive taxation for businesses?


 
Maybe the 12.5% should only apply to profits from exporting companies, with 20% to others?


----------



## Purple

Firefly said:


> Maybe the 12.5% should only apply to profits from exporting companies, with 20% to others?



Like we used to have before the EU forced us to change it?


----------



## csirl

> I'm on 10K and now have to pay 25%. Flat tax means no deductions, and only on income. So the state mow gets €2,500 it didn't have before. But I'm on 100K and paying around 42% currently. That's €42K for the state. I'm now taxed at 25% and that's €25K, a loss of €18K. Add in the new tax on the lower income person and I'm still down.


 
With any change in taxation, there will be winners and losers. As we all know, those in the high income brackets pay very little tax due to multiple write-off opportunities. My proposal is based on taking the average wage and working out the % tax needed to reach the income tax take the government needs to turn this thing around, so 25% will mean extra income on average. There are 3 important features of a flat rate tax - (i) does not penalise hard work and (ii) ensures that everyone contributes & (iii) easier to understand and administer which helps compliance.

You shouldnt confuse the actual operation of the system with the tax rates applying. Yes there are countries with flat rate taxes that have pitched the rate at the wrong level - either too high or too low - this is a totally different issue to the operation of the tax.


----------



## Latrade

csirl said:


> With any change in taxation, there will be winners and losers. As we all know, those in the high income brackets pay very little tax due to multiple write-off opportunities. My proposal is based on taking the average wage and working out the % tax needed to reach the income tax take the government needs to turn this thing around, so 25% will mean extra income on average. There are 3 important features of a flat rate tax - (i) does not penalise hard work and (ii) ensures that everyone contributes & (iii) easier to understand and administer which helps compliance.
> 
> You shouldnt confuse the actual operation of the system with the tax rates applying. Yes there are countries with flat rate taxes that have pitched the rate at the wrong level - either too high or too low - this is a totally different issue to the operation of the tax.


 
So are there any countries that run a perfect model and it is shown that their success is down to flat tax?

Again, the problem with the proposal is that this optimum rate can't be achieved. You either have to have some form of weighting, ergo not flat tax, or it means a considerable amount of tax for the poorer people. That gap between what their introduction into the tax system would give against what you lose from taxation of higher earners cannot be bridged. Flat tax on income alone would give a higher deficit.

You're right, it is simpler overall on paper. But you end up with a system that is overall just as complicated as you try to adjust for the loss of revenue. 

The "work harder" idea is all well and good when it is being said (such as Mr Forbes) but there's no proof of this. It makes people want to earn more to end up paying less, but there's a limited number of jobs in those higher pay regions, only so many people can earn that amount. What's more likely is another artificial inflation of wages.


----------



## Shawady

What about a tax system where tax there are different bands, but tax is paid on all income? The 1st bands could be very small.
For example, 5% on first 20K, 10% on 20-40K etc.
Also have no PRSI, just more income tax.


----------



## Latrade

Shawady said:


> What about a tax system where tax there are different bands, but tax is paid on all income? The 1st bands could be very small.
> For example, 5% on first 20K, 10% on 20-40K etc.
> Also have no PRSI, just more income tax.


 
Well an income tax debate has taken away from the thread...but the point is an overall fair tax system. I'm sure there are means of adjusting the current rates, but even though I'm at the higher rate (and would benefit hugely from a flat rate), I honestly think that with a few exceptions they're fair. 

I don't think the exceptions really add up to that much in the big picture when it comes to income tax. 

The issue with taxation is an overall reform of the system such, one that is sustainable and not so vulnerable to downturns in any one specific sector. 

However, as Germany has demonstrated, no economy, no matter how well run, is immune to such significant global downturns.


----------



## Firefly

Purple said:


> Like we used to have before the EU forced us to change it?


----------



## BeanPole

Latrade said:


> Well an income tax debate has taken away from the thread...but the point is an overall fair tax system.


 
+1

The truth is that rebalancing the tax system has to take a back seat to the haemmorrhaging of cash to overgenerous public sector payments and welfare levels.

