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Dublin: 15 °C Sunday 19 May, 2013

UNITE demands explanation over economic effect of €1bn pay saving

The trade union says it can’t consider cutting members’ pay unless it knows what effect the cuts will have on the economy.

Jimmy Kelly of UNITE wants a breakdown of how cutting public pay by €1 billion will affect the economy.
Jimmy Kelly of UNITE wants a breakdown of how cutting public pay by €1 billion will affect the economy.
Image: Laura Hutton/Photocall Ireland

ONE OF THE MAJOR trade unions taking part in talks on extending the Croke Park public pay deal, in efforts to cut public pay by a further €1 billion, has demanded an analysis of the economic impact the cuts would have.

UNITE says the government has insisted the cuts are necessary to rein in public spending – but that participants in the talks have not yet been told why the cuts are considered so necessary, or what effect they would have on the economy as a whole.

Regional secretary Jimmy Kelly said negotiators had been offered “no indication of the likely effect they will have on jobs and the economic life of ordinary citizens from all walks of life across our communities.”

UNITE says it would not allow employees’ wages to be considered for cuts when the cuts could have a broader economic impact as a result of falling incomes to 290,000 homes.

“No company would be allowed by stakeholders to jeopardise their business by proposing cuts that are not supported by a robust and transparent business case and a forecast of the benefit they might bring in the medium to long term,” Kelly said in a statement.

“Unless we see evidence to the contrary, it is our belief that these cuts are being proposed without due care and attention to the possible thousands of jobs they will cost in the private sector,” he said.

Kelly said UNITE would consider withdrawing from the talks if Public Expenditure minister Brendan Howlin did not provide a breakdown of the proposed macroeconomic effects from cutting pay by €1 billion.

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Comments (30 Comments)

  • What annoys me is the fact that most TD,S are claiming 60 grand per year in Unvouched Tax Free expenses and everyone seems to think its acceptable while the same gombeen men tell us they must slash peoples incomes !!!!!

    Reply
  • I fully accept that I am going to have to take a significant pay cut. However, for every €1,000 I’m cut I will pay €420 less in income tax, about €100 less USC, over €100 less pension contributions to the government – over €600. The €400 less I’ll bring home will reduce discretionary spending – loss of another €80 in VAT. Down to €300 now. If 100 like me are in the same boat then that’s €30,000 less spent in the economy – 1 job gone as a result.
    Savings of €1 billion in the pay bill does not mean €1 billion less in the deficit

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    • Yep, we should obviously just give everybody in the PS a payrise of 1000 euros thus resulting in an increase in the tax take, and solving all our economic problems in one fell swoop.

      Reply
  • Perhaps it is time that JIMMY and the rest cut the cost of membership and there own salaries
    Has he disclosed his salary and the value of his add ons ect what does it come to over the year

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    • Jimmy, you are a bit of an eejit if you don’t know the effects of a pay cut!
      Mind you, most of your members are reasonably well paid in secure pensionable jobs, not like the rest of us.
      The government over employed in the public sector in the boom years to artificially inflate the figures, reality is a hard pill to swallow but a necessary one for the survival and recovery of the country.

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    • 30% of teachers are now part time casual workers on very low money.

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  • JIMMY you should know better than anyone you’re members have nothing left to give simple word every union official used to know but seem to have forgot No

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  • Jimmy give us a break…sure the amount you and your trade union buddies earn nearly comes to the 1 billion mark!!

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  • Reg 15/02/13 #

    It’s not rocket science Jimmy. It means that we shouldn’t have to borrow as much over the next few years. Still need to reduce the budget defecit.

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  • “Participants in the talks have not been told why the cuts are so necessary”

    Where have the unions been for the past 5 years?

    We’re broke!!!

    Reply
  • Very good point from unite. Cuts in some ways are justified but there are many questions.
    How much of the savings of 1 bn are to come from
    People earning less than 50 k pa, 50 to 70 k, 70k to 90k, etc.?
    What prices under the governments control will be reduced or held steady?
    How much will be spent on stimulating growth?
    When will the burden of income tax on the lower paid be reduced to cover the cost of other taxes, such as property, water, waste,
    What is the tax strategy for the next 5 years (e.g. Will vat return to 21% max and when?) also when will corporations start to pay a reasonable share of the taxes?

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    • ‘How much will be spent on growth’…when the government reduce their wage bill, there is no extra money to be spent, just less money to borrow. Try to have some knowledge of the subject before entering into the debate.

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    • It has already been said that any savings will go to pay the illegal gambling debt. Which part of this do people not understand? Jack and Jimmy would do better to get Begg to withdraw his outrageous support for the property tax.

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    • Brian, you should read the comment again and you will see that there is no contradiction in what I say. Furthermore, the government is committed to spending some of the proceeds of the sale of assets on growth stimulation. I am happy I know enough about the situation to enter a debate with anyone open minded on the subject.

      Reply
  • A 10% cut would take a minimum of €50 out of 290,000 workers weekly pay which is subsequently taken out of the economy with less income tax received by the government and less income to be spent on goods and services from Irish companies by the workers and therefore less vat received. Another sensible plan please

    Reply
    • I was simply using this as example Anto, not a plan, but lets here your plan?

      Brian look up stats surrounding wealth per country, disregard those countries who are major oil producers, then u might be surprised, plus ur mixing up wealth extracted by a Govt, not available wealth in a country, these are the details TDs use to confuse you, just look a little deeper!

      Reply
    • censored 15/02/13 #

      Because all the money used to pay those wages just falls out of the sky, doesn’t it. Clueless.

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  • You employee. Us employer. You don’t make demands.

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    • Vincent if u live a democracy (we don’t). It’s your right (privilege is a better word, right aren’t rights if they can take them away from u, are they?)
      Anyways workers have the privilege to contest changes, yes?

      I agree though no union leader/ TD should be on more than 3 times the industrial wage, as they have lost touch with those they are there to represent.
      Jack o Connor recent outburst at those who disagree with him, is an example

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    • Contest changes indeed, but if a company is haemorrhaging money, the company must act. Likewise the state must act in this case. Otherwise long term everyone pays more through increased taxation. Then again, selfless acts aren’t too common in Ireland today.

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    • Brian. Agreed, it’s the method they are using which is unjust
      But if a company is failing due to leadership issues it will make no difference what the workers scarf ice to keep it afloat, as the steering group of the company will repeat errors, or bow to external pressures again & again
      Also to get everybody on board true leadership must be shown for example a 10% cut for staff, should be mirrored with a 20% cut for Mgt, want to drive change u must live that change, only thing FG are driving is this country off a fiscal cliff!

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    • Why do all union chiefs have beards are are from north Dublin?

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    • #Vincent Dolan, just because a person is an employee doesn’t mean they don’t have rights. Look at how Foxconn treat their workers, that’s what all employers want, that’s the way we are going in both private and public sectors. Less of the public/private division and more workers standing together.

      Reply
  • Good old Jimmy. He never changes his tune.

    So Jimmy believes no need to balance the budget.

    We can simply keep borrowing money for ever. We can keep spending more money than we take in as taxes.

    What a great idea, sure our lenders will not be rude enough to ask for repayment.

    Jimmy has not changed much since his days in the Socailist Workers Party.

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    • I would say these questions have been devised by the likes of Michael Taft, the UNITE economist who has articles on this site now and again. He is most certainly not in the SWP.

      Reply

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