Tuesday 23 July 2019

Unions holding Government to ransom - and everyone else is suffering as a result

'The ring was breached by the Luas drivers and blown away by the Garda unions, leaving the way open to a spate of insistent demands from one public service union after another.'
'The ring was breached by the Luas drivers and blown away by the Garda unions, leaving the way open to a spate of insistent demands from one public service union after another.'
Eddie Molloy

Eddie Molloy

In a book just published, entitled 'Austerity and Recovery in Ireland: Europe's Poster Child and the Great Recovery', the authors remind us that 70pc of our national debt, which we are now paying €7bn a year to service, was caused not by the demon banks but by ourselves adopting a lifestyle that was never sustainable.

As a society, we went one better than Charlie McCreevy's disastrous policy, "when I have it, I spend it", to one of "when I don't have it, I borrow to spend it".

There were five big hits on the public finances when the crash occurred: the national debt ballooned; capital expenditure on vital infrastructure dried up for years; public services were severely cut; our rainy-day provision - the National Pension Reserve Fund - was forfeited; and public service pay was cut by 17pc.

Although this was a painful pay cut, given these other four disastrous losses and taking account of the mass redundancies, wage cuts and decimation of pensions suffered by private sector workers, public servants actually got a very good deal.

This is the context in which to assess the Government's concession in bringing forward payment of €1,000 to every public servant from September to March, at a cost of about €125m. We are told that this money and the unplanned €50m extra for gardaí will be found from "existing resources".

Having secured this bonus in the face of the above multitude of competing claims on the public purse, the public service unions' response was not graceful acceptance but to up the ante, putting the Government on notice that they will soon be back for more. The €1,000 is just a down payment on accelerated "pay restoration" until such time as other "unresolved issues" are dealt with. Furthermore, only then will they countenance any discussion about productivity.

It was reported that the talks which resulted in bringing forward the €1,000 were dubbed "anomalies talks". What a lovely, sanitising word. Another word that appears to have been left outside the door is "affordability".

Consider, just in the health services alone, that 536,000 people are waiting more than a year to see a consultant; that 6,500 children believed to be at risk have no assigned social worker; that child and adolescent mental health services have only 50pc of the staff they need; and that Tony O'Brien, boss of the HSE, estimates that €9bn will be needed to transform our broken health service. Then ask, how on earth can accelerated pay restoration be deemed affordable?

Add the need to ramp up investment on vital, creaking infrastructure, which is the key to sustainable prosperity for all, and the urgent need to reduce the national debt and build up a rainy-day fund in the face of threats from Brexit and Trump, and we can see how the influence of public service unions in determining budgetary policy is grossly disproportionate in several ways.

First of all, their access to the corridors of power gives them an unfair advantage over equally or more deserving groups such as exhausted carers, whose respite hours were decimated in the crash. Carers are unlikely ever to enjoy tea and biscuits in Government Buildings over week-long "anomalies talks" on accelerated restoration of respite hours. It remains a case of industrial muscle rules OK.

Public service unions also exercise disproportionate influence on budgetary policy in the timing of the deals they secure. They are invariably first in the queue, with increased pay deals already signed off months before any other needs get a look in. The Lansdowne Road Agreement had bagged, by April 2015, 30pc of the 'fiscal space' that would be available in October 2015 for the 2016 budget.

The very same narrative is unfolding right now in 2017.

The consequences of these pre-emptive smash-and-grab raids on the public purse surface on budget day when whatever is left of the 'fiscal space' is divvied up. For example, the €35m promised beforehand for seriously underfunded mental health services was cut to €12m on budget day. I wonder if the remaining €23m might now be found in this magical "existing resources" stash.

The job of government is to aggregate all competing demands from particular interest groups and the needs of society at large and then to make decisions that are fair and in the longer-term public interest. As the late Ken Whitaker said: "Lobbies have legitimate functions in protecting and advancing particular interests... but government and parliament, democratically elected, should not surrender independence of judgement to group or media pressure."

To express this differently, echoing the words of a minister when the new Government was eventually formed last April, "the centre must hold", the Government must 'hold the ring', ensuring fair play and eschewing short-termism that is detrimental to the public interest. But this is not what has been happening.

The ring was breached by the Luas drivers and blown away by the Garda unions, leaving the way open to a spate of insistent demands from one public service union after another. When challenged on radio to say where the money might come from to pay the €30m a month it would cost to bring forward the €1,000 payment, a union official, knowing the power he possessed, replied simply "the money will just have to be found". Now we know it was found.

The centre has not held and looks set to unravel further over the next few months as public service unions take advantage of a weak Government and again try to seize the lion's share of available money well in advance of wider budget discussions on the national debt, infrastructure, the rainy-day fund and, most especially, the needs of vulnerable groups for restoration of public services.

The Irish Congress of Trade Unions website used to assert that the trade union movement was the key to achieving a just society. If this was ever true, it certainly is no longer the case. Union leaders make no bones about it: "Our job is to protect and improve the pay and conditions of our members, and we make no apology for that."

As Mr Whitaker said, this is entirely legitimate, so good luck to them in driving the hardest bargain possible on behalf of their members.

However, what is not legitimate is that the "supremacy of government and parliament over sectoral interests" is surrendered because of threats to bring the country to a standstill.

Eddie Molloy is a management consultant and board member of Mental Health Reform

Irish Independent

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