Public sector pay increase

ardmacha · 28-04-2015 06:01PM

BoatMad wrote: »

primary issue with state funding was the current deficit , that was unconnected to the banking re finance. That state deficit is directly connected to the PS employment costs , which are the biggest single item in that current budget.

The biggest item in the State budget is welfare payments.

Look at the PS expansion from 1995, we have over 100,000 extra PS staff, these all have to be paid for.

Indeed, and the population of the state has increased by 30%.

Banking debt was primary raised via raiding the pension reserve ( no borrowing ) and promissory notes ( in effect printing euros)

True, the PS paid for this through their pension reserve. No doubt people appreciate this.

Riskymove · 28-04-2015 06:03PM

darkpagandeath wrote: »

What if there are no fires to put out ? Do you keep a high volume of staff just in-case ?

The question is still about individual fireman performance and you keep raising a different issue

on that other issue, if there are no fires in 2014 does that mean there will be none in 2015?

is that how you would base service levels?

BoatMad · 28-04-2015 06:03PM

KomradeBishop wrote: »

The thing about full employment, is that economies should be working at full employment 100% of the time - because when you think about it, when you have workers and resources/industry laying idle, that is a massive inefficient waste, which keeps our GDP far below potential.

If you have large public debts, you pay them off faster when you have full employment, as you're getting the most out of your economy then (and that keeps tax income at its maximum potential as well) - even if that means staying in high deficits, by (sustainably) increasing debt at the beginning, so government can employ the workers the private sector doesn't want (both providing employment, and boosting money going into the private sector).

The main important thing, is that you just need to avoid placing investment/employment into sectors of the economy going through a bubble - such as the property bubble in the 2000's; you can aim taxes at sectors going through a bubble, to deflate the bubble.

Well its not so simple, keeping an economy " on the boil" , is very difficult as the lag time in resource provision is often much longer then the changes happening in real time.

while what you say is technically correct, its very difficult to sustain and manage, ecomonies are always growing and declining

osarusan · 28-04-2015 06:04PM

darkpagandeath wrote: »

What if there are no fires to put out ? Do you keep a high volume of staff just in-case ?

"No fires to put out lads, go home."

"No emergencies right now lads, park the ambulances and off you go."

Utterly simiplistic.

Yes, you keep the appropriate volume of staff just in case, with 'just-in-case' being based on reliable statistics and projections and erring on the conservative side.

Riskymove · 28-04-2015 06:05PM

Galwayguy35 wrote: »

Also many private sector workers, myself included ofton have to work weekends for a flat rate.

I have worked weekends for free in the PS.....so where does that leave the discussion?

darkpagandeath · 28-04-2015 06:05PM

Riskymove wrote: »

The question is still about individual fireman performance and you keep raising a different issue

on that other issue, if there are no fires in 2014 does that mean there will be none in 2015?

is that how you would base service levels?

Nope would go on historic data keep a reasonable reserve then discard any that are not needed. On the other hand other posters are saying keep them just in-case.

Riskymove · 28-04-2015 06:06PM

darkpagandeath wrote: »

Nope would go on historic data keep a reasonable reserve then discard any that are not needed. On the other hand other posters are saying keep them just in-case.

do you think we have too many firemen?

darkpagandeath · 28-04-2015 06:06PM

osarusan wrote: »

"No fires to put out lads, go home."

"No emergencies right now lads, park the ambulances and off you go."

Utterly simiplistic.

Yes, you keep the appropriate volume of staff just in case, with 'just-in-case' being based on reliable statistics and projections and erring on the conservative side.

Yes and if they are overstaffed you shed some.

darkpagandeath · 28-04-2015 06:07PM

Riskymove wrote: »

do you think we have too many firemen?

Jesus, this is all on a hypothetical proposed by someone else now who's moving the goal posts ?

Riskymove · 28-04-2015 06:10PM

darkpagandeath wrote: »

Jesus, this is all on a hypothetical proposed by someone else now who's moving the goal posts ?

