| 12.2°C Dublin

A 10-point guide to dismantling the Croker economic timebomb

Since being elected, the Government has skirted around it, talked over it and slid out from under it. But as Budget 2013 lurches into sight, they realise there's nothing left in the room but the elephant. Mark Keenan investigates

TWO weeks ago, Health Minister James Reilly talked about the Croke Park Agreement, pointing to the animal which will devour €9bn of his €13bn expenditure for health.

He outlined his problem: being forced to look away from the Croke Park ring-fenced €9bn -- the great big bit that helps pay the six-figure consultants, high-earning HSE administrators and the clip board merchants -- and try to slice €1bn from the remaining €4bn that now counts for vital frontline patient services, hospital beds, community care for the disabled and the elderly.

"It's the elephant in the room!" Dr Reilly fumed.

Education Minister Ruairi Quinn has similarly outlined how Croke Park squashes 80pc of his education department's budgetary options, and the same is true to a greater extent across all government departments as we approach Budget 2013.

When the troika's instructions are taken into account, just what is left for ministers to decide on?

UCD economist Colm McCarthy says: "Last year's Budget was much easier given that the Government got a head-start from the cuts that Brian Lenihan had already initiated.

"The Government also added 2pc to VAT -- a big moneyspinner -- but it's something they can't do twice.

"What's happening is that the ministers are now getting their lists of options on cuts from the civil servants in their departments -- the parts that aren't ring-fenced by Croke Park -- and they're looking at these lists right now and thinking 'this is pretty horrific'."

Until the beginning of this week, it looked like budgetary frustration might actually trigger a revolt against Croke Park. Since Reilly pointed his sulky finger at the beast, ministers were suddenly queuing to have their say on the elephant.

Bruton, Hayes, Costello, Quinn, Creighton, Rabbitte and Varadkar all weighed in with views on Croke Park, whether to state that the agreement now needs to be dealt with, justify its maintenance until 2014 or even pointing out how our particularly well-fed elephant is "the envy of Europe".

But just when it seemed like Enda Kenny might finally reach for the elephant gun, he did just the opposite -- and fed it a great big sticky bun instead.

At this week's Fine Gael think-in, he stated that his Government would be "honour-bound to stick by the deal -- so long as it is being implemented."

Perplexingly, in the same interview, he also expressed the need for many areas of the agreement to be speeded along -- indicating that much of it wasn't actually being implemented.

Irish business leaders, economists, the troika and most of the electorate, who have all spent the past 18 months pointing and shouting "behind you!" at Mr Kenny et al, might well be gobsmacked at the damp squib of an ending to this particular pantomime -- that this year's budgetary dilemmas and the "horrific" lists Mr McCarthy talks of were not, in the end, enough to buy a bullet for the elephant.

The Croke Park cull is being postponed, it seems.

Mr McCarthy adds: "Whether they can actually make it through this coming Budget without touching the agreement is one thing. Whether it's the right thing to do, or the best and easiest way of doing things, is another question entirely."

Consultant strategist Dr Eddie Molloy goes even further. He asserts that Croke Park is now not just an economic issue, but a moral one.

He wants to know how an elected Government can fly in the face of majority opinion by sticking to an agreement that enhances conditions for a minority at everyone else's expense -- at a time when the country is on its knees and the elderly, the sick and the disadvantaged are in the firing line.

He believes the tipping point leading to a revolt against the agreement should have been reached long ago.

"This 'social partnership' nonsense is a myth. How is it socially equitable when the elderly and the sick are now paying for maintaining the inflated wages of wealthy doctors and senior civil servants?

"Where is the social justice in that? Sixty per cent of this country's citizens have been disenfranchised by Croke Park. We didn't vote for it, nor were we included at the negotiating table. We can't afford the Croke Park Agreement to run until 2014. It has to be dealt with now."

Many, like Mr McCarthy, believe that getting to grips with Croke Park before 2014 is virtually inevitable, no matter what noises the Government makes. "It just doesn't bear thinking about how exactly the Government can achieve the targets that need to be made without addressing it," he says.

To help with the task of dismantling the Croke Park Agreement when its time does finally come, its critics have banded together here to produce a 10-point guide.

They include Mr McCarthy, strategist Eddie Molloy and Derek Fox of the Irish Management Institute.

