Friday 31 October 2014

John Downing: Politicians have taken a hit, but they can only blame themselves if we don't care

Published 28/02/2013 | 17:00

Bertie Ahern was in power at the height of the pay and pension madness

IT WAS a little over five years ago, in late October 2007, but we now know it was an age of innocence. All too many of us still believed the concept of a 'soft landing' to end the crazy carry-on that masqueraded as the Irish property market. And it was just at this time that the Government showed that they had tee-totally lost the plot on their own pay and pensions.

Just before the Hallowe'en weekend in 2007, it emerged that the Government had accepted a Higher Remuneration Group report for lavish pay increases for about 1,600 senior people right across the civil and public service.

And in their midst was then Taoiseach Bertie Ahern, lined up for an extra €38,000 to take his yearly salary to €310,000, while his ministers were set for an extra 12pc to take them to €240,000 per year.

Yesterday, the Government unveiled a series of pay and pension cuts of up to 10pc for that same 1,600 senior group, which includes judges, army and garda top brass, heads of universities and senior managers across the public service.

A back-of-the-envelope calculation suggests that Taoiseach Enda Kenny will now be paid €186,000 per year; Tanaiste Eamon Gilmore €171,000, down by some €13,000; and ministers will get about €158,000, down some €12,000.

When you look at things in that light, you can see that politicians have taken a hit in the intervening years. But that is surely to come at the political pay argument from the wrong end.

The fact is that in autumn 2007, Mr Ahern was set for a salary hike that was of itself more than the average industrial wage at the time.

There were signs that the economy was beginning to creak dangerously and there was growing discontent among those who could tear themselves away from talk of what their house price estimate was, is and might be.

The problem for this Government, as they go back seeking sacrifices 'one last time' from low-paid public servants, is that they have badly mismanaged the perception of their own pay and perks.

The average public service worker would probably be surprised to hear that the Taoiseach has taken a pay cut of about €90,000 in the past five years. But he or she would quickly re-gain their composure to tell you that our political leaders were grossly overpaid and are still overpaid.

The situation on pensions for those who retired at the top of the public service in recent years also remains a big bugbear. The scale of the proposed pension cuts now announced for former senior people is just far too timid.

Mr Ahern can expect to lose less than €8,000 per year from his yearly pension of over €150,000 per year. But he and fellow politicians are just the more visible ones in a long list of people who went out on extraordinary salaries and even more lavish pension terms.

The perception – and the reality – is that our political leaders have not been seen to give a sufficient lead on this issue. They have failed to take a big hit all at once and show a clear example on both pay and pensions.

It is not too surprising that they have struggled to shake off the image of having wanted too much. It makes pleas for one last sacrifice hard to sell.

In a little-remembered footnote to history, Mr Ahern, his ministers and junior ministers did not take those crazy pay rises in autumn 2007. After weeks of raging controversy, they decided to 'defer the pay raises for 12 months' while the raises were paid to all the other public service top earners. Soon after that, an economic crash overtook all the craziness.

We could recall that autumn 2007 public backlash and the Government pulling back as the beginning of the end of that 'age of innocence'. But the political class is still suffering from that period when it completely lost the plot on pay and pensions.

Irish Independent

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