FG get finance, Labour get public sector reform

th3 s1aught3r · 06-03-2011 03:34PM #1

Surely it should have been the other way round....
Labour should be sorting out the banks and FG should be sorting out the public sector. Are they taking the piss with a Labour Minister, whose party are beholden to the public sector unions, are seriously going to reform the PS in any meaningful way ?

De Dannan · 06-03-2011 06:31PM

There will be no meaningful reform
Sindo
If anything, Fine Gael will be seen to have capitulated more as it is handing over responsibility for reform of the public sector to Labour, whose core support is drawn from the public sector.
The programme envisages no more than 22,000 voluntary redundancies in the public sector, a long way short of Fine Gael's election promise to reduce the numbers employed by 30,000.
Fine Gael is expected to defend this U-turn by stating that 2,500 voluntary redundancies have already taken place in the public sector since January

However, the Fine Gael decision to hand reform of the public sector to Labour will provoke fury among many Fine Gael TDs, and cause uproar among the huge numbers who voted for Fine Gael.
Furthermore, it reduces the Government's chances of re-negotiating the EU-IMF bailout since our public spending excess is seen as a chronic problem in Europe.

sollar · 06-03-2011 07:13PM

Labour have a better relationship with the public service and the unions. They are better placed to bring the public sector along. FG acting the big man would not have achieved half what labour will.

Flex · 06-03-2011 07:35PM

sollar wrote: »

Labour have a better relationship with the public service and the unions. They are better placed to bring the public sector along. FG acting the big man would not have achieved half what labour will.

I find this attitude very disappointing. With the state the economy is in and the terrible predictions on the horizon for the country, there are still sections of society who feel they should be mollycoddled and indulged by the government in order to agree to be 'brought along'... Left wing economic influence in the government will ensure we'll never get out of this mess, just as it did in the 1980's.

sollar · 06-03-2011 07:39PM

Flex wrote: »

I find this attitude very disappointing. With the state the economy is in and the terrible predictions on the horizon for the country, there are still sections of society who feel they should be mollycoddled and indulged by the government in order to agree to be 'brought along'... Left wing economic influence in the government will ensure we'll never get out of this mess, just as it did in the 1980's.

I don't see what the problem is with that. Do you think it likely that public servants are going to wish a heavy hand upon themselves.

BTW nobody is looking to be mollycoddled.

Bullseye1 · 06-03-2011 07:42PM

This will be a big point for Labour to prove to the rest of the electorate that public sector reforms can be achieved under their methods. Everyone including the dog on the street knows the public sector is bloated and is just too expensive in our current economic state. So how do the plan on reducing the huge wage bill.

gigino · 06-03-2011 07:48PM

sollar wrote: »

Do you think it likely that public servants are going to wish a heavy hand upon themselves.

Do not tar us all with the same brush. Many middle and top people in the public service know its unsustainable to continue with public sector wages amonst the highest in the world, given the country is one of the most bankrupt in the world. Spending on the public service doubled between 1999 and 2009. Reforming it now is not "wishing a heavy hand upon ourselves". We must thing of the good of the country as we are in a very serious situation.

As regards the OP's point, as someone else said putting Labour in charge of public sector reform is like putting a drug cartel in charge of drug reform.

3DataModem · 06-03-2011 09:04PM

Genius move by FG.

Swingeing PS cuts by Minister: Govt wins, Labour castigated.
No cuts by Minister; Labour castigated.

Worthy of FF themselves.

rumour · 06-03-2011 09:18PM

Flex wrote: »

I find this attitude very disappointing. With the state the economy is in and the terrible predictions on the horizon for the country, there are still sections of society who feel they should be mollycoddled and indulged by the government in order to agree to be 'brought along'... Left wing economic influence in the government will ensure we'll never get out of this mess, just as it did in the 1980's.

Disappointing is an understatement from my perspective. This government is doomed to deliver the 1980's.

