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Hefty pay cuts threatened for semi-state bosses

HIGHLY paid bosses of commercial semi-state companies will face an anxious wait to see if their salary scales will be attacked.

Finance Minister Brian Lenihan has cabinet approval to review the appropriateness of the pay of chief executives of semi-state companies with a view to setting new levels.

He had previously requested the bosses take a voluntary pay cut.

These agencies fell outside the scope of the pension levy, the civil service pay cut or the Croke Park agreement.

The current top-earner in the sector is the chief executive of the ESB, Padraig McManus.

When salary and longevity bonuses are factored in, last year Mr McManus was paid €750,000.

News of the re-evaluation emerged as Fine Gael released new information to further its argument for reforming and streamlining the commercial semi-state infrastructure.

As part of its policy preparation, the opposition party surveyed 15 semi-state companies to examine their business practices and cost structures.

Together they generated a combined profit of €249 million, however, entities like CIE dragged down the revenues of ESB and the Bord Gáis.

Six companies paid a dividend back to the Government on the basis of their incomes. Six did not.

The survey was compiled by the party’s communications and energy spokesman Leo Varadkar.

He pointed to the level of subsidies being paid to the sector from central funds.

The largest subsidy of €321m went to CIE; TG4 was given €36m; and Horse Racing Ireland got €61m.

His document said Fine Gael will oppose the privatisation of any critical semi-state infrastructure.

This supported a call last Friday by the country’s think-tank for enterprise, Forfás, which warned the Government not to simply see the sale of state assets as a chance to raise money.

Mr Varadkar said it would support the off-loading of some of the state’s investment to fund the running of the country but not if it came at the expense of infrastructure.

"We will oppose the privatisation of strategic infrastructure which can only be operated as monopolies.

These include the electricity grid and networks, gas network, Coillte or its successor, which owns 8% of our landmass, and the national broadcaster.

"But to achieve our aims, Fine Gael is willing to privatise some state assets and sell equity stakes in others. The proceeds of privatisation must not be used to pay for day-to-day current account government spending," he said.

According to Mr Varadkar’s survey, most of the semi-states had made efforts to reduce their costs.

The average pay-scale varied dramatically across the sector, Irish Aviation Authority employees got an average of €135,000, while at An Post the figure was €39,783.

However, he said pension deficits were a significant liability.

"Line ministers must ensure that CEOs of semi-states under their remit take all necessary action to ensure that pension funds are solvent and sustainable.

"Line ministers should also put greater pressure on loss-making semi-states to cut their costs and pursue new business," he said.