Public sector pay to cost over €1bn

OVER €1bn of the additional €2.5 billion in spending announced by Finance Minister Brian Cowen yesterday will go towards paying public sector wages and pensions.

Due to increases agreed under the national wage agreement, the last benchmarking round and additional numbers in the public service, the cost to the Exchequer of the public sector continues to climb.

Last year, the wage bill for the public service's 280,000 workers came in at €14.1bn but will rise next year to €15.2bn - more than double the €6.7bn cost when the Coalition first came to power in 1997.

In the health sector, half of the €950m in extra resources allocated to Tánaiste Mary Harney will go towards paying the 100,000 people who work in the health services.

And under the Estimates both the Department of Health and the Department of Education will see recruitment increase in their areas by 1,000 each next year.

Although IBEC reacted positively to the Estimates in general, chief executive Turlough O'Sullivan expressed concern about rising public sector wage costs.

"I'm concerned about that because that wouldn't happen if they were exposed to the marketplace. If there is a need for extra staff in a private sector concern, then if there are excess staff in other areas they would be used to make up that shortfall." In its pre-Budget submission, ISME also sought to limit any public sector jobs increases and called for a performance-related pay system to be introduced in the civil and public service.

ISME said that instead of additional workers, there should be 6,000 fewer people working in the public sector.

ICTU general secretary David Begg welcomed increases in spending in welfare, education and health.

However, Mr Begg called on the Government to use Budget Day to raise additional tax revenue by closing many tax incentives which allow the highest earners to pay little or no tax, especially the property-based schemes, by taxing the hundreds of millions in offshore accounts, by taxing sectors like bloodstock, and dealing with the tax exiles.

"A progressive income tax system where all contribute would allow the Government to reduce the high taxes on spending."

Public spend:

The €15.2 billion public sector pay bill is now twice what it was in 1997 when it stood at €15.2bn.

Last year the public sector wage bill cost €14.1bn.

The Departments of Health and Education both plan to hire another 1,000 staff each next year.

The Irish Small & Medium Enterprises Association (ISME) say that 6,000 too many staff are working in the public sector.

Estimates by numbers:

€43.6bn ... to be spent by the Exchequer next year.

6% ... overall increase in spending.

€11bn ... to be spent on health services in 2005 - an increase of 9% on this year.

30,000 ... new medical cards.

200,000 ... new doctor-only cards.

€7.1bn ... to be spent on education - an increase of €530 million.

€2.8bn ... to be spent on disability services.

€11.4bn ... to be given next year to the Department of Family and Social Affairs.

€2.119bn ... to be spent by the Department of Transport.

€15.2bn... on the public service pay bill - €1 billion more than 2004.

€55 ... the cost of attending an A&E if you don't have a letter from a GP.

25% ... hike in cost of private beds in hospitals.

5% ... expected economic growth in 2004.