Pat Leahy: Irish politics is still based on dangerous giveaways

Unions and Opposition have a duty to act responsibly to avoid a repeat of the crash

Minister for Finance Paschal Donohoe. ‘For all Donohoe’s talk about prudence, he will give away more than €3.5bn in tax cuts and spending increases in 10 days’ time.’ Photograph: Brian Lawless/PA Wire
Minister for Finance Paschal Donohoe. ‘For all Donohoe’s talk about prudence, he will give away more than €3.5bn in tax cuts and spending increases in 10 days’ time.’ Photograph: Brian Lawless/PA Wire

If there was one thing I thought everyone was agreed on, it’s that there is no going back to 2008.

Lately, I’m not so sure. Strong economic growth is filling Paschal Donohoe’s coffers with fat tax revenues and there is a race on among special-interest groups to get their hands on the loot.

Front of the queue are the trade unions representing public-sector workers. They know that with a bulging exchequer, a minority Government and an election in the mid-distance, now is their chance to secure higher pay for their members.

Public-sector unions have often been successful at conflating the interests of the public service with the interests of public servants. Pay us more and you get better services. But it’s a wheeze, and they know it.

On Monday, all public-sector workers will receive a 1 per cent pay increase, the second such increase this year. Many will also have received increments, the automatic increases in salary based on length of service. Scheduled pay increases (not including increments) will cost €450 million next year.

So far, the Government can claim to be observing reasonable restraint on public pay. But it’s under pressure, and it’s beginning to creak a bit.

The administration folded on the pay increases for the 35,000 public servants taken on since 2012. The nurses were bunged a new deal on allowances (cost: €20 million) but they will almost certainly strike anyway. The teachers want “back pay” for the newer recruits.

It’s more or less accepted in Government that it will pay out to the workers in section 39 organisations, funded by but not directly employed by the State (estimated cost €68 million). The Defence Forces are the next group to be considered by the public pay commission, and they’ll get more money next year.

There’s more coming down the line. A Siptu conference in Cork next week will hear demands for further pay increases. Ditto a meeting of the hospital consultants.

It’s all going in one direction. At one recent meeting in Government Buildings one senior official warned his colleagues that it…

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