Demands on public purse limit options

A GOVERNMENT is usually formed before we are told the State’s coffers are bare and that election promises honourably made cannot, unfortunately, be delivered. 

However, it is becoming clear that the “fiscal space” that was to solve many of our problems is more like a small, boggy corner in a windy field rather than a Canadian wheat prairie stretching to the horizon. Expectations may have to be modified. Again.

Suggestions that extra costs in health, education and justice will push election promises off the can-deliver list paint a very different picture to the one that framed the election campaign. It is too early, and maybe too cynical, to say “caught again sucker” but considerable scepticism is justified. If there is a second election this year very different proposals will be necessary — and the figures supporting those arguments will need official verification.

The pressures on the public purse are predictable. In the short term the Health Service Executive faces a bill of up to €300m on foot of an action taken by consultants over salary increases, due since 2009. Budget overruns will, however, dwarf the consultants’ bill. The Department of Health got an extra €600m last year to cover overspending. That figure was included in this year’s budget but it is anticipated the HSE will need another rescue package this year. European budget rules preclude this so negotiations will be necessary. Figures published by The Irish Times yesterday show a Department of Health briefing note records that the HSE overspent by €32m in January, 3% of its budget and over €1m a day.

This week’s teacher conferences left no doubt that teachers expect significant pay rises, rises far beyond the 0.20% rate of inflation. These demands would be palatable if they were focused exclusively on improving the pay of teachers — and other public employees — recruited on lower pay scales. An across-the-board expectation seems beyond the capacity of current Government resources.

Younger employees were the biggest losers during the crisis, significant numbers are on short-term contracts making life-planning more difficult that it might be. This cohort must also deal with one of the consequences of our housing crisis — rampant rent inflation. The crisis in third-level funding adds to the need for extra resources in education.

The demand for extra gardaí, especially in rural areas, will put further pressure on a Department of Justice already struggling to meet modern policing needs, a situation highlighted in the recent and uncompromising Garda Inspectorate report. In these circumstances it should be possible to put the army on security duties at airports rather than divert scarce garda resources was was suggested after the recent atrocities in Brussels.

The increasingly nasty Luas dispute hangs over all of this. The rejection of an offer of 18% over three years — remember, inflation is less than 0.5% — is very hard to understand. If the Luas demands are to be the norm acrosss semi-state and state sectors then we have learnt absolutely nothing from our past and almost deserve to suffer the impact those figures would have on our capacity to provide and improve public services.