Unity of purpose is out the window and jobs for the boys prevails. I just can't fathom it. The country will be maifestly insolvent shortly.....after agreeing a programme for recovery based on optimistic growth and tax receipts we said 2014.Now we've just abondoned that and say 2015 even as the income tax receipts fall.
All this left wing talk is such an utter indulgence, left wing right wing are no longer relevant, the first step of our new government is to promise the public sector their wages won't be touched and to tell the people funding these wages they'll have to wait another year for us to get it under control.

Brazen is a polite expresson, utter stupidity for the sake of immediate political expediency between labour and fg is another way of looking at it.

Ultimately all the election rhetoric has proved to be nonsense, what we get is a government that represents first the publicsector (croke park agreement) infront of everything else. The private sector can just shut up and pay more taxes or leave.

That appears depressingly now for me the only remaining viable option. Leave Lab and fg to handle the demise of a country whose main purpose to exist is to protect a public sector wage agreement at the expense of all else.

Uncle Ben · 06-03-2011 09:34PM

3DataModem wrote: »

Genius move by FG.

Swingeing PS cuts by Minister: Govt wins, Labour castigated.
No cuts by Minister; Labour castigated.

Worthy of FF themselves.

I would think that its FG that may have the problems. Lab has secured no cuts to sw, child benefit, no increase in college fees, a minor upward adjustment in their PS redundancy package and control of ps reform with Jack O Connor of Siptu/Ictu sitting on the LP NEC! All the above will leave very little room to manouvere for a FG party that promised cuts to tax increases on a ratio of 3:1

femur61 · 06-03-2011 09:36PM

I suppose in reality Labour have a better relationship with the PS. I am glad to see the hospitals will have funding determined on performance because the A&E in my local hospital is awful. Its an awful like the conditions set out by the IMF/EU!

rumour · 06-03-2011 09:37PM

Uncle Ben wrote: »

I would think that its FG that may have the problems. Lab has secured no cuts to sw, child benefit, no increase in college fees, a minor upward adjustment in their PS redundancy package and control of ps reform with Jack O Connor of Siptu/Ictu sitting on the LP NEC! All the above will leave very little room to manouvere for a FG party that promised cuts to tax increases on a ratio of 3:1

So the bearded brethern are back in power?

sollar · 06-03-2011 09:42PM

gigino wrote: »

Do not tar us all with the same brush..

Whats this us business gigino your not a public servant

gigino wrote: »

Reforming it now is not "wishing a heavy hand upon ourselves". We must thing of the good of the country as we are in a very serious situation.

Don't put words in my mouth. I never said reform is wishing a heavy hand. The public service is ripe for reform now and if handled in a reasonable fashion will work out well imo.

I know plenty of people want the sledgehammer taken to it but thats not going to work. 300,000 people aren't going to be battered into submission.

Uncle Ben · 06-03-2011 09:43PM

rumour wrote: »

So the bearded brethern are back in power?

I believe so, didn't JOC speak at todays conf. seeking a vote for approval.

sollar · 06-03-2011 09:45PM

rumour wrote: »

Ultimately all the election rhetoric has proved to be nonsense, what we get is a government that represents first the publicsector (croke park agreement) infront of everything else. The private sector can just shut up and pay more taxes or leave.

Are you forgetting that they are going to leave dole intact too and child benefit. Why aren't you calling for these to be cut. After all the social welfare bill is 22 billion. The PS paybill is 17 billion.

rumour · 06-03-2011 09:53PM

sollar wrote: »

Are you forgetting that they are going to leave dole intact too and child benefit. Why aren't you calling for these to be cut. After all the social welfare bill is 22 billion. The PS paybill is 17 billion.

