Croke Park deal - Productivity must be achieved

With the start of the new year the honeymoon period for the Government is clearly over.

In the coming days new taxes will begin to bite, and the excuse that the Government inherited the mess will no longer be as readily accepted.

The base rate of VAT has been increased by 2%, which will have enormous knock-on affects. An annual household charge of €100 has been introduced, public transport charges have been risen from 3% to 15%, and third-level registration fees have been increased by €250.

The opposition will try to blame the Government for everything that goes wrong — that’s politics. Only time will tell whether the new measures are effective. It is in all of our interest that they should be successful, so it is necessary to keep a close eye on developments.

Extra costs are being imposed on everyone, but some people will be receiving extra payments, such as civil service increments. These will cost the exchequer an extra €250 million this year, which could be a contentious issue for the Government.

Pay increments for 30,000 teachers will cost €22m. Teachers will receive extra pay this year ranging from €1,000 to €3,615. These increases were agreed between the unions and the previous government in return for productivity measures in line with the Croke Park agreement. If the promised productivity is achieved, it will be money well spent.

We need a proper functioning public service. Depending on how things go, Energy Minister Pat Rabbitte warned that it may be necessary to sit down with the unions to re-negotiate the Croke Park deal, which prevents cuts to public sector salaries and extra payments, such as increments, prior to 2014.

The public service has been downsized by over 20,000 already since 2008. The extent of those savings may, of course, be questioned, depending on the number of those that were encouraged to retire with golden handshakes and handsome pensions.

If the agreed savings and efficiencies are not achieved, there should be more than just questions about whether the Croke Park agreement should be revisited. Unless the efficiencies are achieved, the deal will not have been an incentive, but another reward for failure.

It should therefore be made clear now that the increments would not only be negated but would actually be clawed back, if the promised productivity is not achieved. That is only fair to the rest of us who would be paying for this failure.