Saturday 10 December 2016

Pay rise bonanza would hurt us all – even the Labour Party

Spending cuts rather than tax hikes must be the focus of the Budget, warns Marc Coleman

Published 13/10/2013 | 05:00

Ray MacSharry
Ray MacSharry

A budget for jobs, business and growth, or a Budget for Labour? Or, just possibly, a Budget for both? Given what we know, Budget 2014 so far looks more a case of Labour's way than Middle Ireland's. The fact that Jack O'Connor – unelected Marxist Leninist Jack O'Connor – led the call last week for a lower-than-agreed budgetary adjustment (€2.5bn instead of €3.1bn) and got his way is telling. No matter how unpopular with the voters, Labour still allows its powerful allies to call the shots.

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Now Jack made it all sound great by touting the idea of a pay rise for everyone. Sure we could all do with a pay rise, couldn't we? But if we are able to adjust by less than €3.1bn and still hit our deficit target that is because this year's promissory note deal cut our debt payments in the short term. And if it does that, it is only because we have pushed out debt repayment to beyond 2030, ie, on to the shoulders of our children.

Attractive though it sounds, Jack's pay rise is a non-starter. It will benefit only membership of his Siptu union, which is politically dominated by state sector unions. It would also erode a hard-won competitiveness gain and worsen the already huge inequality between the public and private sector; a 47 per cent gap in average public-private pay the likes of which exists only in Greece.

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