Until we address the cost base of doing business in this country and the ballooning government deficet, then everything else is re-arranging the deck chairs on the Titanic


----------



## Complainer

Shawady said:


> Alternatively, they could replace 'front line' jobs but put a complete embargo on admin jobs and introduce flexibility between the public sector and civil service. Therefore, when admin jobs are lost in the civil service people from the HSE for example could be moved into these position i.e move people to priority areas rather than take on new staff.


The idea of transferability is indeed important, but to say something like 'no admin jobs' is far too simplistic. There may well be some options to eliminate admin posts through process optimisation and use of technology. There may also be opportunity to eliminate some front line posts through process optimisation and use of technology (did you see the 'robot doctor' on the news yesterday?). This is plenty of scope for improvement right across the public sector, just as there is across the private sector.



Latrade said:


> Uh? It’s just based on common sense and simple arithmetic. First, the cuts won’t be as excessive or at the numbers suggested. Looks good on paper, gets good headlines stating so many hundreds of thousands will be out of a job. But that just won’t be the case.
> 
> As already stated, the focus will be those at or near retirement age initially and other voluntary redundancies. How do I know this? Because that’s how most employers handle larger scale redundancies, it’s the easiest and most just way. And why do employers do it, again the short term loss of the usually generous redundancies is quickly gained in the medium to long term (sometimes in the same accounting year) savings on payroll and other employment costs (pensions etc).
> 
> So most of those who will be out of a job, will be moderately comfortable and live the life of any usual retiree.


It's great that you can speak with certainty about how a programme that hasn't yet been devised will work, and what the impacts will be. Any tips for the 3.15 at Haydock on Saturday?


Latrade said:


> How many others need to be let go will come down to the will of the government. I get the impression there is will for reform with a long term view of sustainability. So those jobs that offer no value to the public service provided will have to go. I’m no hard line capitalist, but then my bleeding heart pinko nature doesn’t stop me being disgusted at working my ar*e off to shoulder colleagues who I know offer no value or productivity in my workplace.
> 
> I’m sorry but comradeship has limits. And I don’t see how anyone can defend the indefensible, especially when it is mine and your taxes that pays for these people. They exist, we all know it. Why should they be supported?


This is nothing to do with comradeship or support. This has to do with public services. Who are these people who have 'no productivity' in the workplace? Who are these people who offer 'no value'? Get down from your high horse with these wild, unsupported generalisations, and let's get some specifics on the table about what organisations you want to 'dissappear'?


Latrade said:


> It’s utter nonsense to suggest that it’s only the public sector propping up the economy and spending money, because that is the implication with the stupidity of Labour Party Economics.


I would indeed be utter nonsense. That's why I never suggested this. It would also be utter nonsense to suggest that putting a chunk of public servants on the dole will not have a direct effect on social welfare payments, medical card costs, rental/mortgage interest allowances and a downstream effect on where there money is currently spent.


Latrade said:


> Yes and again your argument has no basis. It’s another tabloid view that loss of jobs means loss of front line staff and services. Let me spell it out again. The reform and cuts are to look to decrease the unit cost *of the same service*. It’s your assumption that less administrators means a poorer service. It’s your assumption that less managerial grades means poorer service.


 There is no basis for your assumption that there are piles of non-productive administrators or managers waiting to be trimmed off. The OECD report confirms that the Irish public sector is (if anything) understaffed, and is just about catching up on international norms of staffing levels after years of under-resourcing.
[/quote]


Latrade said:


> Oh come on. I think it’s rich that the accepting such things as performance review shows how understanding the PS/CS has been. As I remember the unions were apoplectic at the time at the very thought of performance reviews. In fact I distinctly remember one official publically stating that it is unthinkable that a public servant would not be promoted if their review showed they were incompetent.
> 
> Every single attempt at reform has been met with the heaviest resistance, industrial action and threats of industrial action. To try and pretend that the PS calmly acquiesced to these (completely ineffective) measures is slight tinkering with history. It’s like the British claiming that they acquiesced to Ireland’s request to be Independent and skipping the rather big bit before that.


