Public Sector Deal Post author By Philip Lane Post date March 30, 2010 The main points are summarised in this IT article. Categories In Economic Performance, Fiscal Policy Tags public sector deal in Ireland 34 Comments on Public Sector Deal ← Super Tuesday Leaks → Progressive taxation of incineration 34 replies on “Public Sector Deal” The get-out-of-jail clause is important, given the uncertainties over how quickly we can regain competitiveness: “However the deal says that the implementation of the measures set out in the document is subject to there being no unforeseen deterioration in the Government’s finances.” Anybody think there might be an election soon? Looks to have been a ‘kick the can down the road’ exercise. Hopefully not This is a better summary: http://www.irishtimes.com/newspaper/breaking/2010/0330/breaking5.html Reading it again I have to tip my hat to it. It seems to be comprehensive Tip of the hat With perfect timing the other bunch of insiders position themselves in the fight to be last to starve. A Super Tuesday for the banksters and the kleptocrats. A 77% income tax rate was once levied in the state. Richie Ruin. As it may eventually be the case that more employees will be in the public sector than in the private sector, such a rate will ensure that public servants contribute to the costs of paying social welfare to any migrants from Latvia, Iceland and Australia …… such a rate will ensure that public servants contribute to the costs of paying social welfare to any migrants from Latvia, Iceland and Australia Nice sentiment. Are you assuming/hoping that those Irish people who are newly unemployed, up to recently paying the salaries of those gallant public servants, will all have fecked off somewhere else by then? Could this be Cowen’s healthcare bill? Or is it just a mass distraction of the bigger issue facing the country today? I’m stumped by it either way – was sure that social partnership was a sinking ship before this announcement The officials reached agreement before so it is hardly surprising that they reached agreement again. The unions seem to be accepting that putting a floor under pay-cuts is a good result. That should probably be welcomed. Industrial peace is also a good which should be welcomed. The next question is does the public service have to deliver on actual reform to hold the Government to its part of the deal? This is not something the public service has a glittering record on. Personally, I think there is a chance the public service will deliver as everybody in the country appreciates the gravity of the situation. Also, I think it sends out the right message to employers around the country – don’t just batten down the hatches; try to tap all the resources ou have to the max. I can’t see what the supposed win for union members is here. They’ve agreed to halt all industrial action. There’ll be no reversal of the pay cuts unless they deliver the reforms they offered last December in an effort to avoid any pay cuts. Seems to me its Gov 1-Unions 0. @Sarah Carey – maybe the win is the aversion of further loss. It would be interesting to know how many less civil servants are forecast to be employed as a result of the efficiencies. Presumably this will be expected to happen through natural wastage. And yet surely there are many jobs where redeployment is not an option. It all looks like a face saving fudge to me. The unions know industrial action is deeply unpopular among the public while the government could do without industrial action. Like everything we seem to do in Ireland it just puts off some harsh decisions for another day. @Zhou “Also, I think it sends out the right message to employers around the country – don’t just batten down the hatches; try to tap all the resources ou have to the max.” Could you elaborate on this? Aer Lingus for example called the cabin crews bluff and they backed down. Unlike the government they couldn’t afford to hang around. @Zhou, “Personally, I think there is a chance the public service will deliver as everybody in the country appreciates the gravity of the situation.” I suspect the public reaction to this deal – and to the announcements on other matters later today – will reveal the validity of your sanguinity. All power and authority flows ultimately from the people; and responsibility for the outcomes of the delegated exercise of this power ultimately flows back to the people. I’m not sure that there is a sufficiently widespread public acceptance of collective responsibility for electing public representatives who, by a majority, elected an overmighty executive that was captured by malign vested interests and who failed as an assembly of public representatives to hold this overmighty executive to account. I have a feeling that our fellow EU citizens in Greece, Spain and Portugal (if not Italy) are approaching a better understanding of this collective responsibility than are Irish citizens. @All • No compulsory redundancies but flexible re-deployment arrangements necessary • Unified public service labour market to be created This is sensible. Considering that Anglo_Irish €35 billion Black-Hole factored in ……. maybe an all out public service strike to bring down this lot today and dump Anglo-Irish would have been better value for all citizens … silly me … Now, could we have something similar with the Quangos and the Semi-States? And on all boards, appointments based on expertise as distinct from politial patronage – otherwise, nothing happens. @Sarah Take the long view. For the union members, the win is the avoidance of the long propaganda war waged by the Sindo etc in the