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Dublin: 10 °C Wednesday 19 June, 2013

Budget leaks: Dublin and Brussels in €300m dispute over public pay bill

The government says cutting public jobs will save €2.5bn by 2015 – but the European Commission’s draft report is far less optimistic.

Plans announced by Brendan Howlin on Thursday include saving €2.5bn by shedding public jobs - but the European Commission is less optimistic.
Plans announced by Brendan Howlin on Thursday include saving €2.5bn by shedding public jobs - but the European Commission is less optimistic.
Image: Eamonn Farrell/Photocall Ireland

THE EUROPEAN COMMISSION has poured cold water on the Irish government’s hopes of saving billions of euro by cutting tens of thousands of public jobs – estimating that the cuts will save €300 million less than the government believes.

The Commission’s confidential draft report on its visit to Ireland in October – the fourth quarterly review of Ireland’s progress under the EU-IMF deal – disputes the government’s assertion that it can reduce its annual pay bill by some €2.5bn between 2008 and 2015.

TheJournal.ie has obtained a copy of the draft report, which was circulated to members of Germany’s budget committee earlier this week – ahead of a vote on whether to approve Ireland’s next round of bailout loans.

Earlier this week, public expenditure minister Brendan Howlin outlined plans to cut 23,500 staff from the public payroll between the end of 2010 and the end of 2015 – aiming to bring the government’s annual pay bill to €16.8 billion in 2015, down from €19.3 billion in 2008.

But while the Commission’s report expects a similar volume of jobs to be cut, it says the government will only get its pay bill cut to €17.1 billion – some €300m more than the government’s expectations.

Budget plans

While the government also expects to make major savings by overhauling the generous pension allowances of the top public earners, the reduction in its pay bill is particularly important – as it forms a major part of the planned spending cuts in the 2012 and 2013 Budgets.

Next month’s Budget for 2012 will cut current spending by €1.45 billion – with February’s mass retirement of public servants expected to help the government make up a large portion of this target.

The draft proposals for 2013 contain similar plans to cut spending by downsizing the public workforce, whose wages will be expected to make a major contribution to the €2.25 billion target of spending cuts in that year.

The government says it is confident of achieving its target of 23,500 job cuts without having to enforce compulsory redundancies – which are outlawed by the Croke Park Deal.

That deal is due to expire in 2014, however – raising the possibility of mandatory public layoffs in 2015 and beyond.

In full: TheJournal.ie‘s coverage of the Budget Leaks >

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    Comments (64 Comments)

    • Some decent reporting this last couple of days. Wouldn’t have usually come to the Journal for such exclusives. Keep up the good work.

      Reply
      • No mention yet of the €10 latest cut to child benefit but I’m sure the Journal will get there.

        “U-turn Enda” made a ultimate promise to Eamon Gilmore NOT to further cut child benefit if Eamon supported Enda into power.
        Now that latest promise (one amid many) is to be broken again!
        Will Gilmore eventually accept it like the good little lapdog Kenny and Fine Gael have turned him and his party into?

        Is Labour becoming Fine Gael’s version of the Green party? Used, abused, commanded and spat out?

        Reply
    • The whole initiative is a con. For a start there is no targeting of redundancies of particular sections of the public service. I get the sense of a free for all. Surely there is enough insider knowledge in the public service to identify which departments have people sitting on their hands. The sensible approach is to direct redundancies at departments that are overstaffed, inefficient, etc. Without some level of involuntary redundancies, this staff reduction scheme will not deliver reforms.

      Reply
    • It must really amuse the people who put us in this mess to see one half of the 99% tearing at the other half of the 99%. The public sector worker who can no longer make ends meet and the private sector worker who can no longer make ends meet have the same problem with the same solutions. So Cop on guys.

      Reply
    • Time for a bit of courage and common sense. Tear up Croke Park, the ridiculous idea of selling state assets, stand up to the unions, don’t increase vat and introduce a new tax band and rate for the higher paid. Simple. Sorted. Great.

      Reply
      • “introduce a new tax band and rate for the higher paid”
        How much will that bring in?

        Reply
      • Mort (cos you’re not my uncle), if you think the higher paid are paying their fair share if tax in Ireland – think again.

        I remember when my parents paid nearly 58% tax and they were frontline staff. I’m not talking about going back to those rates but I don’t think it’s fair to make cuts across the board.

        Reply
      • Réada,I remember paying 65% income tax plus PRSI but thats beside the point,how much would this tax that you are proposing bring in? How would this give an incentive to anyone to work harder? Would it be worth taking a promotion in order to have the pleasure of paying this extra tax?

        Reply
      • Mort. For me it would. But I think I’m a bit unique that way. My husband thinks I’m a pain too when he’s giving out doing his tax returns and I remind of our teachers, gardaí, nurses, etc. Shoot me! Time for fair play I think. That’s all!

