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Budget figures are all wrong, says economist


Union boss: Blair Horan. Photo: Collins

Union boss: Blair Horan. Photo: Collins

Union boss: Blair Horan. Photo: Collins

Brian Lenihan's budget outlook figures are well wide of the mark, according to one leading analyst.

The €6bn budget cut for 2011 and €15bn four-year adjustment are not enough to hit the deficit shrink target, Megan Greene of the Economist Intelligence Unit told the Sunday Independent.

"It should be closer to €9bn for 2010, and around €20bn in total," she said.

Well at odds with Department of Finance forecasts, her prediction is negative growth for the next two years and only tiny growth in 2013 and 2014. "I think the Government is being pretty optimistic and I don't share its view," Greene said of its forecast of GDP growth of 0.25 per cent for 2010, 1.75 per cent in 2011, and 2.75 per cent on average over 2011-2014.

"I expect real GDP to have fallen by 1 per cent in 2010 and 0.8 per cent in 2011, but to grow by an average of 1.1 per cent in 2011-14."

The €15bn announced might not be the final cut figure, Greene warned. "I don't think this is the end of the bank bailout. The property market hasn't found the floor yet, which means further writedowns on loans."

We are heading for sovereign default, she said. "Come June the Government will have to raise money and it won't be able to on the bond markets. It will have to turn to the ESF."

Meanwhile, as the crisis in the public finances deepens, the huge hike in numbers at the top of the civil service came under renewed attack this weekend.

The general secretary of the Civil Public & Services Union (CPSU), Blair Horan, repeated that the number of higher principal officers had increased by 462 per cent over 10 years, while his lower-paid members were being asked to shoulder further sacrifices.

Hitting out at the mandarin top brass, he said that "the secretaries general have presided over the ruination of the economy while at the same time looking after themselves, including a 40 per cent increase in three special awards over that period".

The CPSU, which includes many lower-paid workers, voted against the Croke Park Agreement and is now refusing to be "put first in the queue for change" under the action plan under discussion.

Mr Horan has circulated all his branches with the full figures exposing the "extraordinary increase in the numbers of civil servants at the top end over the decade. Increases in numbers at the top echelons range from the 462 per cent at higher principal officer level to 339 per cent at assistant higher principal officer level, down to just 14 per cent among the clerical officer ranks.

On average, principal officer numbers have rocketed by 114 per cent while assistant principal officers have increased by 109 per cent.

In a rebuke to the mandarins in the Department of Finance Mr Horan said: "Some things never change. Dump on the lower-paid grades yet again."

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Claiming that his members were being victimised, Mr Horan insisted: " You will note that there is no proposal in the Action Plan to address the extraordinary growth of management grades in the civil service over the past decade."

The CPSU boss is resisting efforts by the department to remove privilege days and bank time enjoyed by many of his members.

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