lead up the next budget, more softening-up and demonization followed by some imaginatively titled “permanency levy” or “rebalancing adjustment” in Budget 2011. To be followed by more of the same demoralization in 2012 and 2013. There’s also the outside possibility of clawing back some of the money already lost. For the union leaders, this gets them neatly off the hook on which they’ve snared themselves and allows them to march the troops down the hill again without losing too much face. @ Sarah Maybe another look at it! These changes have been flaged by union leaders for a year or two. The choice may have been negogiated changes now versus non negogiated changes in the years to come. Is it better to have a negogiation as distinct from a test of willpower with a government that for the next few years cant afford to loose? @Sarah, The winners/losers thing is as narrow-minded as it is tiresome and cynical but no doubt some sections of the media will try and present the deal in this way rather than analysing the substance of it. From what’s been published it strikes me that there have been compromises on both sides, which is the essence of how business should be done in a democracy. If both sides deliver on the commitments they are taking on then it will be a good deal for our society and the LRC team, especially Messrs Mulvey and Foley, should take a bow. @Sarah Carey More like Gov -1, Unions 1. It’s a zero-sum game as far as the public finances are concerned. As Constantin has pointed over on his blog, if public servants are to be insulated from the remaining 2011/12 adjustments, the budget deficit may only be bridged through additional taxation or expenditure savings. What public service unions have secured in terms of pay certainty for members will come at the cost of greater taxation for all of us (public servants included) and further reduced public expenditure. It’s often said that unions shouldn’t be blamed for doing their job and that turkeys don’t vote for xmas etc., but in this instance the private interests of one cohort have been protected at the expense of society at large. Now that’s not very socialist is it? @Veronica “there have been compromises on both sides, which is the essence of how business should be done in a democracy. ” You’re right… after all, that got us the church paedophile compensation deal so it is clearly a mechanism that works… That everyone has to compromise all the time is a tiresome and cynical analysis in itself. It is not how business is done. I have no objection to public servants operating in this manner with their employer; I do object that they demand private sector levels of pay for these different conditions of employment. @Philip Lane You might update the Time Philip – it is upsetting me meltdown predictions – and we are 3,600 seconds behind! Or are we into The Sting Mark II? In 2002, the First Benchmarking body “strongly” recommended that 75 per cent of its recommended increases be withheld until agreement was reached on how “real outputs” would be delivered. It also recommended that an “appropriate validation process” be established to ensure that agreements on issues such as adaptability, change, flexibility and modernisation were implemented in accordance with their terms. http://www.finfacts.ie/irishfinancenews/article_1019286.shtml No mention in the proposed deal of delinking pensions of retired staff from current pay. @YM, There’s no comparison between the LRC managed process and the shabby little agreement hatched between the then Minister for Education, Michael Woods and various Religious Orders on compensation for child abuse in residential institutions which was the most disgraceful, underhand deal ever done in the history of this State and has since been exposed for what it was. What would you suggest as the best means for the State as an employer to reach agreement with the public service unions as representatives of public sector workers? I’m afraid, whether you like it or not compromise, not government by diktat, lies at the heart of any workable democratic system. @Veronica The cynical members of the unions who’ve taken industrial action to reverse pay cuts which have not been reversed might have a different view. Let’s see how the vote goes before blaming the evil meeja. The Firemen have already come out to say its rubbish. Jeez delivering reforms 8 years after benchmarking. Some revolution. @Veronica “I’m afraid, whether you like it or not compromise, not government by diktat, lies at the heart of any workable democratic system.” A compromise deal that is in nobody’s interest is not going to work. It is no different to a deal by diktat except both sides are unhappy with the outcome. It’s pensions yet again. The earnings link retained until at least 2011 and the cuts not reflected in the salary base for determining pensions. Now if the unions were to reflect on how these pensions will actually be paid? … scrip issue in AIB/Anglo/Quinn? Exactly Frank. Not surprisingly the negotiators have came up with a formula which suits all the people who were at the table. And again its no surprise that it’s at the expense of those who weren’t. @Frank aaaaaaaaaaaah. Every time. sigh. @Veronica Since when is an employer-employee relationship a democracy ? It is a market, specifically, at the moment, an employers’ market. Public sector employees are not taxpayers/citizens (I mean, they are not the same class of thing) nor are governments and public sector employers the same. One should not confuse appropriate norms governing, uh, government and citizen relations with those governing employer and employee