Shocker - one union official blew his top! Maybe instead of recalling what one public official said on the news one day, you'd like to look at the reality of what is happening on the ground every day right across the public sector. PMDS (or variations of) are standard operating procedure. They aren't perfect, and there is still a lot of learning to do (just as there is in performance management in many private sector bodies), but it is there. To be honest, I wasn't thinking about PMDS in my answer. I was thinking about the kind of restructuring and reallocation of resources that has happened in my organisation and in many others, with some limited impacts on services. 


Latrade said:


> I do wonder where your economic theories come from. But first, why should the books be balanced by further taxes when it is all too clear that the PS is too expensive? Are you seriously suggesting that we hit people again for more tax just to support the cushie benchmarking scheme?


This seems to be one of those things where you try and make people believe something by repeating it often enough. Who decided that the PS is too expensive (certainly not the respected OECD in their recent report)? Who decided that the extra tax is going to support benchmarking and not (just for example) going to NAMA or Anglo-Irish?


Latrade said:


> Second, increasing the taxes for everyone will have the exact impact it is falsely claimed redundancies in the public sector will have. Taxing everyone will hit retail and tax intake even harder. However, the a few thousand PS redundancies won’t. It’s a matter of scale, in your model we have 2 million people who already aren’t spending and already have no confidence as consumers (for example figures for retail this September are actually worse than last year, and last September is when it really went belly up). The idea that taking more money off them is going to bridge the gap wouldn’t even enter the head of a junior cert business studies class.


The benefit of taking money via the tax system is that those who can afford it will pay most. It might mean one less foreign holiday, or holding off on changing the 08 car until 2010 or 2011, or one less apartment purchased in Spain/Czech/Florida, but it does not mean that families will not have enough food on the table. Basic day-to-day spending will largely continue - the 'gravy' off the top might dry up, but much of this goes outside the country anyway.


csirl said:


> What we do need is redundancies. We need to examine what services we require and to what extent we require them. What is certain is that a lot of non-essential services should and probably will have their funding withdrawn. So there should be compulsory redundancies of staff who are surplus to requirements because we can't afford to retain the particular services they are delivering or the services are reduced. In summary, those staff you do need - pay them what they're worth. Those you dont need, get rid.
> 
> The one area where there is enormous scope for reducing public service costs is the health service. We currently have the worst case scenario from a VFM point of view - a private sector monopoly which has passed IR and employment risks to the Government. Health providers should be forced to tender for business, deal with their own HR issues and should only be paid for work actually done.



While I'm not a fan of the current structure or business model of the health service either, I have very little confidence (and I have seen no evidence) that there are substantial numbers of headcount available for cutting in the health service. Who are these people that you believe can be cut without impacting services?



BeanPole said:


> The truth is that rebalancing the tax system has to take a back seat to the haemmorrhaging of cash to overgenerous public sector payments and welfare levels.
> 
> Until we address the cost base of doing business in this country and the ballooning government deficet, then everything else is re-arranging the deck chairs on the Titanic


Nice selective view there. No mention of the impacts of oooh lets say the cost of commercial rents on doing business, or the costs of accountant fees, or the costs of business loans from the banks - it is all the fault of the public sector of course. Mea culpa, mea culpa, mea maxima culpa...


----------



## BeanPole

Complainer said:


> No mention of the impacts of oooh lets say the cost of commercial rents on doing business, or the costs of accountant fees, or the costs of business loans from the banks - it is all the fault of the public sector of course. Mea culpa, mea culpa, mea maxima culpa...


 
All the services you list above are under severe price pressure. I don't know any business owner in the service industry who has not seen their business and profits fall dramatically. Indeed the sectors you identify are those that are hardest hit by job cuts.

I honestly don't think the recession is the fault of the public sector, but unions obstructing fundamental downward changes in labour prices and working practices will cause our country to languish in recession for far longer than we have to.  

Public sector pay and working practice reform is only part of the answer though. Other things, like bloated welfare rates, the minimum wage, cartels amongst the professional classes, and import and trading regulations need to also be addressed to rapidly change the competitive base for generations to come.

Time to change is now. I only hope the government have the neck to make the hard decisions needed. The alternative is very very dark indeed.


