Public pay policy will be blown if strike by gardaí succeeds

The response of the Government and, indeed, the entire political system to the threat by gardaí to go on strike will have a huge bearing on whether the 32nd Dáil can survive for long.

If gardaí get what they want the Government’s public service pay policy will be left in tatters, along with its budgetary strategy for the next few years, but the threat goes far deeper than that.

The fact that the upholders of the law are threatening to break the law in pursuit of their own self-interest adds a sinister dimension to a row over a pay claim. The challenge to the authority of the State is one the Government simply cannot afford to bow to on a point of principle, apart altogether from the financial implications.

The Opposition parties also face a challenge in how they respond to the claim by gardaí. If they countenance illegality for perceived short-term political gain they will do further damage to the credibility of the political system.

The fact that the Anti Austerity Alliance rushed out in support of the garda action says all that needs to be said about the folly of the approach being adopted by the bodies representing gardaí.

One of the features of Irish society is that gardaí are still held in wide public esteem despite a succession of scandals in which the force been embroiled over the past two decades.

It appears that the public has made allowances for gardaí in the light of the very difficult job they do, and the fact that, through thick and thin, the bulk of the force have maintained good relations with the communities they serve.

A strike by gardaí could do irreparable damage to the relationship between the force and the public it has a duty to serve.

Opening the door

In purely practical terms the Government cannot concede the pay claim without opening the door to similar claims across the public service. That would swallow up all of the extra €1 billion or so which is due to be given away in the budget for improved public services and limited tax cuts.

Minister for Public Expenditure Pascal Donohoe has so far taken a strong line against breaches of the Lansdowne Road agreement, and had persuaded most public service unions to sign up to gradual pay restoration to pre-crisis levels.

That policy will go out the window if the garda claim is conceded as all of the unions who have accepted the gradualist approach will feel they have been made fools of, and will inevitably pitch in with corresponding claims for immediate fully pay restoration.

The settlement agree with bus workers, coming on top of the concessions to Luas drivers in the first month of the Government’s tenure, has already strained the system to the limit.

Bus workers are not strictly comparable to the wider public service as they operate in the commercial semi-State sector, and tram derivers are in the private sector. Yet both settlements have fuelled expectations across the public service.

Imperative

Attempting to contain public service pay claims was already going to be difficult before the strike threat by gardaí, but it is now an even greater imperative.

The question for all the political parties is whether the limited fruits of recovery should now be spent providing better public services or giving more pay to public servants?

It should never be forgotten that the fundamental reason for the imposition of austerity measures in 2009 and the years that followed was because public spending vastly exceeded the revenue the State was able to generate through taxation.

The pressure to bring public service pay back up to pre-crisis levels is another indication that Irish society has learned little or nothing from the crash, and is on a headlong course to repeat the mistakes of the past.

The major political parties have contributed to the delusion, with Fine Gael pinning its colours so strongly to eliminating the Universal Social Charge and Fianna Fáil and Sinn Féin promising to abolish water charges.

The fundamental lesson of the crash was the need to broaden the tax base so that a sudden drop in one form of revenue would not have the capacity to undermine the whole system.

Instead the response of government since the recovery began has been to take a significant proportion of workers out of the income tax net without making up for that in other taxes.

Slapped down

The effect has been to create a very lopsided income tax system in which almost a third of workers pay no income tax at all, while middle and higher income earners pay relatively high rates of income tax.

Minister for Jobs Mary Mitchell O’Connor was publicly slapped down by Taoiseach Enda Kenny over a leak from her department suggesting a lower rate of income tax for returned emigrants. While the proposal is not tenable it reflected the difficulty the Irish tax system creates in attracting back skilled emigrants on good incomes.

For the forthcoming budget there is a broad political consensus that the bulk of extra available resources should be spent on improving public services rather than cutting taxes.

That is a direct response to the theme of fairness which dominated the election debate. The danger is that more public spending won’t necessarily improve public services.

There are incessant demands for more funding for the health and education sectors but there seems to be little appreciation in those sectors that serious reform is required to ensure that extra resources actually deliver better services.

What is needed is the political will to insist that extra resources are accompanied by reform.