Wednesday 17 January 2018

Greece got us the deal, now let's slash waste

POLL: four in five want new bailout cash spent on health and education

Taoiseach Enda Kenny. Photo: Tom Burke
Taoiseach Enda Kenny. Photo: Tom Burke


Three out of four people believe the improved terms of Ireland's EU-IMF bailout deal came about as a result of the crisis in Greece rather than the negotiating skills of the Government, according to a Sunday Independent/Quantum Research poll.

Analysis pages 2, 22, 23, 24, 25, 32 POLL CHARTS PAGE 23

The finding that 75 per cent credit the Greek crisis for a better deal will take some of the gloss off the impression the Government has sought to create.

Taoiseach Enda Kenny and Finance Minister Michael Noonan had hoped that the outcome of the EU leaders' summit last Thursday would generate sufficient political capital to implement another austere Budget.

The Government will make preparations for the Budget, to involve a €3.6bn package of taxes and cuts, when politicians return from an eight- week holiday in September.

Last week further evidence emerged that the Cabinet intends to focus on social welfare cuts rather than a reduction in the massive public-sector wage bill, which seems set to remain protected under the Croke Park Agreement.

The Sunday Independent has seen a report, sent by the Government to the EU/ECB/IMF troika, which outlines in detail the huge spend on social welfare.

The report discloses how the €20.8bn social welfare budget is spent on more than 80 different schemes, primarily on headline big-spend areas.

A breakdown of the household benefits and free travel scheme, however, may raise some eyebrows after a controversial claim by the Social Protection Minister Joan Burton that social welfare had become a "lifestyle choice" for some people.

For example, last year the department spent: free travel, €74m; free television licence, €57m; telephone allowance, €118m; house appliances, €5.5m; furniture, €2.5m; bedding ,€1.4m; adult clothing, €7m; pram, buggy, cots purchase ,€2m .

The Government's approach to tackling the huge cost of public-sector pay is not supported by the public, however. An Irish Times/Ipsos MRBI poll last week revealed that the public want further pay cuts for public servants rather than redundancies to reduce the €18bn budget deficit.

Asked which option they favoured to reduce the public sector pay bill, 58 per cent said to reduce pay and 27 per cent opted for redundancies.

Yesterday, European Affairs Minister Lucinda Creighton sought to dispute the overwhelming public view that the Government got a lucky break in Brussels last week.

She claimed there was an "emerging view" at the EU summit last Thursday that a bailout interest rate cut should only apply to Greece and not to Ireland and Portugal.

She intimated that Finland and the Netherlands were "more circumspect" than France and Germany about the improved terms. "We resisted that successfully. Negotiation skills were important," she told the Sunday Independent. But Ms Creighton also admitted that the crisis in Greece had contributed to a successful outcome for Ireland.

"I would say it was a combination of both. An opportunity arose to achieve a better deal and we took that opportunity. It was not straight forward," she said.

Economist Colm McCarthy said that the revised deal was "good" from Ireland's perspective, but he also said it would be "unwise to exaggerate".

While the revised deal is expected to save Ireland between €800m and €1.2bn a year in interest payments, the Government has let it be known that it has no intention of easing up on austerity measures.

A massive 79 per cent believe the Government should use the savings to reverse cuts in health and education spending, according to the Sunday Independent/ Quantum Research poll.

Sunday Independent

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