The McCarthy report - Proposals just part of the solution

COLM McCARTHY’S An Bord Snip Nua was given a specific but limited task and yesterday it delivered a range of options that identified savings in public expenditure of over €5 billion, €2bn more than the target figure set by Government.

Some of the recommendations — 17,300 job cuts and a 5% across-the-board reduction in social welfare payments for instance — drew predictable and, in some instances, justified responses.

However, it must be remembered this report is no more than a set of recommendations. An Bord Snip Nua was not allowed consider the pivotal issue in our current crisis. Mr McCarthy was precluded from considering public sector pay levels so this report can only be an element in a far larger process. The report did recommend a reduction in a range of allowances but, as anyone who can use a calculator will quickly understand, much, much more needs to be done. Until such time as public sector pay — where some academics and most hospital consultants are paid twice what their counterparts in Britain are paid — is confronted we are pointlessly moving the deck chairs on a floundering, divided ship. Reassuringly though the group called for a new benchmarking examination and says this should include the possibility of pay cuts and an international comparison of pay rates.

It is unimaginable too that we would countenance cutting the incomes of those dependent on social welfare without first reducing the pay and pensions of all public sector employees or pensioners earning over, say €100,000, a year. Of course welfare reform is needed but if we were to make life even more miserable for the thousands of genuine individuals and families on welfare our cowardice will have evolved into something immoral. This is especially true as so many of those now relying on welfare are unemployed because of Government failures.

That issue, however, is another day’s work and as our Government has yet to show the kind of courage needed to implement even some of McCarthy’s mildest proposals it is unlikely that they, or any other political party for that matter, will quickly find the cojones needed to confront this deeply divisive but unavoidable issue.

On the face of it it might seem that losing 17,300 public sector jobs is revolutionary but that figure is nearly 2,000 fewer that the 19,900 extra people employed in the public sector in the three years to March.

There now needs to be a public debate on the McCarthy proposals, Government simply cannot disappear behind the barricades to slice and dice the suggestions, eventually presenting us with a package of cuts. Earlier this year Taoiseach Brian Cowen defended social partnership by saying that a modern democracy could not be ruled by fiat. He was right and in this instance that principle is even more important.

On first impressions it seems that rural Ireland may be asked to shoulder a considerable burden. Substantial cuts in a struggling farm sector, the closure of smaller schools and half of our garda stations, the end of rural transport schemes as well as the closure of the of the Department of Community, Rural and Gaeltacht Affairs. This seems to strike at the fabric of communities rather than confront excess.

Nevertheless, a set of proposals has been made and now decisions will have to be made. Minister for Finance Brian Lenihan has urged us to read the report “carefully and critically” and to avoid “knee-jerk and defensive reactions to each and every suggestion” raised. He said “that the old ways of doing things need to be looked at afresh” and said a considered and honest debate was needed. He is right. Turning McCarthy’s proposals, and so many other vital measures, into a recovery plan will require courage and the strength to confront powerful interests.

We can only hope that Mr Cowen and his colleagues have the stomach for the battle, for that is what it is.