Salary cap failure has cost Coalition moral authority

Sat, Jul 7, 2012, 01:00

INSIDE POLITICS: Voters recently voiced their resentment over well-paid politicians’ expenses and advisers’ salaries

THE FOCUS on the pay and perks of politicians just won’t go away and neither will the controversy over the salaries paid to Government advisers.

Politicians attribute this to the media’s thirst for sensation but the issue actually goes to the heart of the crisis in the public finances.

It is not just that politicians should be seen to give a good example when sacrifices are being made by so many others. The more serious point is that they are so well looked after in terms of pay, pensions and expenses that they often appear to have no idea of what is happening in the real world.

One example of the cocoon effect is that Ministers and senior officials have made decisions about funding requirements that could well collapse what remains of the pensions industry. This had happened because they can’t grasp what conditions are like for people in the private sector.

The jaw-dropping pensions paid to former politicians and senior public servants is just one indication of how removed our political elite has become from the hardships faced by so many others.

What is really astonishing is how almost everybody in Leinster House, of all parties and none, adapt so quickly to maximising the perks of office, regardless of their political rhetoric.

It emerged during the week that Labour Party TDs were taken aback that people on the doorsteps in the recent referendum campaign expressed resentment at the big salaries paid to Government advisers.

That resentment was fuelled by the fact that on taking office the Coalition promised to cap the advisers’ salaries.

It is not just the Government that has shown itself to be out of touch. In recent weeks it has emerged that Sinn Féin is breaking the rules on declaring the use being made by the party of a big chunk of its TDs’ salaries.

Sinn Féin makes a virtue of the fact that it insists on its TDs making a big contribution from their salary to help the party but why that is necessary, given that it is in receipt of about €2.2 million a year in taxpayers’ money, is a moot point.

In recent days it emerged that United Left Alliance TDs were misusing their Dáil travel expenses to fund their campaign against the household charge. Using taxpayers’ money clearly designed to cover their own travel to and from the Dáil in a campaign designed to undermine the tax system took some effrontery.

It is not as if the TDs in question don’t have enormous sums of taxpayers’ money allocated for their use for political purposes in the first place. On top of their Dáil salary of €92,000 and their tax-free expenses of at least €30,000 a year, Independent TDs also get a tax-free leader’s allowance of more than €40,000.

As leaders of small parties both Joe Higgins and Richard Boyd Barrett get a considerably higher leader’s allowance. The Socialist Party and People Before Profit got €120,000 each for 10 months in 2011 and will get more this year. They have plenty of public money at their disposal for political campaigns without claiming personal Dáil expenses for the purpose.

The Dáil expenses regime is another thing that got out of hand during the boom years. TDs claim their expenses under two headings. One is for travel and accommodation and the other is called a public representation allowance. Most of the payments are in the range of €30,000 to €60,000 a year with the Dublin TDs at the lower end and those in more remote parts of the country at the other.

There is a distinction between vouched and unvouched expenses but mysteriously TDs from the same constituency opting for vouched expenses usually end up claiming precisely the same amount.

Only one TD, Labour’s Eamonn Maloney, has declined to take any expenses. He has not made a song and dance about it but it is probably no coincidence that he is a newly elected TD who previously ran an aluminium can recycling centre and clearly has some idea about the kind of wages most people manage to live on.

Of course TDs are entitled to a decent salary. It is just 101 years since salaries were first introduced for MPs in the House of Commons. Before that it was very difficult for people without wealth or sponsorship to become politicians and it would be very retrograde to return to that position by paying politicians too little.

However, Irish politicians are still well paid by any international comparison, getting more than British MPs and counterparts in many other EU countries. When expenses and pension entitlements are taken into account they are extremely well paid as are the public servants who are on similar salaries.

Public sector pay and pensions ballooned out of control in the first decade of the 21st century precisely because the salaries of senior officials and politicians were irrevocably linked in the late 1990s. Both groups became detached from the reality that applied to the rest of society.

The level of delusion that gripped the policymakers was illustrated by the recommendation of the review body on high-level remuneration in late 2007 that the taoiseach should be paid €310,000, making him the highest-paid leader in the world.

The subsequent furore led to the deferral of the award for the taoiseach and ministers but all of the other recommended pay rises were implemented, giving a range of already well-paid public officials further increases on the very eve of the crash.

The Coalition started off as if it understood the nature of the problem. Enda Kenny cut the Taoiseach’s salary to €200,000 with pro rata reductions for Ministers and TDs. It still left them well paid but no longer embarrassingly so.

Since then impetus has been lost and the failure to enforce the salary cap on advisers has not helped the Government to retain the moral authority it requires to impose further cuts on others.

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