----------



## Booter

BeanPole said:


> And you really think that the old Dept of Posts & Telegraphs would have done better?



What does that even mean? 

Are you disputing that selling off the telecoms infrastructure has been a mistake? If so, maybe list out what you see are the reasons, and then maybe people can debate the points you make...

...that's how this is supposed to work.


----------



## Purple

Complainer said:


> This seems to be one of those things where you try and make people believe something by repeating it often enough. Who decided that the PS is too expensive (certainly not the respected OECD in their recent report)? Who decided that the extra tax is going to support benchmarking and not (just for example) going to NAMA or Anglo-Irish?


Line one and line three.... how ironic!


----------



## csirl

> Who are these people that you believe can be cut without impacting services?


 
The book of estimate lists every item of expenditure the Government makes. There are staff, sometimes entire organisations, associated with every line of programme expenditure. There will be programmes cut in the upcoming budget. Therefore the staff who work specifically on these programmes will be surplus to requirements. There will be many other areas where programmes will be reduced in scale thus not needing as many staff as are currently employed.


----------



## Complainer

BeanPole said:


> Other things, like bloated welfare rates, the minimum wage, cartels amongst the professional classes, and import and trading regulations need to also be addressed to rapidly change the competitive base for generations to come.


You forget a few important things off your misguided list - starting with the property prices that our Govt is working hard to keep at artificial levels, to support their friends in the building industry.


----------



## Latrade

Complainer said:


> It's great that you can speak with certainty about how a programme that hasn't yet been devised will work, and what the impacts will be. Any tips for the 3.15 at Haydock on Saturday?


 
Just to clarify: we have a situation where members will be balloted regarding industrial action over cuts when we haven’t even been told what, how much or where those cuts will be made and my point regarding how it might actually be a reasonable approach to cuts is the one to ridicule? Are we really so self absorbed that the irony is missed here?

I can speak with some certainty because that is a reasonable and more common system of redundancies. 




Complainer said:


> This is nothing to do with comradeship or support. This has to do with public services. Who are these people who have 'no productivity' in the workplace? Who are these people who offer 'no value'? Get down from your high horse with these wild, unsupported generalisations, and let's get some specifics on the table about what organisations you want to 'dissappear'?


 
Wow, start thinking about your own posts before asking others for specifics. All we have from you is a blanket defence of the entire public service. It isn’t untouchable. While you avoid specifics and chose to just shout down anyone who offers suggestions I have been specific (and I think reasonable). And yet when I am specific, you start lampooning the suggestion and ask for racing tips. So what’s the point of being specific when your MO is to just mock without substance or consideration?

Now, are you honestly saying that every single member of the public sector is productive? Every last one of them? If so it’d probably be the most unique workplace in the state. 

However, where do I get the perception of “non-productive” employees from? Easy: the Unions. In the last few years their defence of their members and their members’ interest has been the overloading at line and middle management level. All those stats about the Health Service and how many managerial grades there are. Or am I not allowed to bring up the Union’s own stance when it comes to looking at cuts?

Look again at what I’ve written. Natural wastage, voluntary redundancies and looking at non-productive areas (mainly middle and line management overloading), then tell me just what is so unreasonable about this? How much more specific can I be? 




Complainer said:


> I would indeed be utter nonsense. That's why I never suggested this. It would also be utter nonsense to suggest that putting a chunk of public servants on the dole will not have a direct effect on social welfare payments, medical card costs, rental/mortgage interest allowances and a downstream effect on where there money is currently spent.


 
All would be fine if this wasn’t alarmist nonsense which no body but the Labour Party and Unions are suggesting. Again the impact will not only be minimal (look again at the bit on natural wastage and voluntary redundancy and redundancy package), but just the simplest of arithmetic will easily show that the small impact from those people out of work is nothing compared to the cost of keeping then in work.

Things are much nicer when you base your defence of the indefensible on reality. I’ll admit, it makes the argument much weaker and far less entertaining. But sometimes reality has this habit of spoiling the fun.




Complainer said:


> There is no basis for your assumption that there are piles of non-productive administrators or managers waiting to be trimmed off. The OECD report confirms that the Irish public sector is (if anything) understaffed, and is just about catching up on international norms of staffing levels after years of under-resourcing.




