Time to put benchmarking back on bench

PERSPECTIVE, the well known boss of a dairy group recently remarked, depends on the spot you happen to be standing on at a particular time.

Presumably he meant that points of view differ and indeed are influenced by the particular angle an individual or organisation happens to be coming from.

Given the mood on the economy at the moment, the perspective generally is pretty glum, with many more jobs due for the chop over the next 18 months.

The latest news is that a job is lost every 15 minutes presumably a crisis from Pat Rabbitte's perspective.

If it was one every 20 minutes, would it be okay? Or one every half-hour?

So much for the leader of the Labour Party, who accuses this government of being nothing more than spin and sound bites.

The basic message is however that after terrific years of job creation we are now feeling the heat.

And how significantly the perspective has changed. IBEC, the employers' body, which signed up to the Sustaining Progress deal, now wants the public service benchmarking agreement with the trade unions put on hold until the economy returns to serious growth.

Finance Minister Charlie McCreevy has in the past few days tried to bell that particular cat, but he is insisting that further stipends under the deal must follow productivity gains.

Perhaps IBEC is right to insist benchmarking be put on hold, given the stage of the economic cycle.

With health and social services in crisis, it is difficult to imagine the less fortunate seeing it in the same light or the parents of Róisín Ruddle, who died for lack of €1,000, having the same perspective.

When income tax and excise revenues are not delivering, then it is time to call a halt on gratuitous payments to the public sector.

Former Davy Stockbrokers economist Jim O'Leary resigned from the review body on benchmarking because he could not stand over something which he believed to be unjustified.

The benchmarking process was nothing other than a back-door means of paying those in secure public sector jobs significantly more than those in the private sector were going to get in the years ahead in terms of wage increases.

But IBEC did sign up to the deal, even if the terms were between the State and the public sector unions.

IBEC wanted a moderate wage deal in the private sector and indeed had no difficulty in saying "Yes, yes, yes" when the benchmarking process was critical to delivering modest pay deals to industry. Again it is a question of perspective, which is often just another term for self-interest.

In its economic review for the last quarter, IBEC made the point that the private sector had no option but to cut bonuses, trim pay over time and insist on best practices to keep costs down in an increasingly competitive environment.

But the biggest employers' body in the country insisted too that 10,000 jobs should go as part of the war on costs.

It has been argued that the public sector has a security which the rest of us do not enjoy, and indeed the benchmarking deal was thought by many to be nothing other than naked greed on the part of workers who enjoy security of tenure unknown to the rest of the workforce.

The unions argue of course that it was a means of putting a market value on their jobs. If they want that however, then it is reasonable to argue that in difficult times they should have to take the heat like those in the private sector, and live with cutbacks and demands for greater productivity.

Public sector pay and pensions account for nearly 50% of the actual cost of running the country in other words, 50% of the annual current budget.

In reality, 50% of every extra euro allocated goes to paying wages, salaries and pensions.

Things will get worse before they get better. But they will get better.

The basic message is that the economy is strong for those lucky enough to be participating in it.

But it will only remain so if all of us act responsibly.

And that means postponing benchmarking this year, as IBEC demands.