News Fionnan Sheahan

Monday 22 September 2014

Beyond the 'emergency', there's 
no vision for life in normal times

Ministers are talking about declaring the 
financial crisis over, so what's next?

Published 17/08/2014 | 00:00

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Michael D Higgins

Decades after World War II ended, legislation brought in specifically to provide special powers to the State in time of war was still on the statute books, albeit in amended form.

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'The Emergency', as the war was euphemistically referred to from 1939 to 1945, wasn't actually declared over by the then government until 1946.

Brendan Howlin has raised the flag of the end of the latter day 'emergency' - the financial crisis which has engulfed the country for the past six years. "A day will arrive when the emergency no longer exists," the Public Expenditure minister says.

The minister is planning to hold talks with the public sector unions next year on
the restoration of public sector pay and pension cuts made during the economic crisis.

The negotiations between the Government and public sector unions will centre on the possible reversal of the public sector pension levy,
direct pay cuts and reductions in pensions for retired workers.

Howlin has made it clear all the €2bn worth of cuts won't be reversed and those pay reductions that are restored will be done over time. Some of the measures will have to be retained.

The most contentious moves were a pension levy worth an average 7.5pc and a pay cut worth an average of 6.5pc to each public sector worker. The cuts to nearly 300,000 public sector workers were made under emergency legislation, prompted by the economic collapse - the Financial Emergency Measures in the Public Interest Acts 2009-2013, known as FEMPI.

Setting aside the public sector for a moment, Howlin does raise a valid point: eventually, the financial emergency will have to be officially declared to be over.

Budget 2015 is expected to be the last of the budgets where a major adjustment is required. Unemployment is dropping, albeit never at a fast enough rate.

The troika has departed, although it retains a close eye on the country's activities.

The bailout has ended, even if its effects will continue to be felt for decades.

Coalition ministers are preparing for the end of the emergency, but there is scant evidence of any real thinking of what lies ahead.

The Government has yet to articulate any vision of how society, the economy and public services will develop in the years ahead as the country gradually returns to relative normality.

The painfully long Labour Party leadership contest illustrated the lack of fresh thinking at the heart of the political system. Condescending State of the Nation addresses from the Taoiseach don't suffice. What's required is a clear enunciation from the Government of where it sees Ireland going beyond the emergency.

Society

Relying upon President Michael D Higgins to be the conscience of the nation won't really deliver the required perspective. Those with the real power need to say what sort of society they want to see emerging.

Show some actual leadership and they will find people will respond. Set out an alternative to the grab-all ethos of the Celtic Tiger era, which would see values and accepted standards put forward, including protection of the most vulnerable, that is not just based on how much is in the kitty for an organisation the following year. The country won't go back to the largesse of a decade ago, but a sustainable economic and social model has to be the goal. How about a restatement of responsibilities - from the citizen to the State and the State to the citizen?

Economy

Apart from continuing to attract foreign companies by offering race to the bottom deals on corporation tax, what exactly is the plan for job creation? And when that eventually runs its course, what's the back-up?

Fostering an entrepreneurial spirit, where young, dynamic business people can try and fail and try again to set up their own firms and create employment is surely the direction the country needs to go. Apart from the lack of such a culture, the realities of the financial crisis means the banking system is not fit for purpose to ensure the next generation can secure the funding to even get off the ground.

Taxation

The most egregious emergency measure of the economic collapse was not the public sector pay cuts, but the introduction of the USC. Yet nobody in Government is talking about removing it from the statute books.

The punitive personal taxation system, where 52 cents of every euro earned above €32,000 is gone on tax is not going to encourage any worker to go the extra mile. And that's before indirect taxes come into the equation.

The experience of the 1980s and the early 1990s shows the drag on the economy of high personal taxation. Instead of reassuring the populace that Budget 2015 will be the last big ask, the water charges is the final piece in the tax jigsaw and tax relief is on the horizon, an honest appraisal of taxation policy would provide reassurance there is a plan in mind.

Public Services

When the civil servant in charge of public sector reform says it has to be made easier to sack public sector workers who underperform, it's time to take notice. Department of Public Expenditure and Reform secretary general Robert Watt said this summer the public service should adopt the practices already used in the private sector - "in effect, writing a cheque to move somebody out".

"We know in the private sector, particularly when it comes to senior leaders when there are issues around performance, that people are exited out and that usually comes in the form of a payment or a package.

"That's done in a way which respects confidentiality, so that people don't know exactly why somebody left or the conditions of their departure," he said.

As she left Ireland after five years as head of the health standards watchdog Hiqa, Dr Tracy Cooper warned of the damage of a lack of accountability: "The problem is that we've never had any consequences, so that if there's a systems failure or a major problem with the quality of services, nothing really happens."

The lack of consequences results in a repeat of failings. But this can also mean a failure to attract the best people and no reward for innovation. In the talks on restoring pay cuts for the public sector, genuine structures to ensure accountability have to be on the table.

Politics

The disappointment of seeing so many of the principles of a new-era politics being abandoned will rankle with voters. This Government had a once in a half century opportunity to do away 
with the same old, same old, the promise breaking, the weasel words, the cronyism, the parish pump, the Punch and Judy Show. But they blew it. Their chance is gone. A breath of fresh air would be to have a few political leaders willing to stand up and prove their decisions were made in the national interest, rather than the party interest and that people will be appointed on the basis of ability, not geography. Wouldn't it be nice?

Just don't hold your breath.

Sunday Independent

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