        Reply
      • Worth remembering that the country only started to do well when it cut taxes from 65%. If we want people to get of their arses and create jobs for themselves and for others, the taxman shouldn’t discourage them. The top rate of tax is already 52% and when people have to give more than half their earnings to the government we’ve already gone to far. You can’t tax your way out of a recession and you can’t spend your way out of a debt crisis. This leaves one choice, cut spending…. then cut some more.

        Reply
    • jrbmc 20/11/11 #

      Cuts cuts cuts that’s all you hear! I wish Government/ TD’s would grow some bollix , look at themselves and make an example for all to follow.

      Reply
    • http://www.bbc.co.uk/news/business-15748696

      The above is a link showing the debt of countries in Euro crisis. Ireland has the highest per capita level of debt by factor of 10 when compared to other countries ,even Greece. Expect tax increases for a long time, you each have been given a tax bill for almost € 400,000 each, most people have mortgages they can’t pay already! Amazing, Greece were the ones who got the debt write off ?Just shows how inept this “government” really are!

      Reply
      • @Paul, I think these figures are a little deceiving. I seen these on CNBC a few months back and it states that this includes corporate debt also. Which is high in Ireland due to the large amount of internation companies we have based in Ireland. I could be wrong on this and maybe someone could clarify further. I imagine if this was the true debt of our nation then we’d be buried by the markets long ago.

        Reply
      • Government debt is set to peak somewhere below €150bn as far as I know, so Derek is correct. In the notes it also states the data “shows what banks in one country are owed by debtors – both government and private – in another country.”

        Reply
      • So if these figures are skewed upwards by corporate debt, what level of debt per capita does Ireland have in comparison to the others like Greece? Surely it can’t be skewed by a factor of 10! Derek or Ryan do you know?

        Reply
      • As I understand it, it is the corporate debt that sews it that much but when I went looking for stats on sovereign debts only among western nations I failed to find any. If what Ryan says is true the our sovereign, Debt is only around the 150 billion, it would be good to see some direct comparisons though.

        Reply
      • The numbers are inflated by corporate debt, particularly from foreign multinationals that issue bonds out of their Irish subsidiaries to fund the global group. This is not really Irish debt. However, even if you strip this out Ireland’s private debt as a percentage of GDP is the highest in the EU thanks to the housing bubble (sorry, can’t find the reference). The government kept public debt low throughout the boom by forcing borrowers to borrow a little more to pay for stamp tax, VAT and capital gains tax. The public sector has been running on borrowed money since 2003.

        Reply
    • Why are we still lumping in the REAL front line staff such as firemen, nurses, garda

      Reply
    • Divide and Conquer strategy employed by government at beginnings of this mess certainly has worked. Of course they relied on the begrudgery of the Irish to make it work. Sadly they were not disappointed.

      Reply
    • Adhering to the croke park agreement is just infuriating for every private sector employee. We are broke! How in the name of god are civil servants still being protected when we are this far up s##t creek. One reality for unemployed and private sector and one reality / fantasy for civil service. To think that 2000 hr staff are still in the hse at the moment while they cut sna s will give you a great idea of just how wrong and corrupt our system is. Unions and civil service would have you believe they are such patriots complaining about bankers and sympathising with the unemployed. Reality is they d prefer to see front line services suffer, special needs assistants cut , dole cut, anything just don’t mess with their cosy overstaffed, overpaid, underperforming, waste of space cartel. A cartel that can’t be fired for underperformance. A cartel that still get days off for horse races, Christmas shopping, lodging cheques, and festivals. I am so sick of these golden club and their crony protectors, they make me sick! And the usual easy opt out by the bluffer labour members. Everything changes? Everything remains the same!

      Reply
      • Couldn’t tell it better. They lack of some serious looking into and regulation big time.

        Reply
      • Well said Diarmuid. Gas how the thumbs turn on you later down.

        Reply
      • I totally agree. They sound like their looking for praise when they mention no permanent redundancies…..well two things about this.

        1. It will mean that as some very important positions are left by retiring staff, many of these positions won’t be filled or filled by those much less qualified. In some circumstances they may get the right person to move into the position but will this leave another important position not properly staffed?

        2. Why do they think its a good thing that those who underperform in their jobs are protected as well as those who perform very well?

        I too am sick of this bullshit. Sack the wasters and let those in the public and civil service who work hard remain and continue to earn their wage. Many who I would sack are the managers who are refusing to give accurate rating of the employees the manage, because they are too afraid to rate them as underperform!

        Reply
      • Good man Diarmaid. But it’s a pity this waste wasn’t noticed when we had a few quid. Oh wait, it was…… and we came up with the Croker scheme/scam.

