Farm Ireland

Wednesday 16 January 2019

Only selfless leadership can rescue Ireland from the economic quicksand

John Shirley

Irish farm leaders last week unveiled a memorial to Robert Anderson, an organising genius who implemented the co-op ideals of Horace Plunkett way back at the turn of the last century.

Born in Buttevant, Co Cork, in 1860, of Scottish Protestant ancestry, Anderson was Secretary of IAOS (now ICOS) for its first 30 years (1894-1924). He was appointed to the board of IAWS from 1905, and when IAWS was in serious financial trouble in 1922, he took over as managing director.

In turning around the fortunes of IAWS, Anderson implemented a 10pc wage cut for the staff and took a 50pc salary cut himself.

Surely that's the kind of leadership needed to rescue the stricken Irish economy?

With hindsight, the absence of bank regulation and the 2002 public service benchmarking deal were the two biggest factors in Ireland's economic collapse. At a time of illusory financial wellbeing, public and civil servants were awarded packages now not affordable.

In the benchmarking agreement the biggest gains were made by top civil servants, while politicians were granted a new raft of perks, details of which are now being drip-fed to the public in revelations of pension arrangements etc.

Reversing the public service benchmarking agreement is an essential step for national recovery. This will cause severe pain, but economic recovery will not happen without pain.

Farmers can empathise with the pain of those whose incomes are being slashed. Last year the average farm income fell 29pc in money terms but, because of a drop in the cost of living, this was reduced to 26pc in real terms.

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But in money terms, last year's average farm income was actually less than 2002. Full-time Irish farmers know the reality of the pain of income cuts, but it is the good fortune of many farm households that they have a public or civil service earner on board.

The Croke Park public service pay and reform deal is seen as an essential step to national recovery. Some unions have voted in favour, while others -- including two of the teachers' unions -- have voted against it.

I am opposed to the Croke Park deal, but for different reasons to the unions. My fear is that the Exchequer cannot afford to continue paying existing public service salaries, and that the reform element will not be delivered.

Lest we forget, as a nation we are borrowing at the rate of €400m week. The ability to run the economy and pay public servants depends on lenders willing to continue to provide that cash. As the Greeks can testify, international money lenders can lose confidence in an economy.

In Ireland we are just about keeping our heads above water. Some costs are reducing, but the culture of greed is still strong. The fees charged by our lawyers, medics, dentists and other professionals are out of line with the rest of Europe. Our cost of living is more than twice that of Hungary and more than three times that of Bulgaria.

Ireland can dig itself out of the economic quicksand, but that will only happen if our politicians, senior public servants, professional classes, business leaders and others in positions of authority are prepared to follow the personal example shown by Robert Anderson and the founders of the Irish co-op movement.

But today's leadership has been patchy at best. Finance Minister Brian Lenihan is good, but he made a tactical mistake by excluding senior civil servants from the last round of pay cuts. That decision has created discontent among union members and has been a big factor in some unions rejecting the Croke Park deal.

The action of senior civil servants in evading the last pay cuts proved that the wrong mindset still exists at the top of our public service.

Until we adopt the selfless mindset of service first, personal gain second, shown by the co-op movement's founding fathers and the State 90 years ago, I fear that we'll continue to struggle.

Irish Independent