THE GOVERNMENT has sought this year to save €75 million by cutting allowances paid to public servants. It is now struggling to achieve €3.5 million in savings, or 5 per cent of the 2012 target. Out of 1,001 public service allowances payable, it has abolished just one for existing employees. For the Government and for Minister for Public Expenditure, Brendan Howlin, such an abject failure has diminished the credibility of both.
Earlier this year the Minister was raising expectations of a successful review of allowances, indicating that savings of €75 million in 2012, and €300 million in later years were planned. Instead, the Government has performed a spectacular policy U-turn. It decided that making the cuts now might put the Croke Park agreement in jeopardy.
If so, one might well ask why the Government embarked on this review of allowances in the first place? Clearly, it tried and failed to achieve the changes sought, and its political misjudgment has been cruelly exposed. Yet again, the face-saving solution offered is to allow existing public servants to keep their allowances and to reduce – in some cases abolish – allowances for new entrants. But with a recruitment embargo in place, few will join the public service, and so savings are unlikely. New entrants as teachers, who are exempt from the embargo will, however, bear the brunt of such cuts. Newly qualified teachers will earn 20 per cent less than their counterparts did on entry to the profession two years ago. Yet again Croke Park has protected insiders, while outsiders have been penalised.
What could the Government have done? It could have decided sooner what it decided later. It could have accepted that allowances – invariably seen as core pay by the trade unions – were off limits for now. Or, it could have decided to accept some of the review’s recommendations, and not continued to pay allowances to serving staff, where the review said the payments were unjustified. It did not do so.
Or it could well have decided that the economic outlook had worrying implications for the budget and therefore justified a renegotiation of aspects of the agreement.
What indeed will our bemused international creditors make of all this as they see us borrowing to ensure some public servants can continue in the style to which they have become accustomed: underwear allowances for female members of the Defence Forces and official footwear allowances for gardaí.