Sunday, December 13, 2009

Poor or Public Sector? Unparliamentary Language in a Post-Apocalyptic Budget 2010

This has been a bad week for the Irish public sector worker - we have been collectively hammered in the harshest most divisive budget in my memory at any rate. With taxpaying workers, it solely targeted the public sector for cuts, and despite the one day strike on November 24th and subsequent attempts at resuscitating union-government Partnership talks - which broke down at the 11th hour - there was an inevitability that nothing would make a difference and the decision on slashing pay was a fait accompli. There has been an increasing divide and rule fomented by the right - government and the employers bodies like IBEC and think tanks like the ESRI - in recent months to drive a wedge between the public and private sectors. As Joan Burton TD, Labour's finance spokesperson, said in her response to the budget, the low-paid public sector cleaner will constantly be reminded they are lucky to have a job and no doubt we'll all be reminded of this fact frequently in the future. Do we have to be grateful and not demand any more than the crumbs that fall from the private sectors' conspicuous absence of pay cuts? There was no increase in income tax which meant that the private sector felt no pain in the area of pay cuts, only the same as the rest of us in the carbon tax and other general increases like the drugs payments. All this to raise €4 billion, a fraction of the €54 billion given to bail out the banks but this time falling on those unable to circumvent the blow.

The budget targeted not alone the public sector for this unfair and unbalanced hit, but also hit the most vulnerable - social welfare recipients, child benefit, and carers - all had cuts to their payments except for the pensions paid to over-65s. The government learned to their cost last year that hell hath no fury like a pensioner with a grievance after they tried to remove the universal medical card for the over-70s in October 2008 budget - arguably the worst PR move since Garrett Fitzgerald's Fine Gael collapsed the government in 1982 over the proposed VAT on children's shoes. The jobseeker's allowances (dole) has been halved for the under-21 year olds, and reduced for under-24s. Those on disability and other long-term benefits will all be hit, and the universal child benefit paid to mothers - historically to give them a payment in their own right back in the days when women were chattels and had no right to own anything in marriage - has been cut by €16 per child. The excuse that we have generous social welfare rates is no reason to be so brutal in cutting these payments - hitting the captive audience of those on social welfare is a low blow as the cost of living is way higher here than in many other countries.

All in all, I will be down about another 6.5% direct pay cut on my gross salary. I know this will be slightly less when net income is calculated as I will have less tax and PRSI and levies to pay, but it is a real hit when you realise the public sector were hit with an obligatory pension levy back in May - for me, a 7.5% levy on my gross pay. So this year I have effectively had a 14% pay cut, which is draconian by any measure outside the IMF - in fact some of us feel the IMF taking over the government coffers would hardly be worse in their structural adjustments than the present Fianna Fáil/Green Party coalition. The IMF is trotted out like the bogeyman whenever there's outrage and uproar from people over the budget cuts, and the government thinks it can get away with anything as a result of this fear - along the lines of - if you think this is bad, what do you think would happen if the IMF took over? Well, some say 15-20% pay cuts across the public sector would result - hallo, what have we had in the past year? With income and pension levies, and this pay cut, that's exactly how much we have taken. So I am inclined to say - bring it on. At least it might weed out the corruption and pandering to vested interests we see in the current budget. Publicans, the motor industry and the private sector are the winners in this budget.

Did I mention the biggest joke of all? The excise duty on alcohol was reduced in order to make booze cheaper! No, this is not a clip from Father Ted or a letter to Santa written by Father Jack -it is for real - the budget saw a drop with immediate effect in the price of drink and the justification is to stem the flood of shoppers trekking to the North Face of Newry every weekend (and every strike weekday!) That the government thinks that knocking 60 cent off a bottle of wine will keep patriotic shoppers at home shows how far removed they are from reality. People shop in the North of Ireland for overall cheaper prices as Tesco, Lidl and Ikea are all cheaper there than in the south. As for the motor industry - that would be car showrooms and sales outlets - a scrappage scheme was introduced in the budget which will give a €1,500 trade-in on cars over 10 years old when a new low-carbon emissions car is bought. As most people can't afford new cars with that scrappage it will probably be totally ineffective but the car dealers are happy.

