What happens to the CPA in 2014 ?.

Rabidlamb

Normally these union agreements are being constantly negotiated to cover the lapse of the previous agreement.
I hear nothing from Unions or government to say what if anything will replace it.
Any soundings from the media on what the future holds ?.

fliball123

Rabidlamb wrote: »

Normally these union agreements are being constantly negotiated to cover the lapse of the previous agreement.
I hear nothing from Unions or government to say what if anything will replace it.
Any soundings from the media on what the future holds ?.

Hopefully its torn up before december 2011

RichardAnd

Rabidlamb wrote: »

Normally these union agreements are being constantly negotiated to cover the lapse of the previous agreement.
I hear nothing from Unions or government to say what if anything will replace it.
Any soundings from the media on what the future holds ?.

This thread will devolve into petulant arguing as it's releated to the public service. However, before that kicks off in earnest, I would add the caution that anything in releation to 2014 can only be speculation. It seems increasingly likely that the government will go against the deal at some point but as of yet, it's anyone's guess as to when that might be or to what extent. Wait and see.

Godge

Two possibile scenarios for 2014:

(1) We need another bailout: All bets are off, pay cuts are back on the agenda, as are compulsory redundancies

(2) We can go back into the bond markets: This can only be done if we are in a position to get back to a budget deficit of 3% or below. If we are back in the bond markets, and our finances are stable, there may be no need for pay cuts or redundancies. That doesn't mean that there will be pay rises either. A pay freeze, relaxation of the recruitment embargo, reversal of the pay cuts, reversal of the pension levy, reversal of the pension changes, these could all be on the table depending on the financial situation. Pay rises are extremely unlikely with the most likely scenario being a pay freeze for another 3-4 years in exchange for promises to focus any tax cuts on cutting income tax for the lower-paid (a but like 1987).

The point is there is no point in discussing either possibility until the 2014 bigger picture is clearer.

Pete_Cavan

Godge wrote: »

(2) We can go back into the bond markets: This can only be done if we are in a position to get back to a budget deficit of 3% or below. If we are back in the bond markets, and our finances are stable, there may be no need for pay cuts or redundancies.

But the €20bn question is; can we get back to a budget deficit of 3% or below without pay cuts or redundancies in the Public Sector?

Dr Galen

RichardAnd wrote: »

This thread will devolve into petulant arguing as it's releated to the public service. However, before that kicks off in earnest, I would add the caution that anything in releation to 2014 can only be speculation. It seems increasingly likely that the government will go against the deal at some point but as of yet, it's anyone's guess as to when that might be or to what extent. Wait and see.

This thread will not turn into what you describe above.

The OP has asked an interesting question, and why pretty hypothetical as no one knows what's around the corner, it could be an interesting discussion.

Any posters that try dragging this thread into the same old trench warfare nonsense should really think twice please. I think everyone is bored to tears with the sniping. Just put a wee bit of thought into what you are saying and we're all cool

Cheers

DrG

not yet

Pete_Cavan wrote: »

But the €20bn question is; can we get back to a budget deficit of 3% or below without pay cuts or redundancies in the Public Sector?

What 20bn would you be talking about. Its misinformed posts like this that make me sick to death of all the crap that's flung around.

sollar

The croke park agreement will run out in 2014. Thats it over.

Pete_Cavan

not yet wrote: »

What 20bn would you be talking about. Its misinformed posts like this that make me sick to death of all the crap that's flung around.

What exactly is "misinformed" about my post? What is the "crap" that I "flung around"?

I wasnt referring to any specific €20bn (although it seemed like a good figure to pick because that was roughly our budget deficit quite recently) and was merely pointing out that, IMO, the big money question for our economy is can we reduce our budget deficit to a sustainable level while maintaining our current public sector pay structure. Godge explained two possibile scenarios and I offered an alternate view to one of these.

You are free to dispute this if you so wish, but just deciding that another post is "misinformed" and "crap" without offering any opinions yourself doesnt really add much to the discussion.

sarumite

Godge wrote: »

Two possibile scenarios for 2014:

(1) We need another bailout: All bets are off, pay cuts are back on the agenda, as are compulsory redundancies

(2) We can go back into the bond markets: This can only be done if we are in a position to get back to a budget deficit of 3% or below. If we are back in the bond markets, and our finances are stable, there may be no need for pay cuts or redundancies. That doesn't mean that there will be pay rises either. A pay freeze, relaxation of the recruitment embargo, reversal of the pay cuts, reversal of the pension levy, reversal of the pension changes, these could all be on the table depending on the financial situation. Pay rises are extremely unlikely with the most likely scenario being a pay freeze for another 3-4 years in exchange for promises to focus any tax cuts on cutting income tax for the lower-paid (a but like 1987).

The point is there is no point in discussing either possibility until the 2014 bigger picture is clearer.

While I don't believe the pensions levy/changes should/would be reversed (both were an unfortunate necessity for the long term health of PS pensions), on the whole I agree with this post. However, the above discusses the situation in a "economic" sense, whereas the fact is the people who make the decisions are politicians and will all to often forgo the economically prudent option in favour of the politically feasable option.