        Reply
    • It’s the same old bullshit, the same old strategy. The people will complain and they will get angry but they’ll get over it….soon forgotten! How does the song go: ” Let the bums count their blessings while they count their money”

      Reply
    • The leaking of documents is either an irate public servant or a clever strategy to build us up for the budget. Can’t be an easy decision to make though,who to cut. We wrote a youth activity on the subject. See activity “Taoiseach for a day” http://www.youthdeved.ie/development_education/rich-mans-world

      Reply
    • The big fail of this plan are: how many of laid off staff will find new job and how many will sign for the dole and all other benefits that government will have to pay in the end anyway, second how government is planning to invest saved money? Making savings is one thing, then putting them into profit not another ridiculous loss is another thing…

      Reply
    • Excellent journalism from the Journal these last few days,well done all :-)

      Question. If we were to segregate all our Government employees into just two classes,those working to provide essential services to Ireland and those working to implement the endless list of edicts flowing from the EUSSR,what would the figures look like?

      Reply
    • Consecutive governments now have declared open hostilities on middle Ireland.
      Private sector workers, the self employed and unemployed are to bear the brunt of the crisis, while the banking elite and public sector are to be sheltered.
      The commision are correct about these proposed savings. They are a joke and would never achieve proposed savings.

      Reply
      • The public sector are being sheltered, as you put it, because we have already taken a significant pay cut. My pay has been reduced by 30% since 2008. How much more would you like to take from us? Social welfare hadn’t yet been touched. Why should low earning public sector workers such as myself have to suffer further?

        Reply
      • I don’t even want to justify that with a response. The civil service is overstaffed and you want people earning 186 euro a week to suffer before the civil service numbers even get looked at. And just to correct you if you happen to be lucky enough that the social welfare actually answer your call for help you will be on less than 2 years ago!

        Reply
      • Diarmaid, not much point in saying you won’t justify something with a response if you then go on to respond. Firstly, I am not a civil servant, I am a frontline public sector worker. Big difference. Secondly, if you actually read my post you would know that the point I was making was nothing to do with staff numbers, it was to do with the pay cuts which some people seem to think should be applied to public sector pay.

        Reply
      • Totally agree with you Sarah. The most successful bit of work the government has done in years is to turn the people against each other.

        Reply
      • If you read my post I aim no vitriol at frontline staff, sna s are frontline workers. I said Civil servants, who clog up offices doing nothing while frontlines suffer! 2000 hse staff in hr? What I can’t get my head around is why frontline people like yourself aren’t coming out crying foul about civil servants? Instead you all leave unions protect a pen pusher in the hse just as much as a guard or prison officer or nurse who put their lives in danger every day!

        Reply
      • Bazza 20/11/11 #

        Sarah,

        I’m sorry to hear your pay was cut by 30%, it must be difficult to manage.

        My salary was cut by 100% because I was made redundant earlier this year.

        This is a salary cut you will never experience while you are fully employed in the civil/public service.

        Reply
      • Agree with Diego’s second sentence fully. The government are doing a great job at dividing and conquering.

        Reply
      • Oh and Sarah difference between the words don’t and won’t, I’m sure there is irony in there somewhere!

        Reply
      • The ones who should be divided and conquered are the wasters v’s those who earn their wage in the public and civil service.

        Why anyone who is worth their wage in these services continue to defend them completely is beyond me. Do you not realise Sarah that you have taken a large amount of your cut because the Government have refused to sack those who do nothing and are a waste of space. If you consider yourself worth your wage then you should fight for it but not in a union that protects you and wasters equally.

        By the way Social welfare has been reduced by 10%. in last few years. I’m not sure either if the word earning is appropriate in respect of social welfare! Diarmaid.

        Reply
      • Bazza, I am sorry to gear that you were made redundant. I’m sure it’s a nightmare. That does not make it acceptable, however, that I should be expected to continue to do a job which can be dangerous at times (A+E nurse) for very little pay. Diarmaid, I’m sorry but I don’t know what you mean by the don’t/won’t thing?

        Reply
      • Bazza 20/11/11 #

        Sarah,

        You have chosen where to work, if you aren’t happy there, then leave and go somewhere else.

        PUBLIC SECTOR;
        -Low pay
        -Dangerous at times
        -Employment is not performance related

        PRIVATE SECTOR;
        -Higher pay
        -Less dangerous
        -Perform or be fired

        You decide …..

        Reply
      • @ Bazza. Just a slight correction.
        Public sector workers are paid on average 44% more than private sector workers.
        http://www.breakingnews.ie/ireland/survey-reveals-pay-gap-between-public-and-private-sector-514877.html

        Reply
      • Sara, just to be clear I fully support staff like you, nursing in a and es with cuts is no joke I’d imagine, but that’s why I am so angry, I believe there should be more nurses, teachers, guards etc and away less civil servants, who let’s be fair, seem to do nothing of any use anyway. While nurses save lives there are 2000 hr staff in the shambles of the hse, why the need for 2000 in hr in one body that can’t lay off staff is mindboggling!

