AT LAST, Ministers have begun to speak in unambiguous terms about the financial crisis facing the State. Savings of € 4 billion are planned for the December Budget, with € 1.3 billion coming from the public pay and pensions bill. That is likely to involve pay cuts, although savings can be made in other ways. Brian Lenihan spoke of the “stark reality” that the Government is no longer able to fund the system, while John Gormley suggested the choice for public servants lay between pay cuts and bouncing cheques.
The Government has resisted recommendations by the Taxation Commission for a property tax and a higher rate of income tax at this time. That sets a poor precedent, even if technical or strategic reasons can be adduced for the delay. If a perception of fairness is to be created in this crisis, a firm commitment should be given in the Budget to broaden the tax base next year. That could encourage a resumption of dialogue with the social partners.
Falling living standards hurt. But public servants, in spite of their anger and militancy at this time, are a privileged group. Successive, independent studies have identified those advantages. Even the most obtuse must now acknowledge their remuneration levels are well ahead of the private sector. It would be desperately unfair if impoverished welfare recipients had their benefits reduced while service suppliers remained unaffected.
The group styling itself Frontline Alliance, including nurses, gardai, prison officers and firefighters, has been particularly militant. Everybody appreciates the value of their work. But they are public servants. And if there is no money available to pay them, or if borrowing that money causes further damage to society, they have a responsibility to consider the public good.
Former public servant and economist Dr T K Whitaker identified this social obligation and concluded that shorter working hours or pay cuts are preferable to job losses. That, unfortunately, is the choice facing us. At a time when Ictu is urging the Government to make funds available to protect private sector jobs, it seems incongruous that public service unions should behave in this fashion.
Strikes are, invariably, an admission of failure. But a national day of protest is being arranged by Ictu while public sector unions are planning their own disruptions. Trade union leaders may be under such pressure that they regard limited industrial action as a necessary safety value. But it damages the broad national interest. It also puts off the time when they, too, must engage in straight talking with their members.
Irish attitudes towards job prospects and personal finance are the gloomiest in the European Union. Given economic difficulties and rising unemployment, that is understandable. But negative sentiment will not get us out of this mess. The Government has devoted most if its time in recent months to the Lisbon referendum and Nama legislation, with some effect. It must now sort out the public finances and protect existing jobs and do so without delay.