Public service and the austerity era
Sir, – Your editorial (April 25th) contains the extraordinary assertion that “the unsustainable rise in public service pay in the first decade of the 21st century was the prime cause of the crisis in the public finances that led to austerity”. Some of us thought it was profligate lending by the golden untouchable circle to other members of that circle; others imagined it has something to do with a global financial crisis; still other innocent souls attributed it to our taxation system which eschewed taxes on property or wealth (that golden circle again) but was based, vulnerably, on property transactions and payroll taxes – both of which recouped a significant share of any public sector pay rises. And how much of our current massive national debt is attributable to our decision, taken under immense pressure, to bail out the unsecured creditors, while breaking, by fiat, the employment contracts of thousands of Irish citizens, and then to use public funds to rescue our collapsed property speculators? Incidentally, if your simplistic assertion is to be believed, what caused so many other countries to endure austerity for 10 years or more? Of course paying ourselves too much – in private and public sectors – contributed to our problems but I expect much better analysis from you than this right-wing cliché. – Yours, etc,
Dr KEVIN T RYAN,
Sir, – I was surprised at the shock expressed by letter-writers (April 26th) to the editorial’s opinion about the prime causes of the austerity crisis.
According to Unite’s Michael Taft, the banking crisis cost Ireland €41 billion – a vast amount of money, but not as vast as the more than €200 billion national debt accumulated since 2008.
Dissecting this figure, the banks account for 21 per cent of the national debt with the remaining 79 per cent (and rising) attributable to unremitting annual budget overspends. These overspends were fuelled by a similar clamour for pay parity during the boom years, only this time with the private sector. As demand fed demand, spend exceeded spend, public expenditure doubled between the years 2001 and 2008 (from €31 billion to €62 billion).
So while it may be convenient to blame the bankers for the austerity crisis, the harsh truth is that others played a significant role. – Yours, etc,