Wednesday 16 October 2019

Government risks wrath of grey vote over missing €5 as it keeps promise to reward public service

‘Assumption of orderly Brexit’: Social Protection Minister Regina Doherty. Photo: Collins
‘Assumption of orderly Brexit’: Social Protection Minister Regina Doherty. Photo: Collins

Anne-Marie Walsh

Finance Minister Paschal Donohoe is risking the wrath of the formidable grey vote.

State pensioners have shown before that they are not a force to be underestimated, and most importantly are among those most likely to turn up to vote during general elections.

They have got used to an extra fiver a week in successive budgets over the last three years. The meagre €2 hike in fuel allowance is unlikely to appease them. As Siptu pointed out, only one in three social protection recipients gets it.

Age Action's statement yesterday accusing the Government of being content to keep older people hovering on the poverty line indicates that many over-65s are feeling rightly shafted. The Government may be banking on the fact that by the time an election takes place, this Budget may be a distant memory.

It's also hard to argue with the main excuse for taking the €5 off the table, Brexit. It would seem a bit mean-spirited to argue that they should get the price of fish and chips rather than let it go to some poor man or woman who has just lost their job. But it also lets the Government off the hook in terms of delivering on its commitments to old folk.

And it has made commitments to them. They include a commitment in its pension strategy to peg the value of the State pension at 34pc to 35pc of average wages.

It is already lagging behind.

Average weekly earnings are €771.60. If the pension was valued at 35pc of this, it should be €270.06 a week - rather than €248.

Its Roadmap for Pensions Reform said it would set a formal benchmark of 34pc of average earnings for the pension by the end of last year.

It also promised to roll out a process whereby payments would be "explicitly linked" to inflation and average wages in the same timeframe.

It missed the deadline. When asked about benchmarking the pension at a press conference yesterday, social welfare officials didn't mention an implementation date.

The Government has also decided not to set a date for a meagre 30c hike in the national minimum wage that was recommended by the Low Pay Commission.

Minister Regina Doherty pointed out that this commitment was based on an assumption that the UK would make an orderly EU exit.

Yet, at the same time, there are no signs of the Government backing out of other commitments to other large voting blocs.

Paschal Donohoe paid tribute to "all our civil and public servants who do great work on behalf of our country and its citizens" during his speech yesterday.

TDs benefited from a pay rise of over €1,600 a year last month due to commitments made in a pay deal. Some €400m has been put aside for public service pay rises next year. Yet these pay deals allow for reviews due to potential economic shocks.

A 2pc pay rise is due on October 1 next year.

Based on current predictions on the cost of living, this will more than inflation-proof most politicians and State workers from an economic collapse.

Irish Independent

Also in Business