Public sector pay deal queried

The Institute of Certified Public Accountants in Ireland (CPA) has questioned the wisdom of paying the Benchmarking Awards to public sector workers.

In a pre-Budget survey, CPA members condemned the process as a “rampant wastage of funds”.

Nearly half of those surveyed (45%) called for a review of the payments while a further 20% said a cut in public spending was required in 2004 to keep borrowing under control.

They said the cost to the exchequer of benchmarking will be in excess of €700 million in 2004. To pursue such a course would result in an extraordinary burden on the State and must deliver real reforms within the public sector, said CPA president Alan Farrelly.

“Any payments must be linked to the achievement of verifiable and transparent targets. The taxpayers, many of whom are public servants themselves, deserve to know clearly where improvements in public services will emerge before, not after, payment is made.

“If an objective of benchmarking was to compare public sector benefits with those in the private sector then the same standards of comparison should apply in the case of delivery of reforms,” he said.

Other measures which respondents felt should be considered by Minister McCreevy in the Budget to balance the books were to increase borrowing (14%), raise direct taxes (12%), raise indirect taxes (7%) and introduce new taxes (2%). Over 70% said companies would not be ready to make these payments from next January.

It was another example of legislation prior to consultation and education while moving the BIK tax collection obligation to the employer could be intolerable for some businesses, he said. Companies dependent on delivering product or services with company vans will be hit hard, said the survey.

“If company drivers cannot start their work from home without a taxation penalty then we are guaranteeing loss of productivity, additional costs and further gridlock with unnecessary journeys to central company parking lots,” said Mr. Farrelly.

“The delay in the publication of Revenue’s guidance on this subject has left many businesses unprepared for the introduction of PAYE/PRSI on BIK.