THE McCARTHY report should be assessed as “one among many aids” available to the Government in dealing with the financial crisis, general secretary of the Impact trade union Peter McLoone told the MacGill Summer School in Glenties, Co Donegal.
Sharing a platform with Colm McCarthy in a session entitled Reforming the Public Services – How and When?, Mr McLoone said the unions had been presented in negotiations with "a generalised wish-list, disconnected from staff and . . . services".
They had tried to negotiate on abstractions such as “redeployment”, “flexibility”, “outsourcing” and “shared services”.Such concepts “can only be real for any member of staff where they are applied to their personal working arrangements,” he said.
This dilemma could be resolved by devolving the detail of change and transformation. “Give the available budget to those who have operational responsibility for managing and delivering services, and let the people who know the services – and know the communities they serve – agree the changes and flexibilities needed,” he said.
He was aware that there was “another course of action” being contemplated – simply to cut services and the pay of public servants.
These ideologically driven advocates used the simple language of balancing the books and regarded the maintenance of quality public services as at best secondary – at worst irrelevant, he said.
“Their main target is a substantial reduction in public service pay,” he said. “It is equally clear that they have more than one ear in Government, whose refusal to rule out public service pay cuts speaks volumes.”
He warned: “If the Government attempts to go down the alternative road – of imposed cuts in pay and pensions, or compulsory redundancies – there will be a reaction which will include sustained, widespread and painful industrial actions, including strikes.”
Chairman of the Special Group on Public Service Numbers and Expenditure Programmes, also known as “An Bord Snip Nua”, Colm McCarthy told the summer school: “Our national balance-sheet is out of kilter.”
There was a misconception that economic growth had halted only recently. But the slowdown had occurred several years ago and he illustrated his point with a chart headed: “Tiger Checked Out Around 2002”.
He said an awful lot of Government revenue was coming from property but, now, that revenue had fallen off a cliff. Nevertheless, Government spending this year was well ahead of 2008.
Meanwhile, the State was borrowing €400 million a week. The deficit was just below 11 per cent of GDP and this was quite unsustainable. Added to this was the cost of rescuing the banks, which was unknown at this stage.
The basic choice for the Government was to raise taxes or cut spending. “Significant tax increases have already been imposed,” Mr McCarthy said. “The Government has stated it is anxious to avoid further heavy tax increases.”
As for the report of the group, he said: “The proposals are a set of options for the Government, that’s all they are.” But he pointed out that, a fiscal consolidation is simply unavoidable and, if the Government did not deal with the matter, somebody else would.