Thursday 23 February 2017

Borrowing to boost public sector pay is unfair on other taxpayers

The Government has caved in to demands for public pay hikes and it is the rest of us who will foot the bill, says Dan O'Brien

Dan O'Brien

Dan O'Brien

Greek municipal workers protest
Greek municipal workers protest

Who awards pay increases? The answer, almost always, is profitable entities. Loss-making businesses and organisations are much less likely to add to their costs by inflating their wage bill. If they do so, they make even bigger losses. That can put the entire organisation at risk.

The Government is still loss-making. Last year, one euro in every nine that it spent was borrowed. The gap is expected to close a little this year, but the latest set of figures from the Government, published last Tuesday, showed it will not narrow by much.

This year's deficit is projected to be €4,600m. That amounts to almost €2,500 for every working person. Next year, the Government plans to shrink its overspend further, but only to €1,800 per employed person.

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