        Reply
      • @ Bazza. In addition, the areas of employment with the highest rates of fatalities and injuries are construction and agriculture where you won’t find any public sector workers.

        Reply
      • I take your point Diarmaid, and agree with you 100%.

        Reply
      • Bazza 20/11/11 #

        Seán,
        thank you.
        You made the point then better than I could.

        Reply
    • I’ve an idea. Let’s cut the pay of rank and file public servants by say 25%. Put another 25,000 of them useless tossers on the dole. It will mean fewer teachers, nurses, firemen, ambulance drivers, Gardai, council staff so you will all wait for ever for essential public services. The public servants lucky enough to keep a low paid job will have no money to spend in their local economy. Everyone is worse off..perfect!! But at least Diarmuid,Fitz an the Sunday Indo journalists won’t feel sick anymore.

      Reply
      • @Silent P. I don’t think anyone is outright calling for these reducions. What the private sector would like to see is

        1. The wasters in all areas of public service sacked
        2. Remaining frontline staff protected as much as possible
        3. Rest of service above average industrial wage take a further cut
        4. The implementation of 40hr week for week day staff where aplicable…(not applicable with teachers)
        5. Removal of excess holidays over and above the statutory in the state
        6. Most other perks – gone! e.g extra hols for certain areas to aid persons into retirement

        There are probably more, but I think if you ask any of those above you mentioned they would be happy to protect the frontline services with the exception of any wasters.

        Reply
      • Silent, well then let’s employ all the live register in public sector jobs that are not there or required. Job sorted. Or perhaps just get rid of the massively overpaid dead wooden dinosaurs that are currently been paid with money we don’t have. I would prefer the wasters getting dole instead of their unmerited salary grades. Money saved can be used for real needs such as nurses, sna’s, firemen etc. it’s not them v us, it’s a healthy economy v waste.

        Reply
      • See it’s this kind of rubbish that does my head in. No one is saying that, but if you think we should all pay higher tax so to keep people in jobs with little or no role you’re delusional. Hell let’s all be public servants, unemployed people, private sector, the lot of us. The money comes from somewhere like, ie. Taxpayer, so when I criticise wasters and useless bodies being paid out of taxes I work hard to pay I’m afraid you’re going to have to suck it up and accept that me, as one of their employers, ain’t happy, so tough on you and them!

        Reply
    • A shambles altogether. Either the government should get on with the cuts or hand over the keys to the IMF/EU, probably a better idea for now to sort out our budget successfully. Oh, and make sure Ruairi Quinn is lynched please Dr. Merkel!

      Reply
      • You might live to regret saying that!

        Reply
      • Personally, I want out of the Eurozone. We joined thinking we’d be sorted for life, and look where it led us! It only enhanced the bubble! Leaving it would do damage but would secure some sovereignty in the long run. But, it is obvious, that our government are a bunch of liars and swindlers and perhaps the IMF would do a better job, not that I want them here!

        Reply
    • Privatise all government departments. Put everything out to tender especially the councils.

      Reply
    • We might then get our Hospitals working again for the real people our children could have their SNA’s too

      Reply
    • I would tend to agree with sarah cahill on nurses. Nurses,teachers and basically everybody who is actually a productive worker in the front line of the public service should be left alone. We need a content workforce in education and healthcare. Not a work force who are anxious and are waiting to be cut or made redundant. However I believe that changes should be made to social welfare but changes that will improve the persons situation such as mandatory retraining,creation of job sharing and oppertunities to return to college. I know these are allready in force but should be enforced realisticly. There was probly always 50000 or so on the dole during good times so the other 400,000 i do believe do not want to be there. I was on it for a year but I am now retraining in healthcare. the government would really want to introduce hundreds of extra education courses linking to colleges and make people get off thee dole. if they refuse they should then be cut. Do away with work placement scheme as it is an accentive for employers to exploit. It has happened allready. Create job sharing or part social welfare payments. Other schemes such as road improvements could be introduced for people on social welfare who refuse oppertunity to re educate

      Reply
    • Addressing a Dáil finance committee some time back David Doyle [The Department of Finance Secretary General] said that we will have received €41bn from the European Union and that this will have been paid back before in 2013 and will will then be a net contributer. The slate is almost clean ,time to bid farewell to the EUSSR. Problem is we just do not know what deals Enda has signed behind our backs.

      Reply
    • If we really want to get this bunch out we had better do it before they are entitled to pensions the Enda and company would not be entitled cos they have not served full term it is less than 2Year service in government that disentitled them for this term pension would that save big money then the new crowd to enter DAIL EIREANN goes in with a salary far less and an expence account that is way below what they have been getting too

      Reply

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