1. Have a plan

Identify the right cuts early on -- whether in benefits and/or salaries -- and define a fair framework for redundancies. Most agree that the Government needs to agree a salary cut-off point below which public sector incomes should be protected.

Mr Fox says: "It may be that there are benefits other than salaries which can be cut that would better save money in the long run. But if productivity is cited, then there needs to be tangible proof."

Mr Molloy adds: "Break up the monolith that is Croke Park into sectoral chunks, and then pursue suitable policy changes in each area. For example, the disability sector and the consultants."

2. Commission new benchmarking

Colm McCarthy asserts the need for a new benchmarking process. "The old process is outdated, and much of it wasn't even made public. We need a new benchmarking so we can compare like with like -- the private sector to public sector -- and compare wages with those in a relevant similar country.

"Despite the prevailing view, not everyone in the public sector is overpaid, and you can't start getting rid of public sector workers just because you don't like them.

"The results of this new benchmarking process would have to be transparent to all -- whatever picture they paint."

3. Unite political support

Mr Fox says: "Enda Kenny needs to make dismantling Croke Park a unifying issue of national importance."

To do this, he has to reach out for support from the opposition benches. He also needs to ring-fence those who will inevitably oppose him in Government and outside it.

Despite Labour's mixed messages on Croke Park, a government insider claims there is far more support for dismantling the agreement within that party than some of its deputies have been letting on, and that action against Croke Park would be unlikely to force an election.

4. Invoke the agreement terms

Mr Molloy highlights clause 1.28 in the agreement, which states: "The implementation of this agreement is subject to no currently unforeseen budgetary deterioration."

Because Ireland's economic situation has clearly deteriorated, therefore all bets should be off. It says so in the contract.

He also cites the question of breach of contract by the public sector. "We are constantly hearing about the benefits of Croke Park, but when it comes to the failures, we hear vague noises that some sectors should be faster with their implementation. Which sectors? We should know if they're in breach."

5. Don't flinch on redundancy

Colm McCarthy says: "Protection from forced redundancy is a big privilege that only the public sector enjoys in Ireland. Thus far, they have themselves decided who stays and who goes. This has to end.

"But redundancies have to be made in the right areas. For example, high-paid administrators in the health service rather than nurses. Although you won't actually save a whole lot of money by going after the higher paid, it gives you the moral ground you will need."

6. Mobilise public support

The Sunday Independent's Quantum Research poll, conducted on September 2, had 84pc in favour of revisiting public pay despite Croke Park. A recent survey on online forum boards.ie showed 70.64pc in favour of abolishing Croke Park, and 22.94pc against.

Mr Fox says: "Polls show the Government has huge public support on tackling Croke Park and this needs to be capitalised on. For every one member of the vocal minority that will kick up, the Government needs to show the three people who are in favour."

7. Engage the unions confidently

"The public sector unions have been misleading their members by putting across this line that 'you're overworked and underpaid'. The truth is that they've been doing very nicely," says Mr Molloy, who notes that they remain ebullient.

"There is a long history in Government of ministers avoiding conflict with various sectors. At every level today, ministers are being dissuaded from bringing things to a head.

"At the same time, any minister who has the bottle or the confidence to state the obvious is being pulled back into check. The strong unions largely represent the public sector and they don't have a mandate from the rest of the country on this issue. But if they win this battle, then they are the Government."

Mr Fox adds: "The Government needs to engage the unions in a partnership negotiating role, but must also make it clear from the beginning that there will be strong resolve and consequences if agreement can't be reached."

8. Engage public workers who don't benefit

Croker's opponents say that not all public sector workers benefit from its guardianship, particularly the low-paid. Younger teachers, for example, have their conditions curtailed at the expense of protecting their senior colleagues' pay packets.

9. Prepare for strikes

Mr Molloy says: "If 80pc of the public really are in favour of tackling the Croke Park Agreement and they want this done, then they must be ready for schools closing."

Mr Fox adds: "If strikes are going to come, then the Government must raise this possibility with the electorate beforehand and have it primed for them.

"They must have a contingency plan in place to protect frontline services and they must let the public and the unions know this will be the case."

10. Show the benefits

Mr Fox concludes: "Ultimately the electorate, like anyone else, is selfish and what they really want to know is 'how will this benefit me'. It's thus imperative that we are all made aware of how coming to grips with each aspect of Croke Park will prevent cuts in other areas and show where the saved money goes."

Indo Business