Godge

Pete_Cavan wrote: »

But the €20bn question is; can we get back to a budget deficit of 3% or below without pay cuts or redundancies in the Public Sector?

If we don't get back to a budget deficit of 3%, we get option 1 which is all bets are off. We could get public service pay reductions, compulsory redundancies or it could be increased property taxes, service charges or reduced social welfare rates. Remember that at one time the amount spent on social welfare and public service pay were roughly equal. At this point in time social welfare expenditure is far ahead.

If we do get back to 3%, then there is no need for large scale public service pay cuts or redundancies. It will be time for a scalpel rather than a sledgehammer. See point 2 I made.

Remember this thread is about what happens after Croke Park and assumes Croke Park lasts until then. It is not about how much public servants should be cut in the interim.

Delancey

Can't see the CPA surviving to 2014 , all government targets relating to reduction of the deficit are predicated on growth rates that are now proving to be hopelessly optimistic.

Godge

Delancey wrote: »

Can't see the CPA surviving to 2014 , all government targets relating to reduction of the deficit are predicated on growth rates that are now proving to be hopelessly optimistic.

Well I can,

Child benefit cut by 25%
Introduction of property tax averaging €500 for all houses
Taxing of social welfare payments
Elimination of most tax reliefs
Increase of second home tax to €1000
Putting time limits on social welfare claimants
Cut from three to two the number of days you can work and claim social welfare
Increase school-going age to five
Eliminate transition year
Increase pupil-teacher ratio
Increase student service charge to €5000
Close more A&E in small hospitals
Close loopholes on capital gains tax
Close small schools


Lots of ideas there that will generate enough revenue or savings to reduce the deficit while not cutting basic social welfare rates, not increasing income tax rates and sticking to the CPA.

Tea drinker

Godge, did I read that right, you want all these changes before adjustng CPA?

RichardAnd

Tea drinker wrote: »

Godge, did I read that right, you want all these changes before adjustng CPA?

I'm pretty sure he was postulating what the government will do to avoid breaking the CPA and thus, loose the vote of thousands of public servants.

Zubeneschamali

Tea drinker wrote: »

Godge, did I read that right, you want all these changes before adjustng CPA?

It's not a question of what anyone wants, it's simply what the Government is committed to. They promised not to raise income tax or slash welfare, and to uphold the CPA, so things like the stuff on Godge's list are inevitable.

Godge

Tea drinker wrote: »

Godge, did I read that right, you want all these changes before adjustng CPA?

The government has made three promises

(1) Stick to the CPA, no pay cuts and no redundancies for public servants
(2) No cuts to the main rates of social welfare
(3) No increases in income tax rates


Ths list I made are all things that could be done to avoid breaking any one of the above three promises. I am not saying that they are the right things to do but they are things that are likely to be on the table to avoid breaking the promises. There are even more similar options but I only put down the ones that came off the top of my head.

Godge

Forgot to say for those out there paying taxes or on social welfare who are shouting and screaming for the CPA to be reneged on, the government, if it has to break a promise, will be better off breaking all three by a little bit rather than just one.

Zubeneschamali

Godge wrote: »

Forgot to say for those out there paying taxes or on social welfare who are shouting and screaming for the CPA to be reneged on, the government, if it has to break a promise, will be better off breaking all three by a little bit rather than just one.

Indeed, I think they should have done this day 1, minute 1 after the election, when people were still super-pissed-off at FF. They could have taken an immediate step towards closing the deficit gap and left things more positive-looking in the future.

Instead, everyone knows the worst is yet to come, and so consumer confidence remains at rock bottom.

sarumite

Godge wrote: »

Forgot to say for those out there paying taxes or on social welfare who are shouting and screaming for the CPA to be reneged on, the government, if it has to break a promise, will be better off breaking all three by a little bit rather than just one.

Technically the government wouldn't be reneging on the CPA itself, rather the promise to maintain the terms of the CPA (some may think I am just using semantics, though I believe there is a distinct difference) Under the CPA the government can walk away from it now and not break any of the terms of it. I am not commenting on whether they should choose the opt-out clause within the CPA or not, just that their commitment to it is purely discretionary at this point and not something inherent in the agreement itself.

Godge

sarumite wrote: »

Technically the government wouldn't be reneging on the CPA itself, rather the promise to maintain the terms of the CPA (some may think I am just using semantics, though I believe there is a distinct difference) Under the CPA the government can walk away from it now and not break any of the terms of it. I am not commenting on whether they should choose the opt-out clause within the CPA or not, just that their commitment to it is purely discretionary at this point and not something inherent in the agreement itself.

Yes you are correct technically, but to break that promise on the Croke Park Agreement and just target public servants would not work politically for them. If they have to break promises because FF f***ed up the country more than they thought (which will be the excuse), the best way of keeping people off the streets is to say to each group that you are all suffering a little rather than one group suffering a lot. Imagine they cut public service pay levels by 15% and left social welfare and tax untouched. It would inevitably lead to significant industrial unrest. It is much harder to go on strike when the government can say we are all in this together and everyone is suffering.

sarumite

Godge wrote: »

Yes you are correct technically, but to break that promise on the Croke Park Agreement and just target public servants would not work politically for them. If they have to break promises because FF f***ed up the country more than they thought (which will be the excuse), the best way of keeping people off the streets is to say to each group that you are all suffering a little rather than one group suffering a lot. Imagine they cut public service pay levels by 15% and left social welfare and tax untouched. It would inevitably lead to significant industrial unrest. It is much harder to go on strike when the government can say we are all in this together and everyone is suffering.