To me social welfare applies to all citizens of the republic. I don't agree with fraud and perhaps it is excessive but the bill has gone up because of the recession, a prudent government would save for the rainy day and plan for this eventuality.....instead what we have are massively bloated public sector pay levels and maintaining them is more important than anything else on the agenda of this government.

sollar · 06-03-2011 09:59PM

rumour wrote: »

To me social welfare applies to all citizens of the republic. I don't agree with fraud and perhaps it is excessive but the bill has gone up because of the recession, a prudent government would save for the rainy day and plan for this eventuality.....instead what we have are massively bloated public sector pay levels and maintaining them is more important than anything else on the agenda of this government.

22 Billion on welfare and the state is bringing in 32 billion. It couldn't be more obvious where the real problem lies.

rumour · 06-03-2011 10:20PM

sollar wrote: »

22 Billion on welfare and the state is bringing in 32 billion. It couldn't be more obvious where the real problem lies.

What should we do let them starve?

This, with good governance is a transitory problem...public sector wages are a completely different permananet issue.

By the way I do not think welfare should be an incentive not to work. Just that it is our last defense as a nation for our citizens. It ismore important than the wages of government employees. Thats my opinion which is obviously not the same as the governments.

Amhran Nua · 06-03-2011 11:38PM

sollar wrote: »

Are you forgetting that they are going to leave dole intact too and child benefit. Why aren't you calling for these to be cut. After all the social welfare bill is 22 billion. The PS paybill is 17 billion.

For some fun with numbers, that's almost €55,000 per public sector worker per annum, with an average industrial wage of just over €30,000 per year.

sollar wrote: »

22 Billion on welfare and the state is bringing in 32 billion. It couldn't be more obvious where the real problem lies.

400,000 people receiving €200 a week comes to €4 billion a year. The problems are a bit more nuanced than dole recipients, I would start by pointing out that up to a third of local authority budgets are being spent on social and affordable housing purchased at above market rates from whoever. The entire programme needs to be restructured to take advantage of collapsing house prices and the removal of clientelism by local politicians. There are a lot more areas to be considered, but that's one good example to start with. Portacabins, quangos, the list is extensive.

gigino · 06-03-2011 11:53PM

Amhran Nua wrote: »

For some fun with numbers, that's almost €55,000 per public sector worker per annum, with an average industrial wage of just over €30,000 per year.

When you look at it like that, its astonishing all right.
Is there any other country ( especially a bankrupt country ? ) in the world where average public sector pay is so much more - € 25,000 per year more according to the above figures you supply - than average industrial wage?

th3 s1aught3r · 07-03-2011 12:13AM

gigino wrote: »

When you look at it like that, its astonishing all right.
Is there any other country ( especially a bankrupt country ? ) in the world where average public sector pay is so much more - € 25,000 per year more according to the above figures you supply - than average industrial wage?

I cannot see how we can really go to Europe and ask for favours when we are spending so much day to day in public sector wages and systemic waste. They will just laugh at us

Amhran Nua · 07-03-2011 12:41AM

th3 s1aught3r wrote: »

I cannot see how we can really go to Europe and ask for favours when we are spending so much day to day in public sector wages and systemic waste. They will just laugh at us

As I understand it, most European countries have a higher per capita spend on public sector wages, albeit because they have large modern militaries. Also, if you fired the entire public sector to the last man, you wouldn't be breaking even.

Lookit, lads and ladies, the point I'm trying to make is there is no sword of Alexander to cut this Gordian knot. It must be a careful, detailed analysis of every aspect of expenditure and income, and here's the vital part, exchequer and non exchequer, culminating in equally careful and detailed cuts and restructuring.

You won't find your answers in a discussion forum, and you won't find them without a lot more information than we, the great unwashed, presently have access to. If you want action, press for more information.

Amhran Nua · 07-03-2011 01:00AM

A little support for the previous comment, as that has become de rigeur for this forum, which is a good thing:

There is a widespread assumption that The Exchequer Accounts represent the Government Accounts. This is not true.

The Exchequer Account only represents money which actually passes through the Exchequer Account in the Department of Finance. There are a multitude of government receipts and expenditures that do not pass through the Exchequer Account. These should form part of any analysis of our public finances.

