Permanent snips needed: McCarthy
Prof Colm McCarthy, UCD economist and chairman of An Bord Snip Nua, said the budget needs to implement permanent pay cuts to impact meaningfully on the structural deficits facing the state, which various economists estimate at between 9%-15% of GNP this year, with a similar deficit likely in 2010.
“News reports suggesting that a portion of the public payroll adjustment is to be achieved through a change involving unpaid leave for public servants, which would achieve a cash saving in 2010,” Prof McCarthy said. “Twenty days out of around 220, if that is the formula, would yield a big cut, perhaps most of the entire €1.3 billion being sought from this expenditure heading. But to qualify as a contribution to eliminating the GNP structural deficit, it would need to be forever. And if it is compulsory, and forever, it is a pay cut. Awkward... to implement and monitor, and entailing a commensurate reduction in employee time input, to which there must be output costs.
