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Vulnerable pay for the madness that is Croke Park

Shortly after 9pm on Wednesday, Fine Gael TD Olivia Mitchell rose to address a virtually empty chamber in the Dail on the issue of the Budget. She declared herself to be "shocked".

It was not that the Government had just taken a blunt knife to the most vulnerable in society -- lone mothers, children and pensioners -- which had so shocked her, although she is not happy with that either, but a reply she had received days earlier to two questions she had asked.

In a way, the answers to those questions go to the heart of a real crisis facing the country, a scandal, in fact, that nobody wants to talk about because nobody wants to ruffle the feathers of the all-powerful public sector unions.

The first question was to the Minister for Finance, Michael Noonan. She had asked for the total annual income tax take in 2010 from public service employees. This was his answer: "I am advised by the Revenue Commissioners that the information sought by the deputy is not directly available from the data maintained by them.

"However, on the basis of an estimation of the sectoral distribution of taxes collected annually, Revenue has tentatively estimated that the net income tax collected through the PAYE system from the public sector employees in 2010 was approximately €2.8bn."

The second question was to the Minister for Public Expenditure and Reform, Brendan Howlin. She had asked for the total annual cost in 2010 of public service pensions.

This was his answer: "The Gross Exchequer Pensions Bill in 2010 was €2.7bn." If Olivia Mitchell had backed the right horse almost two years ago, when an attempt was made to replace Enda Kenny as leader of Fine Gael, it is likely that she would now be a minister.

In the Dail on Wednesday, across an empty floor, Mitchell raised the issue of which nobody dares to speak.

"In recent weeks, there has been increasing speculation," she said, "about the sustainability of the Croke Park Agreement. Even if we consider the agreement desirable, I believe sustaining it is impossible."

Olivia Mitchell is a relatively mild-mannered politician, thoughtful at that, a TD from Dublin South, a large, sprawling constituency wherein reside a large number of workers in the public sector, particularly those better-off employees of the State.

In that respect, what she had to say was brave, if one considers the voting power of such a large bloc; she must, therefore, be admired for having the courage to tackle the elephant in the room.

By the way, let us be quite clear to whom we are referring when we say the "better off" in the public sector, for there are many, about 180,000, in fact, a majority who earn from €40,000 to over €100,000 a year.

In fact, let us break it down further, lest you think we exaggerate. According to the most recent available figures, 102,600 earn between €40,000 and €60,000 a year; 41,000 earn between €60,000 and €80,000; 18,100 earn between €80,000 and €100,000 and 17,400 earn over €100,000.

We shall leave aside, as we should, the more than 250,000, many part-time, who earn less than €40,000 because, well, they're struggling too and, at a guess, not

many of them may live in Dublin South.

Olivia Mitchell said this: "In replies to two parliamentary questions to me this week, I learned that the income taxes paid by the public sector barely cover the sector's pensions bill, €2.8 billion and €2.7 billion, respectively.

"I was shocked by this incredible statistic. Next year there will be even fewer public servants at work, but there will be many more of them on pensions; so for the first time, the income tax receipt will be insufficient to meet the pension bill," she said.

The truth is, this is a crisis which has been building for some time. Eddie Hobbs, the financial adviser, raised it three years ago on the RTE Frontline programme, before he was set upon by the public sector spokesmen in audience.

The pubic sector pension scheme is, basically, insolvent. As things stand, it has liabilities of €116bn and rising. These liabilities will never be met. It is impossible that they be met. The pension scheme is, therefore -- if I recall Hobbs' words correctly -- a "ponzi" scheme.

"Is it reasonable," Mitchell asked, "to suppose that private sector taxes can continue to fund not only the entire cost of all public services but to make an increasing contribution to public service pensions as well? Is it fair," she went on, "to ask private sector workers to do that? The question now isn't should this continue, the question is can it continue? I believe it can't."

She said she was not saying that the Croke Park Agreement can or should be torn up -- "we need industrial peace" -- but she believed we needed to renegotiate the deal.

"The bargain was made in different times and it is now clear it cannot be kept," she said.

Of course, the €2.8bn which the public sector is estimated to contribute in income tax, which barely covers the cost of its pension bill, excludes what these workers also contribute, like the rest of us, in various levies and, say, the Universal Social Charge.

But the point remains immutable: the Croke Park Agreement is not working, will not work, despite the fine words of the likes of Brendan Howlin, or his colleague, the promise-breaker, Ruairi Quinn, who seems to think that all of this is a creation of the fevered imagination of the Sunday Independent. It is not. It never was. It is, simply, a fact, which is only now beginning to find a more broad consensus.

Last week, finally, it dawned on the Irish Times, for example, which has called for the agreement to be revisited, and, indeed, on a couple of its letter writers, including some in the public sector, who declared themselves to be embarrassed by their relative riches at a time of real need.

We saw last week the manifestation of this real need: lone mothers attacked, children aged just seven deprived, the elderly forced to go without fuel for an extra six weeks.

This is not hyperbole. It is real, it is urgent and it is getting more urgent. This is also, in fact, immoral.

The immorality is to meet the demands of the so-called "troika", that we cut and tax ourselves out of, or if you prefer, further into a hole, this year to the amount of €3.8bn, to be replicated next year and perhaps for years to come, if the Germans get their way, which they will.

But the upshot is this: as long as the Croke Park Agreement is there, the most vulnerable in society -- the disabled, their carers -- will be repeatedly attacked while workers in the public sector go largely quiet and their leaders go missing.

They are determined only to cling to the gains they have made, out of all proportion, on the back of an unsustainable property boom, a madness which bankrolled their benchmarked pay awards.

Not only that, but they also threatened -- the threat worked -- to defend their various increments from coming under the type of scrutiny which last week, effectively, told a seven-year-old to man-up, 'twas time to stand on your own two feet, boy.

Next year, while that lad is manning up, workers in the public sector will share an increment, that is, a pay increase, in the order of €250m. Since 2007 such increments have amounted to €1.26bn.

It is a scandal.

The pension contribution of the public sector, meanwhile, also remains largely untouched, even though what we will call their pension scheme is, by any yardstick, bust, or as Eddie Hobbs would have it, a ponzi scheme.

The rest of us are paying into that ponzi scheme, those of us still in employment in the private sector, that is, even though 40 per cent of us have no pension of our own. The scandal inherent in all of this is beginning to make Fine Gael TDs shift uneasily in their well-padded seats, but Labour -- ah, Labour -- they blithely continue to protect their own.

Brendan Howlin likes to parrot statistics to mask the scandal, statistics which amount to no more than spin. The total number of public service employees will be reduced by 37,600 by 2015, Howlin says, as if he is a great chap altogether.

The numbers will not be "reduced", however -- not really. They will be moved from an unsustainable payroll into a barking mad ponzi-like pension scheme.

And we are being made to pay for all of this, including, especially, those most vulnerable, the women, children and pensioners, who will be going fearful, hungry and cold as a result.

Ah shure, as the man from Labour might said, that's the way.

Sunday Independent