Yet, time and again it is the Exchequer Accounts that get the only media exposure. One reason for this is that they are released every month and are available in a readily digestible form. A second reason is that many commentators and observers simply show no inclination to verify the statistics they use and go with the most accessible information.

Just one example should be enough to highlight the relative uselessness of depending on the Exchequer Accounts as a measure of the overall Public Finances. Government revenue is examined below the fold.

Most months we examine the tax figures from the Exchequer Accounts. This is useful as a gauge of the patterns in tax revenues in the economy. See posts here. However, not one of these posts mentions PRSI, Motor Tax, or Commercial Rates.

Do I just leave them out? Of course not. These taxes do not form part of The Exchequer Account so we do not get monthly statistics on them. These are significant sources of revenue for the government.

The Exchequer Accounts reveal a tax revenue in 2009 around €32.5 billion. This figure is broadcast far and wide as the government’s tax take. This is not true. It might come as a surprise to many to hear that the tax take in 2009 was actually €44.6 billion. This is a substantial difference. Here are the 2009 figures from the Central Statistics Office.

The Exchequer Accounts include some measures of non-tax revenue. Current non-tax revenues include surplus incomes, royalties, interest, dividends from semi-state companies and other receipts. Capital revenues include some EU receipts, loan repayments, and sale of state assets. These came to €1,728 million. Added to tax revenue above this gives a total of €46,350 million.

And even then this is not a measure of total government revenue. There are a huge range of charges, fees and fines levied by government departments that do not flow through the Exchequer Account yet clearly form part of government revenue.

In the parlance of our public finances, these are called “Appropriations in aid”. All of the non-exchequer taxes listed above are defined as appropriations in aid. In fact, some of them don’t even appear in the overall central government account. For example, Motor Tax and Rates are paid to local authorities.

At this point a definition is required of “appropriations-in-aid”. We can get one from page three of The White Paper.

Appropriations-in-aid: These are receipts which may be retained by a Department or Office to offset expenditure instead of being paid into the Exchequer Account of the Central Fund.

The expenditure figures quoted in the Exchequer Account are net of these appropriations-in-aid. These monies aren’t counted by the Exchequer because they stay within the relevant department. If we want to get a measure of how much money the government is collecting we should add these receipts and if we want total expenditure we should look at the gross expenditure figure.

These appropriations-in-aid form a substantial part of central government revenue but because they still within the department that collects them they do not form part of the Exchequer revenue. I repeat – the Exchequer Accounts do not represent the public finances.

In 2009 these “appropriations in aid” totalled €15.9 billion. See Table 1 on page 16 here. This is €15.9 billion of government revenue which is ignored in the public debate because it does not form part of the Exchequer Account. In 2000, this figure was €2.2 billion and in 2005 this was €9.7 billion.

It is rather difficult to determine how this figure is broken down but a good place to start is the €9.7 billion the Department of Social Welfare received from the Social Insurance Fund for social welfare payments.

Here are some of the main appropriations in aid collected by departments and government agencies in 2009 (taken from here).

Although some come from external source (EU) most of this comes from our pockets. If we avoid double counting PRSI contributions to the Social Insurance Fund and the Broadcasting License Fee we find that government revenue in 2009 was closer to €53 billion. This is the €44.6 billion in tax revenue, the €1.7 billion in non-tax revenue, and roughly €6.5 billion of revenues excluded from these categories that are classified as “appropriations-in-aid”.

And even then this is still an underestimate of government revenue. While it does include Motor Tax and Commercial Rates collected by local authorities, it still omits commercial water charges, domestic service charges, parking charges and fines, and a whole range of other charges levied by local authorities. In 2009, local authorities collected €3.6 billion in addition to the receipts already mentioned.

With all this included we find that total government revenue in Ireland in 2009 was approximately €56.5 billion euro. This is a long way from the €32.5 billion figure from the Exchequer Accounts that gets far more coverage than it deserves.

