Give me a crash course in… public pay and the cost of living

Latest step in unwinding industrial relations deals formed superstructure of public sector cost saving during the financial crisis is proving controversial

So what’s all this about more money for bigwigs?

This week it emerged that some of the best paid civil and public servants in the country — those on more than €150,000 annually — will see their annual pay packet swell by, in some instances, more than €20,000. This is not a pay rise, as such. It’s the final step of restoring swingeing recession-era cuts that hit everyone in the public pay, and the best-paid are seeing their money come back last. These cuts were called the Financial Emergency Measures in the Public Interest (FEMPI), and unwinding them has been a long and tortuous process that continued for over a decade. You might recall the Croke Park and Haddington Road agreements — the FEMPI legislation gave effect to those industrial relations deals that formed the superstructure of public sector cost saving during the financial crisis.

How much exactly are we talking here?

A lot. The Chief Justice’s restored wage is €295,916, up by €24,268; Supreme Court judges will see an increase of €21,147, and High Court judges will see rises of €19,936. Top doctors hired before 2012 will see increases of €10,852-€22,972, depending on the type of contract they work under; university chiefs will see similar increases of around €20,000.

No cost of living crisis around here then

Quite. Which is the political problem. The Government was committed to these increases under legislation it passed in 2017 — which, it must be said, was supported by the opposition. However, Sinn Féin have latterly said the then-Government slipped it in as a last-minute addition to the legislation.

Minister for Public Expenditure Michael McGrath sought legal advice on whether he could delay or defer the increase, but was effectively told: nothing doing.

One senior mandarin quipped during the week that the prevailing view among the poor unfortunates on €150,000 plus was that the legislation underpinning the deal was “legally ropy and could have been brought down [by] anyone who had a serious problem”, and had rested largely on the benevolent instincts of senior officials who “sat around and agreed not to do it”. The Government also felt it would only be a matter of time before someone, perhaps a retiree or a trade group, took a legal challenge.

So, the restoration will go ahead next month.

Is this related to the public pay talks and more action on the cost of living?

Not in any formal sense. The stalled public pay talks relate to a new deal for hundreds of thousands of public sector workers, many of them middle-income, and would not secure anything like the level of increase detailed above. Meanwhile, the cost of living crisis rumbles on with many in the Government resolute that it will wait until the budget before pushing the button on more interventions. But it’s hard to disentangle these threads for many people, who are pushed to the pin of their collar by the cost of living. When you’re peering out from behind a teeming stack of bills, all you might see could be more cash for “fat cats”.

What happens next?

The pay restoration will happen — meanwhile, there were hopes that public pay talks would resume this week but, as of Friday morning, there was no indication yet that they would be restarting. The Taoiseach, from Brussels, continues to hold the line on another cost of living package, not unreasonably citing wider concerns about financial management and budgetary stability, and the need to avoid an inflationary spiral — and the many hundreds of millions spent alleviating cost of living pressures so far. But, of the three, the only one that’s making tangible progress is the pay restoration, which brings us back to the core of the problem.

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a political reporter with The Irish Times