Public sector incomes ‘should be based on average EU equivalent rate’

PUBLIC sector pay should never again be set by a review body, but should instead be based on an average EU equivalent rate, according to Glen Dimplex managing director Sean O’Driscoll.

Speaking at yesterday’s Cork Chamber Annual Conference in Rochestown Park Hotel, Cork, Mr O’Driscoll outlined the series of business innovation and cost-saving measures which he believes are necessary to make Ireland fit to compete with world markets. He titled his five-year plan ‘Agenda 2016’, stating that it is possible for Ireland to become Europe’s leading trading nation in time to celebrate the 100th anniversary of the Easter Rising of 1916.

Mr O’Driscoll said: “We should never again have a review body to recommend on public sector pay levels – let’s keep it very simple and transparent – set the pay level for every public sector job at the average of the EU rate for the relevant position. Our public sector doesn’t need to be reformed, it needs to be fixed.

“On All-Ireland final day in Croke Park, I think of pride, passion, vision, talent, urgency, honesty and hard work. We need a new Croke Park agreement, which has that ethos at its core. Taxpayers’ money should be invested wisely, never wasted. We should always ask ourselves, if it was our own money, would we spend it.”

Mr O’Driscoll said he arrived home after two weeks representing Glen Dimplex in India recently to find six letters from the Companies Registration Office. He acts as a director on six companies. Initially, he presumed that there was a compliance issue. In fact, the letters were simple reminders of the date for filing company returns.

“The letter stated that ‘to improve efficiency’ we were being reminded to file our returns on time. I was so annoyed that I did some research. If each registered company had even four directors on average, that would mean 800,000 letters going out just to remind us to be efficient, all of those letters paid for with taxpayers’ money.”

By contrast, some years ago Glen Dimplex built an office for the 14 Dublin-based staff who control its global operations. It built the office in a warehouse it already owned. The carbon footprint was minimal. The company paid €104,000 in planning fees.

“Some €49,000 of that money went towards the cost of developing Metro North,” noted Sean O’Driscoll. “I will be watching the Government’s forthcoming budget very closely to see if that plan for that Metro is canned. If it is, we’ll be looking for our money back.”

Mr O’Driscoll praised some moves towards being more competitive since 2009. In 2008, Irish electricity prices were 38% higher that the EU average, today this has narrowed to 6%. Buildings costs have declined by 30%, and the cost of hiring for similar positions has declined by 25%.

Since 2009, our own labour competitiveness has improved by 7% relative to the rest of the eurozone.

He suggested Ireland has a lot to learn from Germany’s revival. “Germany has shown us that it can be done through tough structural reforms in the early part of this decade. Germans worked hard to regain their competitiveness in world markets, reducing their relative unit labour cost by 20% over the last decade.”