Currently imo one group has suffered more than the other two groups, though I would accept that the government shouldn't just bow to populist demands. That said, I would favour the government look toward a higher ratio of spending cuts compared to tax increases. Such a move would hit those largely dependent on government more than those largely independent of government spending, however government spending needs to reflect the reality of economy. Beyond 2014 I do not believe the government should enter agreements public, private or otherwise that shelter any specific group from the ongoing turmoil and decline in the Irish jobs market and serve only to ease the political burden of governing the nation. We need a government willing to make the politically difficult but economically sensible decisions 'going forward'.

Godge

sarumite wrote: »

Currently imo one group has suffered more than the other two groups, though I would accept that the government shouldn't just bow to populist demands. That said, I would favour the government look toward a higher ratio of spending cuts compared to tax increases. Such a move would hit those largely dependent on government more than those largely independent of government spending, however government spending needs to reflect the reality of economy. Beyond 2014 I do not believe the government should enter agreements public, private or otherwise that shelter any specific group from the ongoing turmoil and decline in the Irish jobs market and serve only to ease the political burden of governing the nation. We need a government willing to make the politically difficult but economically sensible decisions 'going forward'.

There are lots of opinions out there as to which group has suffered the most be it taxpayers, pensioners, social welfare recipients, public servants etc. The fact that they are all complaining leads me to suspect that they have all taken a substantive cut of one kind or another. It is the silent ones (esb workers?, single parent allowance?) that you have to watch.

As for your point about easing the political burden of governing the nation, remember that politics is the art of the possible. I heard Garret Fitzgerald say something along the lines that he went into politics to do no wrong and to try and do what was possible to make things better but that the two often clashed.

fliball123

Godge wrote: »

Yes you are correct technically, but to break that promise on the Croke Park Agreement and just target public servants would not work politically for them. If they have to break promises because FF f***ed up the country more than they thought (which will be the excuse), the best way of keeping people off the streets is to say to each group that you are all suffering a little rather than one group suffering a lot. Imagine they cut public service pay levels by 15% and left social welfare and tax untouched. It would inevitably lead to significant industrial unrest. It is much harder to go on strike when the government can say we are all in this together and everyone is suffering.

Now Godge there is no way we can make up the deficite just by hitting ps workers even I as an anti-Ps basher know this....I mean at present we are looking at the alter to your imaginary scenario where they cut PS wage by 15%..Which is cut everthing else and leave the ps wage untouched.....What should happen is along with say 15% cut in PS pay and pensions..Tax has to be raised by say 10/15% accross the board and the social welfare needs about 15/20% cut over the next 3/4 years...but it needs to be done fairly ... and I mean if you guys on strike for getting a paycut there will be little support other than other ps members and family....

sarumite

Godge wrote: »

There are lots of opinions out there as to which group has suffered the most be it taxpayers, pensioners, social welfare recipients, public servants etc. The fact that they are all complaining leads me to suspect that they have all taken a substantive cut of one kind or another. It is the silent ones (esb workers?, single parent allowance?) that you have to watch.

Not sure I agree with that fully to be honest. Some are simply better at getting their grievences into the public domain while others who have been hit harder are fractured and as such find it harder to get their voices heard. Just because you shout the loudest, doesn't mean you have been hit the hardest.

As for your point about easing the political burden of governing the nation, remember that politics is the art of the possible. I heard Garret Fitzgerald say something along the lines that he went into politics to do no wrong and to try and do what was possible to make things better but that the two often clashed.

I agree. Though considering the manner in which FF chose to throw money at a problem rather than meet it head on, choosing the poltically easy option doesn't always solve the problem. Sometimes the lack of political will is the only thing stopping the right idea from being implemented.

Godge

fliball123 wrote: »

Now Godge there is no way we can make up the deficite just by hitting ps workers even I as an anti-Ps basher know this....I mean at present we are looking at the alter to your imaginary scenario where they cut PS wage by 15%..Which is cut everthing else and leave the ps wage untouched.....What should happen is along with say 15% cut in PS pay and pensions..Tax has to be raised by say 10/15% accross the board and the social welfare needs about 15/20% cut over the next 3/4 years...but it needs to be done fairly ... and I mean if you guys on strike for getting a paycut there will be little support other than other ps members and family....

How many times do I have to say that I am not a public servant? I used to be a public servant (and I have family who are public servants) so I have some sympathy and understanding of their position. I also have an understanding of how the public service works from my time working there and where to get information about the system.

I have listed a whole heap of ideas earlier in this thread about how the government can keep its three promises not to renege on the CPA, not to cut basic social welfare rates and not to increase income tax rates. I do not say that my earlier list is the correct choice but implemented in full it could close most of the gap.