I asked to show that this is a pointless aside to the discussion about performance management

so perhaps we can either stick to talking about the issues around that or just leave it altogether

If there are surplus staff with insufficient work in any PS area then redeployment to an area that needs staff followed by redundancies should be carried out. It is that simple

but it has little to do with either pay or performance management

BoatMad · 28-04-2015 06:10PM

ardmacha wrote: »

The biggest item in the State budget is welfare payments.

when you add PS pay and pensions , you are tieing for first place

see https://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=9&ved=0CFMQFjAI&url=http%3A%2F%2Fwww.per.gov.ie%2Fwp-content%2Fuploads%2FExpenditure-Report-2014.pdf&ei=9r0_Vb-CIdSp7AaAzYDAAQ&usg=AFQjCNHqhMtn_2HWME0rwiu9mFYg3hemXw&sig2=8ilTM00bhXX1kg2iP6QX5g&bvm=bv.91665533,d.ZGU

Indeed, and the population of the state has increased by 30%.

no linear relationship has ever existed.

True, the PS paid for this through their pension reserve. No doubt people appreciate this.

No they didn't, the reserve was money out aside from previous Gov surplus , the PS maintains in effect no reserve

test3test · 28-04-2015 06:13PM

uch wrote: »

Debt level was caused by Banking, a Private industry, nothing to do with PS

And who was supposed to regulate and control the banks and the economy?

The regulator, the central bank, the dept of finance, the government....all public service.

Now people on the PS want a payrise and yet we still are borrowing many billions per year and the country owes 200 billion debt .... no way should the government award pay rises. There are lots of other areas that were decimated during the crash. The public servise is still overpaid.

darkpagandeath · 28-04-2015 06:15PM

Riskymove wrote: »

I asked to show that this is a pointless aside to the discussion about performance management

so perhaps we can either stick to talking about the issues around that or just leave it altogether

If there are surplus staff with insufficient work in any PS area then redeployment to an area that needs staff followed by redundancies should be carried out. It is that simple

but it has little to do with either pay or performance management

Of course it does, Doing more with less like the private sector. You don't need 2 people to do 1 persons amount of work for example.

jcon1913 · 28-04-2015 06:15PM

KomradeBishop wrote: »

Study economics and the economic crisis - it's a bit more complicated than 'all borrowing = bad'.

Well can you explain why you borrow more when you are up the creek with debt already? I havent time to debunk a theory if you cant explain it in a few paras.

KomradeBishop · 28-04-2015 06:16PM

Iwasfrozen wrote: »

I'm glad you seem to agree long term money borrowed to fund wages is a bad idea.

Borrowing money when the interest rate is low is not automatically a good thing. The profit investment needs to be greater than the cost of the loan.

I didn't agree, I haven't commented on that - I avoided the "how to [not] spend", and focused solely on how debt sustainability shows increased spending is possible (without getting into what people think the best way to configure that spending is).

Government borrowing doesn't work on the basis of profits, because government finances don't work like business finances - with governments, a better measure of the success of spending is GDP growth.

If government spends money gained from low-interest debt efficiently - say, on a high benefit infrastructural project - the increase in GDP will improve overall debt sustainability and will increase tax intake for paying down debts.

However (and this is very important): Even if government spends that money in a completely inefficient way - e.g. something silly like paying people to dig holes in the ground and fill them up again - that is still flooding money into the private economy, which itself will still increase GDP and tax intake, which can still provide a net-gain in debt sustainability (albeit far less of a gain than the previous scenario).

Obviously, the money should be spent in as efficient a way as possible - but if you see my point there, no matter how it is spent, it is still our ticket to a speedy economic recovery.

Señor Fancy Pants · 28-04-2015 06:21PM

Just for a bit of transparency.

With a total of 15.5 years service, 1.5 years at my current rank. A 2% pay restoration for me is about €15 per week before tax.

KomradeBishop · 28-04-2015 06:21PM

BoatMad wrote: »

Well its not so simple, keeping an economy " on the boil" , is very difficult as the lag time in resource provision is often much longer then the changes happening in real time.

while what you say is technically correct, its very difficult to sustain and manage, ecomonies are always growing and declining

I agree that, if you are relying only on the private sector to provide full employment, it is very difficult - I'd actually say it's not possible, if relying only on that.

If, however (and this seems to be a taboo topic), you have government employ workers that the private sector does not presently want (say, on infrastructural projects that increase economic efficiency), then you can have permanent full employment, so long as you have sustainable public debt.

