Back at the start of its reign, this Government — under Finance Minister Noonan —decided that to try to get ends to move closer together it would dip into private sector pensions by imposing a levy on the capital sums that had accrued.
That levy was closer to larceny on a grand scale, as for years Government encouraged us to provide for our old age.
When that levy was imposed, hundreds of thousands of the same private sector were being laid off or put on zero-hours contracts. Tens of thousands of others were emigrating to find jobs in far flung regions of the world. They have not and cannot return, and many may never be able to.
That levy, invidious as it was, was supposed to last a few short years and then it would be gone. However, he then decided to extend it beyond the original date for its termination, on the basis that the State’s coffers needed the easy money it delivered. Folk were annoyed, even angry, but times were bad, and anyway, what could they do?
Government at the same time imposed cuts on public sector workers and a pension levy that went up to 7% based on salary level. Bear in mind, that the highly attractive public sector pension is not accrued but comes from the current account. Bear in mind, that the amounts necessary to fund the defined benefit public sector pension is nowhere near covered by any contribution that the public sector employee makes. However, no public sector person lost his or her job, none went on short time and most only suffered minor changes to their terms and conditions. Indeed, even some at the highest levels did not suffer at all.
Time has moved on. The private sector pension levy will have garnered in excess of €3 billion by the time it ends this year — that is if Mr Noonan doesn’t do another about face. But now that there is some light at the end of the proverbial economic tunnel, he and his fellow candidates for re-election next year have decided that it’s time to cozy up to the public sector unions and particularly that large block of votes, predominately in the Dublin area, to try to ensure their own, their respective party’s and their government’s future.
Noonan’s sidekick and Public Expenditure Minister, Brendan Howlin, has been left off the reins and negotiations have commenced to row back on the cuts to public sector pay and to remove or reduce the levy imposed on public sector employees. This is despite the fact that we are continuing to borrow almost €5bn per annum and despite the fact that Europe has warned us to beware of increasing our debt.
Indeed, restoring public sector pay levels to anywhere near the level they were five and six years ago is a glaring red rag to the private sector, given these pay levels which were considerably greater than comparable pay in the private sector, were determined, even imposed, on a series of seriously flawed benchmarking exercises.
To even dream of restoring these salary levels is madness of the highest order, particularly in the absence of any real and meaningful reform as has been demanded by Europe, the IMF, Tom Cobley and all. There are far better ways that this money could be spent in the real national interest, that is, in all of our interest.
Now, to add serious insult to an already grievous injury, Mr Noonan is trying to tell us that by reducing the public sector pension levy all he is doing is leveling things up as he has already said he is also eliminating the private sector levy. He is comparing peaches and kumquats.
Mr Noonan has been touted as a safe pair of hands. The facts tell a whole different story. Indeed, they point to a government that is so out of touch that it should be put out to grass. Yesterday’s news revealed that the folk who ran the country during the boom that caused the bust continued to receive their gold plate pension. Now that’s a thing the next government might deal with. I’m not holding my breath though.
© Irish Examiner Ltd. All rights reserved