Sunday 21 July 2019

There can be no going back to pay madness

Teachers and ASTI members pictured on strike outside Dominican College in Dublin last week Photo: Laura Hutton/Collins
Teachers and ASTI members pictured on strike outside Dominican College in Dublin last week Photo: Laura Hutton/Collins
Eddie Molloy

Eddie Molloy

In this paper recently, Brendan Howlin, leader of the Labour Party, proposed, as a way to resolve the current industrial relations difficulties, "a new deal that could be a longer-term agreement that delivers full pay restoration for all public servants - giving everyone a clear roadmap to get back to where they were before the crisis".

There is great credit due to Mr Howlin and civil servants in the Department of Public Expenditure and Reform for the courage and competence they showed in rescuing the economy from the catastrophic collapse in 2007-8. But having done the hard yards, he has failed ever since the first green shoots of recovery appeared in spring 2014 in a key responsibility of a government minister and now leader of a major political party, namely the management of public expectations.

On the same day (October 28), in the 'Irish Times', Professor John Fitzgerald pointed out that back then, in 2006, following on from the impact of benchmarking, "public service pay rates were over 20pc above those for comparable private sector workers". Furthermore, even after "a dramatic and exceptionally painful cut in public service pay rates in 2009 and 2010…public sector workers were paid on average about 10pc more than their private sector counterparts".

Starting around April 2014, Jack O'Connor of Siptu began the campaign for "pay restoration" and Mr Howlin echoed the sentiment, speaking of "legitimate" and "reasonable" expectations of payback now that the economy was recovering. With this line being reinforced over the next 12 months as good economic news continued to flow, in April 2015 the Lansdowne Road Agreement delivered the first instalment of pay restoration and a promise of more to come in early 2018.

The agreement did something else: it established in the public mind the fiction that the financial emergency was over and that the FEMPI legislation (Financial Emergency Measures in the Public Interest) should therefore be "unwound".

The current industrial relations crisis is a direct result of politicians on all sides failing to manage expectations. Promising to "scrap the hated USC", repetition of the slogan "keep the recovery going" and chest-thumping about "the best performing economy in Europe", not to mention the "leprechaun economics" 26pc growth in GDP and the €13 billion tax refund supposedly forthcoming from Apple, all fuelled expectations to such a degree that the demand is no longer for mere pay restoration but, now from some unions, "accelerated" pay restoration.

Such expectations are entirely unjustified because they rest on a very narrow view of the strength of the economy and the health of our society. How can anyone say the financial emergency is over when 55,500 citizens are waiting more than a year to see a doctor; 6,500 children deemed to be at risk (stop for a moment and consider what this means) have no assigned social worker; not a single multi-disciplinary mental health team as recommended in 2006 in A Vision for Change is yet fully staffed; and thousands of families are eating, sleeping and hanging up their washing in tenement-like conditions in a hotel room.

If this shocking picture does not constitute an emergency, then what does? It is not just a social emergency, but a financial emergency at root. The effect of the inflamed and virtually unchallenged sense of "legitimate entitlement to pay restoration" was that the Lansdowne Road Agreement of April 2015 set aside for public sector pay increases over 30pc of the money that would be available to Government for the budget in October 2015. Public servants were enabled to seize the first fruits of the recovery six months before any other deserving cause, like those just mentioned, was considered.

This skewed allocation of resources has been repeated in Budget 2016, where €750m of the €1.3bn available was allocated to public service pay. Once again, there is little left in the kitty to make any kind of dent in the enormous deficiencies in our infrastructure and public services. Just for example, a pre-Budget promise of €35m to plug the gaps in mental health services was cut on Budget day to €12m. And, one might ask, what are the "legitimate expectations" of the 90-year-old woman who spent two days on a trolley in A&E?

To restore some sanity and set reasonable public expectations, the messages that need to be driven home by the Government with the support of the media include:

The financial emergency is not over. The public finances are still in a precarious state, with a €200bn debt to be reduced, the impact of Brexit - already being felt - to be managed and the pensions timebomb to be tackled, starting now.

The end game cannot possibly be "full pay restoration", or getting "everyone back to where they were before the crisis", but the re-calibration of public sector pay based on accurate, comprehensive (to include pensions, allowances, and other benefits) comparisons with the private sector in Ireland and international benchmarks. Establishing the full facts is key to fair and rational policies. Latest CSO figures show, for example, that the average annual pay of gardaí is €68,000, far higher than the €48,700 average in education or €44,000 in the civil service.

All work is "special", not just the work of gardaí, nurses or other public servants, as politicians seeking to curry favour with this big voting bloc would say.

To ensure that Government is not captured by any vested interest, a new forum along the lines of social partnership will be established. An all-inclusive process would help to curb the anarchy of individual unions taking turns aggressively to pursue their own partisan objectives with scant regard for the common good.

Convinced that 'a fair society is a prosperous society', the Government will heed the advice of the Nevin Institute, ironically the economic think-tank of the Irish Congress of Trade Unions, that the best way to improve people's standard of living, especially the most disadvantaged, is to build houses, invest in childcare and improve health, education and other public services. From now on, this means that service restoration will take precedence over pay restoration.

The Government needs the full support of the media to communicate the bigger picture effectively. Crucially, it must dampen public sector expectations by stating bluntly that there is no going back to where we were before the crisis.

Irish Independent

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