You are right that resource provision i.e. supply of resources may lag, and yes this will cause inflation - but the simple solution to that, is to have an inflation target (e.g. 2%, like central banks tend to), and just stop increasing spending when that's reached.

Eventually, the markets will automatically fix the supply problem, bringing inflation back down, and then you can push spending again - and keep doing this until you reach full employment.

BoatMad · 28-04-2015 06:25PM

KomradeBishop wrote: »

I agree that, if you are relying only on the private sector to provide full employment, it is very difficult - I'd actually say it's not possible, if relying only on that.

If, however (and this seems to be a taboo topic), you have government employ workers that the private sector does not presently want (say, on infrastructural projects that increase economic efficiency), then you can have permanent full employment, so long as you have sustainable public debt.

You are right that resource provision i.e. supply of resources may lag, and yes this will cause inflation - but the simple solution to that, is to have an inflation target (e.g. 2%, like central banks tend to), and just stop increasing spending when that's reached.

Eventually, the markets will automatically fix the supply problem, bringing inflation back down, and then you can push spending again - and keep doing this until you reach full employment.

I agree that we should be dramatically increasing capital spending, roads, water and waste systems etc. current spending that continues forever , is different and most be controlled.

We should be throwing money at infrastructure , ( at I suspect soon we will )

KomradeBishop · 28-04-2015 06:26PM

jcon1913 wrote: »

Well can you explain why you borrow more when you are up the creek with debt already? I havent time to debunk a theory if you cant explain it in a few paras.

Whether or not you can sustainably borrow more, does not depend upon the overall level of debt, it depends on the interest you pay on that debt - forget the overall debt, and look at the interest payments.

When debt has extremely low interest rates - as it does now (the lowest interest rates for 30+ years, if not way longer) - you can expand debt sustainably.

The real question of how sustainable debts are, is: How much interest are we paying on all of our public debt, as a percentage of GDP?

osarusan · 28-04-2015 06:27PM

Truffle Pig wrote: »

Just for a bit of transparency.

With a total of 15.5 years service, 1.5 years at my current rank. A 2% pay restoration for me is about €15 per week before tax.

LOOK AT YOU AND YOUR MANSIONS!

BoatMad · 28-04-2015 06:29PM

KomradeBishop wrote: »

Whether or not you can sustainably borrow more, does not depend upon the overall level of debt, it depends on the interest you pay on that debt - forget the overall debt, and look at the interest payments.

When debt has extremely low interest rates - as it does now (the lowest interest rates for 30+ years, if not way longer) - you can expand debt sustainably.

The real question of how sustainable debts are, is: How much interest are we paying on all of our public debt, as a percentage of GDP?

well there is a constraint in a fiat currency, and that is the broad money market view of soverign debt sustainability. Once you manage that then you can increase debt

KomradeBishop · 28-04-2015 06:29PM

BoatMad wrote: »

I agree that we should be dramatically increasing capital spending, roads, water and waste systems etc. current spending that continues forever , is different and most be controlled.

We should be throwing money at infrastructure , ( at I suspect soon we will )

Well we're agreed with that anyway

That, infrastructure, seems to be much more of an agreeable/less-thorny topic than wages.

Señor Fancy Pants · 28-04-2015 06:30PM

osarusan wrote: »

LOOK AT YOU AND YOUR MANSIONS!

How dare you talk to me! Direct any comments through my butler!

bjork · 28-04-2015 06:30PM

osarusan wrote: »

No you didn't, you should they should put out more fires, and faster.

For heart surgeons, you said they should do more operations.

When the utter stupidity of this was pointed out to you, you moved the goalposts.

Well, I have now then. Hopefully in a manner suitable for your liking. :rolleyes:

Show me where the utter stupidity is?

How would you rate performance? Whoever wins the game of poker?

smurgen · 28-04-2015 06:34PM

Riskymove wrote: »

what if Government wont replace vacancies and there are not enough firemen to tackle all the fires

what if they don't get the equipment needed

what if Govt close wards and cut Health budgets

In any of those instances pay increases for current staff would be indefensible.

