Pay deal highlights gulf between public and private sectors


Sir, – The Government’s claim that increasing the public sector pay bill by almost €906 million “is affordable and represents value for money” is an affront to reality.

One assumes that Minister for Public Expenditure and Reform Michael McGrath is aware that the State is running an annual deficit of some €25 billion and that the national debt is heading for one quarter of a trillion euro. Yet he wants to borrow more money to fund pay increases to a cosseted few who are shielded and insulated from the financial effects of the pandemic.

In fact, given that most haven’t sat in an office for the last 11 months, their costs of living have greatly reduced and one could argue that they are financially better off as a result of the pandemic and the State’s policy of working from home.

Contrast this approach with what’s happening in the private sector, where some 600,000 have lost their jobs, youth unemployment is running at almost 60 per cent, most businesses are shut and many will never reopen. Those that are open have engaged in drastic reorganisations, including wages cuts, in order to remain in business.

I’m not aware of any business or any prescribed business model that encourages long-term borrowings to fund non-productive wages yet that is what the State is doing by agreeing to these pay increases.

TDs are included in this giveaway – the same politicians with gold-plated pensions and generous expense regimes.

It’s madness and folly of the highest order. – Yours, etc,



Co Kildare.

Sir, – I understand the importance of the public services agreement; however, the announcement was unfortunate because it increased and emphasised a Covid divide. The stark contrast is that those whose income has not been affected by Covid are being looked after, while those on the pandemic unemployment payment are struggling on €350 maximum, which for many is a reduction in take-home pay, but also face a tax bill if their circumstances improve.

Whether TDs take the pay increase or not, they are looking after those not in a crisis and adding to a crisis of those on the pandemic unemployment payment by rigidly imposing a tax liability in a very uncertain world.

This is bad for morale, and undermines confidence that the Government has in fact got our backs.

Those who are fine get more, and those who are not paid by Government but engage in economic activity that is classified as non-essential are slapped with a tax bill as soon as they pick themselves off the floor.

Pandemic unemployment payment recipients should not be seen as a liability; they are the means by which spending will continue and the economy will recover, unless we take the cash out of their pocket.

Government should start looking at households as consumers that we need in order to maintain effective demand and get the economy back working for all of us.

How much income tax will be forgone if an amnesty is issued for 2020 and 2021 for income tax payable on the pandemic unemployment payment? And where would that cash be spent? Most likely in the local economy. The choice is to grow the local economy or reduce it so it is on a downward spiral, until ultimately the additional welfare bill would exceed the sum of tax liabilities forgone.

We need compassionate care, fairness – and joined-up thinking. – Yours, etc,



Co Dublin.

Sir, – Antaine O’Duibhir (Letters, February 24th) is surprised to read of another round of public sector pay increases at a time when the country is on its knees and about 650,000 are on the live register or in receipt of the pandemic unemployment payment. His surprise is understandable but there is no great mystery to it.

Minister for Finance Paschal Donohoe and Minister for Public Expenditure and Reform Michael McGrath never tired of telling us through 2020 that Covid-19 and Brexit, in their real and potential economic impact, were the defining events of this or of any recent generation.

They urged caution on us in our personal actions and on themselves in their stewardship of the public finances. They fairly admitted that many of the potential costs were simply unknown and that they had to plan for the worst.

And yet, before a single dose of vaccine had been administered in this State and two days before a decision was due on whether we would have a chaotic Brexit or merely a very expensive one, they agreed a new pay deal for State employees which will cost more than €900 million over three years (“‘Affordable’ new pay deal to cost €900 million”, News, December 12th).

Even in an age when we have been anaesthetised to the idea that anything is affordable if it does not cost billions of euro, this was surely the height of irresponsibility.

What will we taxpayers get in return? We are offered the usual guff – “the Government will seek to introduce new flexibilities and work practice reforms”. As ever, the costs are real and very quantifiable while the suggested benefits are just beyond reach.

You reported on the real deal last October long before it was negotiated. Fórsa wanted to put a new public service pay deal to its members before Christmas, and Kevin Callinan, its general secretary, warned that without a deal there would be no “peace clause” applying to industrial relations in the public service (News, October 27th).

Mr McGrath was listening. Against the backdrop of what he said are the most difficult economic circumstances imaginable, he wanted an agreement which will increase the pay of 340,000 public servants because it would “provide for certainty in public service delivery uninterrupted by strike action” (News, October 31st).

I can understand why Mr Callinan did not take the trouble to find a reason better than the threat of strike action to justify yet another raid on the stretched public purse; he knows this approach usually works.

But are we not entitled to expect a little better from the Minister for Public Expenditure (and, lest we forget, Reform)?

As my late father liked to say, it’s a great little country. – Yours, etc,



Co Mayo.