Yes there is: the Unions! 

Now, which rhetoric are we now resorting to? The OECD report doesn’t show anything about under staffing. It shows spend on public services across Europe. It’s right and we do spend less than some countries on a  pure euro per head basis. Look if you want to use this report as a defence, then go beyond the first graph. Look at the analysis of spend compared to taxation. We’re much lower in taxes than a lot of nations, yet our spend on the public sector is definitely comparable. You can’t use France with 50% plus taxes as an example and ignore all the others that indicate we overspend.

Also oft ignored is the bit that looks at amount spent on salaries rather than just amount spent. And yet again we see Ireland is topping the charts. Proportionally more of the money we do spend on PS goes on wages than many other countries.

The OECD weren’t looking at staffing levels or even redundant positions, it wasn’t their remit. But their report really isn’t the Holy Grail of defences the Unions want it to be.




Complainer said:


> Shocker - one union official blew his top! Maybe instead of recalling what one public official said on the news one day, you'd like to look at the reality of what is happening on the ground every day right across the public sector. PMDS (or variations of) are standard operating procedure. They aren't perfect, and there is still a lot of learning to do (just as there is in performance management in many private sector bodies), but it is there. To be honest, I wasn't thinking about PMDS in my answer. I was thinking about the kind of restructuring and reallocation of resources that has happened in my organisation and in many others, with some limited impacts on services.


 
One union official speaking on behalf of his members, isn’t that what they do? 

Another example of where specifics are given and you don’t like them. You mentioned an acceptance of change and history shows that it has been anything but accepted or even effectively implemented. Let’s not forget that FAS also had its performance reviews of all grades…how’d that one work out? Sorry, that’s another specific that you’ll probably decide doesn’t apply.

Yes, the PS has had change forced, but only after being dragged kicking and screaming and on the basis of more money under benchmarking.




Complainer said:


> This seems to be one of those things where you try and make people believe something by repeating it often enough. Who decided that the PS is too expensive (certainly not the respected OECD in their recent report)? Who decided that the extra tax is going to support benchmarking and not (just for example) going to NAMA or Anglo-Irish?


 
Keep up the OECD references as it doesn’t bode well for the PS to keep bringing this one up. And who decided? Are you kidding me? I can understand the finger in the ear “la la la, I’m not listening” approach preventing the onset of reality for a little while, but have you not seen the bottom line of Tax take verses PS spend? Are you really suggesting that it’s a lie and myth that there is this deficit? 

If my outgoings are more than my incomings then I can take your finger in ear approach and end up destitute, or I can cut down on my outgoings. 

Of course, I’m probably making all that up and it’s a complete media agenda to suggest that we really are heading down the toilet.


----------



## csirl

One fact that is lost in this debate is that the majority of what the press refers to as  "public sector pay and pensions" costs are paid to private sector employees. Remember that the majority of health and education sector employees paid out of taxpayers money are private sector employees employed by private organisations.


----------



## Purple

csirl said:


> One fact that is lost in this debate is that the majority of what the press refers to as  "public sector pay and pensions" costs are paid to private sector employees. Remember that the majority of health and education sector employees paid out of taxpayers money are private sector employees employed by private organisations.


 In theory yes but they are Public Sector is every way that matters.


----------



## csirl

Purple said:


> In theory yes but they are Public Sector is every way that matters.


 
Why arent these services put to tender?


----------



## Purple

csirl said:


> Why arent these services put to tender?



I agree that they should be but the fact they aren't is why I say they are really Public Sector.


----------



## z107

> Why arent these services put to tender?


I doubt it would make much difference to the outcome of who gets awarded the contracts.
I have zero faith in the tendering system, especially public sector.


----------



## liaconn

Why?


----------



## csirl

umop3p!sdn said:


> I doubt it would make much difference to the outcome of who gets awarded the contracts.
> I have zero faith in the tendering system, especially public sector.


 
Considering what happened in Drogheda, there is little chance that the Medical Missonaries of Mary would ever win a public tender.


----------