KomradeBishop · 28-04-2015 06:40PM

BoatMad wrote: »

well there is a constraint in a fiat currency, and that is the broad money market view of soverign debt sustainability. Once you manage that then you can increase debt

That's true with the Euro, yes, because Ireland does not have control over the currency. It would be less true for the UK though, as (and this is getting into a different topic) their ability to issue money, means they can avoid ever defaulting on debts if they want.

What I've been discussing in this topic - which many people (even of the free market variety) seem to find very agreeable - is actually MMT (Modern Money Theory), but without the money creation (which is something that people have such a strong kneejerk reaction to, that they are unable to discuss it), with low interest public debt taking its place instead.

If you think about it - low interest public debt, where the ECB is presently printing money to buy government bonds off of banks right now, who in turn buy the bonds off government, is pretty much the same end result, just with a few more layers of abstraction.

ardmacha · 28-04-2015 06:43PM

BoatMad wrote: »

ardmacha wrote: »

Indeed, and the population of the state has increased by 30%.

no linear relationship has ever existed.

Really? Demand for public services is not connected to population? So, for instance, the third of the PS who work in education are not connected to the number being educated and the increase in the number attending third level etc.?

Iwasfrozen · 28-04-2015 06:56PM

KomradeBishop wrote: »

I didn't agree, I haven't commented on that - I avoided the "how to [not] spend", and focused solely on how debt sustainability shows increased spending is possible (without getting into what people think the best way to configure that spending is).

Government borrowing doesn't work on the basis of profits, because government finances don't work like business finances - with governments, a better measure of the success of spending is GDP growth.

If government spends money gained from low-interest debt efficiently - say, on a high benefit infrastructural project - the increase in GDP will improve overall debt sustainability and will increase tax intake for paying down debts.

However (and this is very important): Even if government spends that money in a completely inefficient way - e.g. something silly like paying people to dig holes in the ground and fill them up again - that is still flooding money into the private economy, which itself will still increase GDP and tax intake, which can still provide a net-gain in debt sustainability (albeit far less of a gain than the previous scenario).

Obviously, the money should be spent in as efficient a way as possible - but if you see my point there, no matter how it is spent, it is still our ticket to a speedy economic recovery.

The point you're missing is that the gains from investment have to be greater than the cost of the loan. In the former scenario this is true, in the second scenario this is unlikely.

Borrowing on the long term bond markets to pay wages is a very inefficient use of money, you have avoided commenting on this but there is not way to separate these issues.

KomradeBishop · 28-04-2015 07:08PM

Iwasfrozen wrote: »

The point you're missing is that the gains from investment have to be greater than the cost of the loan. In the former scenario this is true, in the second scenario this is unlikely.

Borrowing on the long term bond markets to pay wages is a very inefficient use of money, you have avoided commenting on this but there is not way to separate these issues.

No, you are missing the point by treating government finances like business finances. There are no 'investment gains' like in a business - there is GDP growth, which contributes to taxes and debt sustainability.

Completely different dynamics.

Any government spending funded by low interest debt, is going to increase GDP, simply by putting money into the private sector.
I agree that it's better to do this in the most efficient way possible, but even if you do it in the least efficient way possible, it still leads to GDP growth.

jcon1913 · 28-04-2015 07:16PM

KomradeBishop wrote: »

Whether or not you can sustainably borrow more, does not depend upon the overall level of debt, it depends on the interest you pay on that debt - forget the overall debt, and look at the interest payments.

When debt has extremely low interest rates - as it does now (the lowest interest rates for 30+ years, if not way longer) - you can expand debt sustainably.

The real question of how sustainable debts are, is: How much interest are we paying on all of our public debt, as a percentage of GDP?

Say you owe 100 at 01/01/13. You have a shortfall of 10 for the year. At the end of the year 31/12/13 you owe 110. Repayments in 2013 were 10 and interest was 3. In 2014 repayments are 11 and interest is still 3. The 10 extra you borrowed is gone because you import a lot of consumer goods. Taxes went up but spending went up too. And now you owe more than at the start of the year.

It makes no sense. None at all.

Heres a fact for you recently the UK finished oaying the US some loans. For World War 2. So its future generations of Irish people who will eventually pay back lenders children money borrowed to fund shortfalls in taxes as against spending. No sense.

How am I doing?

Public sector pay increase

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