Here is what it looks like.

Analysts within my own group have looked over these figures and come up with considerably more severe numbers than the omnipresent €20 billion deficit, which would echo the ominous rumblings from the outgoing government, and the "ashen faces" of incoming politicians, but I'm unwilling to broadcast those numbers until I've analysed and verified them in their entirety.

hatrickpatrick · 07-03-2011 01:08AM

Flex wrote: »

I find this attitude very disappointing. With the state the economy is in and the terrible predictions on the horizon for the country, there are still sections of society who feel they should be mollycoddled and indulged by the government in order to agree to be 'brought along'... Left wing economic influence in the government will ensure we'll never get out of this mess, just as it did in the 1980's.

*sigh*

It was right wing anarcho-capitalism which got us IN to this mess in the first place. Or have you forgotten that?
I'm fairly sure having totally unregulated sections of the economy which can literally do whatever they want isn't something which would have been allowed under a left wing government.

gigino · 07-03-2011 01:53AM

hatrickpatrick wrote: »

It was right wing anarcho-capitalism which got us IN to this mess in the first place.

Bertie Ahern said he was a "socialist". He increased government spending to those who received government spending countless times, to levels higher than any socialist leader in the world. You cannot put all the blame on capitalism just because our government ran the country very badly, spent like there was no tomorrow, and allowed our banks to borrow vast amounts abroad to give out without proper regulation.

sarumite · 07-03-2011 08:58AM

hatrickpatrick wrote: »

*sigh*

It was right wing anarcho-capitalism which got us IN to this mess in the first place. Or have you forgotten that?
I'm fairly sure having totally unregulated sections of the economy which can literally do whatever they want isn't something which would have been allowed under a left wing government.

I think you maybe conflating the the causes of our debt to the causes of our deficit.

Tora Bora · 07-03-2011 09:48AM

Sooner this government falls the better, so we can put FF back in power.

zephyro · 07-03-2011 12:51PM

hatrickpatrick wrote: »

It was right wing anarcho-capitalism which got us IN to this mess in the first place.

Eh? The reason we're in this mess is because 1) the government guaranteed all the liabilities of the Irish banks and 2) the government increased spending hugely based on a temporary increase in tax revenues.

th3 s1aught3r · 07-03-2011 01:27PM

gigino wrote: »

Bertie Ahern said he was a "socialist". .

Bertie was whatever you wanted him to be

jimmycrackcorm · 07-03-2011 03:07PM

I'm surprised that the media and people in general haven't picked up on the key flaw in the public sector reform plan which is that it is solely composed of voluntary redundancy.

There's going to be no effort at picking out jobs that are superfluous or non-essential and instead we may end up with thousands of frontline staff gone and lots of highly paid useless mandarins still in place.

Sleepy · 07-03-2011 03:07PM

Is this not, in reality, playing directly into FF's hands?

It's safe to say that with Labour at the helm, public sector reform will be nowhere near the level it needs to be (it's simply impossible to bring it under control without taking an axe to staff or salary levels - and a strategy of voluntary redundancies will lead to the best and brightest of the PS leaving, not the deadweight).

So, assuming PS reform doesn't deliver and that FG have hamstrung themselves by acquiescing to demands to protect Welfare levels etc. it's safe to say we're not going to be getting out of this mess.

Fast forward to the next election:

Labour, have failed to bring the PS under control. Assuming they make any serious attempt to do so, they'll have lost much of their current PS vote. Assuming they don't, they'll lose much of their private sector voters who felt efficiencies and waste reduction were "fairer" than hitting payroll. Either way, they'll lose votes.

Fine Gael will lose votes for not delivering the PS reform they campaigned for. The fact that it was a Labour minister who failed in the task won't spare them the wrath of the electorate.

How could Fianna Fail "the all things to all men party" not manage to gain hugely in the following election?

FG get finance, Labour get public sector reform

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