First public sector pay report: Expectations may surpass possibilities

THERE was nothing unexpected in the first report published by the Public Service Pay Commission yesterday. 

However, that does not mean its recommendations will be accepted by the unions or implemented by the Government, especially one that might have to go to the country at any moment.

The fractured nature of the Dáil, the administration’s dependence on support from such a wide range of interests, means it may not have the confidence, or, more importantly, the belief needed to try to resolve these matters in a way that is fair to public workers as well as the rest of society.

Public-sector pay is a balancing act fraught with difficulties that heretofore often ignored the realities of the public purse to buy industrial peace — just like the capitulation to the Garda threat of an illegal strike last year. This surrender did a lot to set the tone for the next round of pay talks, as did the subsequent bus strike.

The issue of public-sector pensions was addressed. They were recognised as the cherry on the cake for those employed by Government. The commission found that public-sector pensions are worth at least 12% and up to 18% more than those enjoyed by public workers’ peers in the private sector. They are, unless the sky falls in, far more secure too. This is an advantage that seems almost priceless to tens of thousands of private-sector workers whose pensions, paid for over decades, disappeared during the financial crisis never to be seen again. There will be no pension restoration for them.

The commission report suggested the pension levy might be made permanent, a possibility already recognised and opposed by some unions. That levy is worth €720m a year to the exchequer but the annual bill for public-sector pensions is over €3bn. This seems unsustainable, especially against the backdrop of changing demographics that will mean a far higher ratio of older people in society. A third of all Government expenditure goes towards either public pay or pensions.

This questioning of current public-sector pensions was also anticipated by Labour leader Brendan Howlin at his party conference when he suggested they were private property and protected by property rights legislation. Mr Howlin might, in one of the many a quieter moments made possible by Labour’s marginalisation, ask himself why he made no such protest when private pensions were evaporating or raided by the Government he served in. The answer might help him understand why his party, and others all across Europe, are now reduced to powerless spectators in so many parliaments where they once had real influence.

There are lessons too for the Association of Higher Civil and Public Servants which last week published a commissioned report arguing that management grades in the civil service are paid up to 60% less than the total paid to their private-sector peers. This seems, at best, implausible.

This report will provoke a new round of sectional-interest sniping but it must not, at a moment when tax returns are falling, lead to unsustainable pay rises or commit resources needed to bolster and improve services. Pay rises must be linked to reform too. A very tall order indeed.