relations. Must say I’m learning a lot here! Public sector employees are not taxpayers/citizens? They are cynics who have taken industrial action to reverse pay cuts that were imposed on them? Or maybe they’re from another planet? And this wasn’t a fight between the Government and the public service TUs? It was really being fought out on an ordinary industrial relations level rather than a political battle? Last time I looked public sector employees paid taxes same as the rest of the working population. As workers I always understood they have human rights as well, such as the right to take industrial action when they are in dispute with their employer. And Jack O’Connor and his ICTU colleagues were very clear in their pronouncements from the outset: the objective of their indsutrial action was to put pressure directly on the government. I may not like nor agree with their actions; I certainly have very little respect for their leadership; but I can’t see any other reasonable way forward in the interests of our economy or our society rather than for all sides to sit down around a table and do a deal. I respect the fact that they have done so though I’m sure parts of it are far from perfect and of course some people will be very disappointed and feel they’ve been sold down the river by their own trade union leaders. One would think, though, they’d be used to that by now. @ Sarah My reference was to some sections of the media – those who have a particular agenda or those who cannot represent any issue except as win/lose dogfights because, sadly, they are not capable of thinking in any other terms – not the media in general. @ Veronica I guess my parenthetical qualification wasn’t clear. Of course public sectors employees are also taxpayers/citizens. Re-read that bit please and I think you’ll see what I mean, unless you are deliberately misinterpreting what I said. What you are calling “the government” in this context should be labelled “the public sector employers”. You are conflating two roles invested in the same body. When this body is acting as employer in the employment market, it does not have to compromise, since a market is not a democracy and there are plenty of suppliers for the service they are buying. Are you going to ask the unions to vote on a pay cut ? That would be democrat, after all. Conflation of the two roles is a problem in much of the discourse on this issue, especially among the public sector employees and their unions, where it may be a deliberate attempt to mislead the rest of the citizenry. After all, a claim that an employer cut your pay has less emotional appeal than a claim that a government is denying its citizens their rights. No one has a right to a job, especially not from the government. But if you want to talk about rights, I’m sure you’ll agree that employers have a right to fire redundant or inefficient employees, right ? How does that fit in with a requirement to compromise ? The same way that the right to strike fits in. It doesn’t either. Is compromise necessary in this situation ? Maybe. Is compromise necessary per se in cases of employer insolvency ? No. C.f. Aer Lingus. No need to bamboozle the issue with appeals to democracy. Paddy Healy pointing out the betrayal of the membership by the union leaders on VB. Sara Carey’s claim that this deal has a strong chance of getting voted down by union members is correct. At the seminar on the impact of the fiscal crisis on welfare spending yesterday I met acquaintances from a number of government departments, state agencies and universities. The consensus was that it would be voted down as from the perspective of PS workers it brings no additional advantages from the current situation – i.e. the prospects of further pay tax cuts if the economy continues to decline and reforms to working practices. I have worked in various parts of the public sector (local government, central government, universities) and on the basis of my experience I support many of the reforms to work practices proposed here. I have some concerns that the reforms suggested in the university sector are very vague – agree to a revised contract of employment the details of which will be decided prior to the beginning of the 2010/11 academic year. What exactly are we voting for (or not as the case may be)? I also noted with disappointment that all of the proposed university reforms are focused on academics. Academics make up only between one third and a half of staff in Irish universities. Over the last decades the number of administrators in the third level sector has expanded radically, in my view, with very limited gains for customer services. As a result of benchmarking (adademic salaries were increased by 2%, admin salaries were increased by an average of 9%) their salaries exceed that of many academics. Why was there no focus on these third level staff? @ Michelle I have to agree. There seems to be bizarre expectations from what academics can offer as part of a solution to where we are. John Bruton in yesterdays IT piece had me scratching my head. Everybody seems to be in an ‘and’ state of mind, where academics can do this and this and this. When it will ultimately be a case of ‘or’ where this or this or this can be done, not this and this. It will be interesting to see what happends when all the extra students populate the third level institutes in Sept. How many classes can you fit in one lecture hall per hour? I have heard of one place asking to reduce lectures to 40 minutes to fit the classes in. Perhaps two different lectures occuring in one classroom at the same time? Comments are closed.