The only bright spot in an otherwise abysmally depressing week on the news front was the diversion in the form of Green Party publicity hound TD Paul Gogarty lashing out at Labour's Emmet Stagg yesterday in the Dáil in an unparliamentary outburst. He took exception to Stagg and other Labour TDs accusations of hypocrisy at his statement that the budget was unfair but he was voting with it nonetheless. It is best watched in the YouTube clip above - but you have been warned, there is no beeping out the unparliamentary expletives! Of course it lightened the day a little and he achieved his goal of yet again hogging the limelight as is his form - he has shown similar form in the past and relished the spotlight, but is generally viewed as a prat by the media and by most of the electorate at this stage, and his hectoring and heckling in the Dáil was becoming tiresomely predictable - until yesterday's meltdown brought him to a new level nearly as low as his rollover in front of Frances Fitzgerald.


Stephanie V said...

It's interesting reading your post...not much different here in Canada. It's the social sector (health, low-to-no-income, arts) that will suffer any budget cuts - and there are many. But somehow we have found the many, many dollars for the 2010 Olympics!

john said...

For a budget that had no changes in income tax rates per se, many people have had huge cuts in pay. The alcohol drop was interesting as they are hoping to encourage people not to go north and back into the pubs, but I can't see Downes' being busier for the 12cent

Catherine said...

Stephanie V - interesting to see the same pattern in Canada - a country that is always held up as a role model socially and economically in this part of the world! Maybe the right's priorities are the same the world over. Hitting easy sitting targets like welfare and civil service could become the starting point for countries in these hard times - hard because the so-called experts like the bankers were making wildly inaccurate investments with our money. Ireland is now giving back our money to the self-same banks - why? So they can wreak more havoc on society and pay themselves more hefty bonuses. We don't have Olympics but there are plenty of other white elephants we'll find no doubt!

Catherine said...

John - a new visitor to this blog I think - thanks for commenting. Spot on that the cuts were huge for some people despite the absence of tax cuts. I see your name links to a tax calculation site - I'm sure you'll be busy with all the post-budget calculations - good market niche - won't be needing the services as I get my trusty tax office to calculate my balancing statement every year and invariably get a refund - makes me wonder why the HSE makes so many mistakes in my deductions! I guess the private sector or self-employed make up most of your clientele - not that they'll have any enforced income cut. Where's Downes? If it's a pub it's either busy already or on its uppers from lack of custom! A stupid move to try and encourage patriotic duty!

Anonymous said...

The Father Ted clip gave me a good laugh. Thanks.

paddyanglican said...

Catherine - I fully agree with you re the wedge driven between the public / private sector which has been a distraction from the governments lack of a plan to get us out of this hole! I personally fell into the trap of the blame game myself but having looked into it more deeply I now see that whether public or private we are all having a bloody awful time! My wife is a private sector employer and has 40 staff - In the last year there are months when she has not been able to take a wage home herself while (and rightly so) her employees wages are protected. As a clergyman I earn more than she does and I earn the average industrial wage! Private Sector does not equal 'Wealthy'! She has not laid anyone off and staff have taken a substantial paycut to avoid job losses. I note your comment re the crumbs from the Private sector table and wonder if it does not fall into the same trap that those of us, myself included, fell into in knocking the Public Sector. Let's not do the divide and conquer thing! There are good and bad in all sectors! Love the blog and thanks for visiting mine.

Catherine said...

Stephen, thanks for the feedback on this post - it's good to get another perspective - I am not angry at the private sector per se - I just agree that the government used every opportunity to drive that wedge between both sectors notwithstanding that both are having hard times. Of course I see both sides of the coin as hubby is self-employed and in a vulnerable position and my son had to go back to do his Masters to get off the dole as he couldn't get work after his degree and then only got some part-time at minimum wage in his sector and had to become self-employed so he was exploited big time as he didn't have much business sense - thankfully his MA is with a view to the business end of graphic design. So I vented my anger in this post at the perps as I saw them - the govt. and the way they scapegoated us to deflect anger from the private sector toward the public sector. Fair play to your wife for trying to look out for her staff - she is taking an ethical stance, not like the big boys in the banks with their hefty salaries and bonuses. The latest thing slipped in over the Christmas period of reducing the pay cut for the senior civil servants (on over €165,000)to compensate for their loss of bonuses is going to inflame the masses at the lower end of the scale - a wedge between the ranks of the public sector. I dread what lies ahead in terms of industrial unrest, even though I am a staunch trade unionist I do not relish more action which may be futile, and cannot contemplate or afford strike action.
Thanks for visiting, I also commented on your Murphy report post.