Elites must be tackled to keep support for reform

 

The key to getting and maintaining public support as the Government faces up to tough decisions on lowering costs is that those at the top – in the public or private sector – are seen to take the first hit, otherwise goodwill will evaporate, writes STEPHEN COLLINS

ENDA KENNY and his Government continue to enjoy a honeymoon with an electorate desperate for a new beginning, but unless they start making fundamental decisions in the coming months that are seen to be both tough and fair, the goodwill could quickly evaporate.

The jobs initiative to be unveiled on Tuesday has been described by the Taoiseach as a confidence-building measure and hopefully it will work on that level.

It is a pity, though, that big decisions on lowering costs right across the economy appear to have been put back to the autumn.

One worrying sign is that the jobs initiative is being funded by a raid on the pension funds of private sector workers who, on average, contribute more and receive far less in benefits than their counterparts in the public service. While the move may be unavoidable, it is a soft option stealth tax that does not augur well for the Coalition’s capacity to take on the really powerful interest groups that are blocking reform.

One of the reasons the last government became so unpopular was that when it belatedly faced up to the crisis in the public finances it started to cut from the bottom up rather than at the top down.

By contrast the Fine Gael-Labour Coalition started off by giving good example and imposing further cuts in the pay of the Taoiseach and his Ministers. The reform of the State cars regime was another welcome sign that Kenny and his colleagues understood the need to impress on the public that things had changed.

However, they will need to move on from symbolic acts to action that demonstrates that they are determined to tackle the privileged elites in Irish society before they start imposing further cuts on those lower down the social scale, particularly those dependent on social welfare.

The EU-IMF programme spells out that among the actions required by the end of September are legislative changes to remove restrictions to trade and competition in sheltered sections of the economy.

They single out in particular the legal, medical and pharmacy professions.

The programme also spells out the need for reforms to end disincentives to job creation in other areas and tight control of the social welfare system to ensure that people are encouraged to get themselves out of poverty traps.

The key to getting public support as it faces up to all of these issues is that those at the top, whether in the public or private sector, are seen to take the first hit.

High-earning lawyers, hospital consultants and doctors have so far escaped relatively unscathed, as have judges, academics and people at senior levels of State organisations.

Before people who work at weekends in the low-paid hospitality sector lose their entitlement to overtime payments, or those on jobseeker’s allowance face further cuts in benefit, there will have to be a demonstration that the top earners are bearing their share of the burden.

The EU-IMF programme is clear that costs have to be reduced right across the economy so that the country can live within its means.

In an earlier era we could have devalued the currency, but as that option is no longer available to us we have to cut costs. That involves opening up protected sectors to real competition.

People in the professions will argue that not everybody is earning large sums and that is undoubtedly true. A significant number of younger barristers now find it impossible to make a living, while young doctors have to overcome big obstacles before they start making a significant income.

The problem, which is mirrored throughout Irish society, is that middle-aged and older people are generally relatively well off, as long as they have a job or a pension, while younger people are finding it increasingly difficult to get a foothold on the employment ladder.

An OECD report published during the week showed that the most vulnerable people in Irish society are not the elderly but families with young children.

If there was actually real competition in the legal profession that reduced the exorbitant cost of litigation, it would not only help bring down costs in the economy, it would also, in the long run, create opportunities for those starting off.

The same principle applies in the public service. The fact that pay rates are high relative to other EU countries has resulted in a drive to cut the number of jobs to get the overall pay bill down. That in turn means that there are few, if any, employment opportunities for people coming out of college or school.

Rather than cutting the number of jobs in a society desperately short of employment opportunities, it would make far more sense to cut pay rates and create employment.

In political terms, though, the young and unemployed have no voice while the old and privileged are strident in defence of their interests and have access to decision-makers.

The recent meeting between the Chief Justice and the Taoiseach at which the concerns of judges were raised over budgetary changes that affect their pension arrangements is a case in point.

Enda Kenny rightly told John Murray that there was absolutely no prospect of an exemption for judges, but the fact that such a privileged group believed it had a special case is a clear demonstration of how little social solidarity exists in this country.

The judges are by no means alone in focusing on their own problems, to the exclusion of the common good, despite the fact that the country is in such peril.

The Government’s ability to face up to all the vested interests clamouring for special treatment in the coming months will determine this country’s long-term future.

Kenny and his colleagues would do well to recall the words of the American thinker John Jay Chapman who observed: “People who love soft methods and hate iniquity forget this; that reform consists in taking a bone from a dog. Philosophy will not do it.”