If you are over 50, on a pre-1996 pension, a lower rate of PRSI, a full pension entitlement at 60, and sitting pretty on your increments, then the shafting of new entrants was done for you, by you and you know it, writes Gerard Howlin
SHORTLY after 8pm last Thursday, the leaders of public service unions who signed up to the Lansdowne Road Agreement were shafted. The pay deal, worth €40m to gardaí, was overreached by the Labour Court, concerned to issue a recommendation that would be accepted, and thus reinforce its jurisdiction.
Effectively this means acceptance by the divided Garda Representative Association (GRA). It is a given that the Government doesn’t reject its recommendations, but unions may. As the Luas and Dublin Bus disputes demonstrated, the industrial relations machinery of the State provide a floor, not a ceiling, for what can be had. It’s a slot machine for vested interest. Where the public interest lies is unknown.
Everything is a matter of perspective. From the viewpoint of most trade union leaders, who represent mostly public service workers, they played an essential role in ensuring that Lansdowne Road stuck. They did this at considerable cost, within their unions, where the going has gotten increasingly rough. Ironically they seldom got the appreciation they deserved from members when pay rose exorbitantly. But they got the grief on the way back down. Croke Park, Haddington Road, and Lansdowne Road form a serried political construct where what was done served two essential requirements. The first was to preserve the State, on which ultimately public service workers absolutely depend. Second was the requirement to distribute what was available to current voting members of trade unions. Thence the abandonment of new entrants not only on equal pay, but on pension too. It was a Faustian pact. And understand this, Lansdowne Road may be shot, but the underlying inequalities have been put beyond reach.
Bellyaching now about poorly-off new entrants doesn’t bear scrutiny. Public servants understandably have no interest in equal pay for equal work. Any application of the principle would collapse the entire system immediately. For example, there is no suggestion that increments, virtually unknown in other employments, be abandoned. There is nobody proposing that vastly different entitlements to public service pensions, varying from gold-plated prior to 1996 to little more than base metal today, be reversed, to become equal pension for equal service. If you are over 50, on a pre-1996 pension, a lower rate of PRSI, a full pension entitlement at 60, and sitting pretty on your increments, then the shafting of new entrants was done for you, by you and you know it. If you had any decency you would be kissing the hand of your trade union leader. And the base metal pensions for new public service entrants come at a hefty discount, compared to what could be similarly afforded in the private sector. It’s all a matter of perspective, you see.
New entrants to the public service have a grievance, and so-called pay restoration can only partly solve it — and only then at a cost to public services and the public interest. To put it into perspective, an average garda enters the ranks in their early 20s, retires on full pension 30 years later in their early 50s, and then lives for another 30 years. For every year of service there is an approximate year on pension. This 1:1 ratio is utterly unsustainable. It has nearly doubled in a lifetime. But with increasing life expectancy, it is set to further increase. The addition of the six months spent in Templemore into the calculation for pension entitlement possibly tips the system into the bizarre realm, where gardaí are almost uniformly longer on pension than working. In any event, increased life expectancy will achieve that soon.
What neither the €40m found for gardaí now, or putative eventual pay restoration under Lansdowne Road will do is reverse the changes made in 1996, which made new public servants pay more and wait longer for the same entitlement, or more much drastic changes in 2013, when pensions based on career average, not final salary, was introduced. Brendan Howlin’s innovation on the centenary of the Lockout was the ultimate de-equalisation within the public service. It recognised the financial reality facing a State in crisis then, and demographically over the long term. Over a lifetime, its puts disparity on pay, into perspective. Please note, you haven’t heard as much as a whimper about it. The vested interests who benefit disproportionately, are too strong to allow any reconsideration of pension entitlements be put into play.
The Government met yesterday and accepted the reality of having to pay an extra €40m to gardaí, if they accept it. The extent of the breach of Lansdowne Road, depends on how elastic you like your argument to be. But the greater cost to Government is not the €40m, or even the several hundred million it would cost to extrapolate a deal for 14,000 gardaí across 300,000 public servants; it is credibility. What the Government lost last Thursday night was its authority with a key group of trade union leaders, inside Lansdowne Road, who learnt not to be caught carrying the can again.
Fine Gael, now has an identity crisis. Its ultimate dilemma was to be faced with a choice between An Garda Síochána and the State — the twin pillars of its own self-identity. It did so in circumstances when as a party in Government, it faced responsibility for the first time without Labour. It was Rúairí Quinn in 1996 and Brendan Howlin in 2013 who effectively curbed the greatest excesses of the public service. The irony is not lost now.
Fine Gael identity is based on the higher professions, the self-employed and farmers. There is no urban working class Fine Gael to speak of. They have neither the personal connections nor the political inclination to parley with trade unions. As we now know, they talk tough but surrender quickly. Lansdowne Road is collateral damage. Budgetary policy is now between the crosshairs.
The chances of the €40m pay award being found within the Justice vote is nil. Led by Leo Varadkar, ministers are rushing to offload responsibility. His talking tough after the pass was sold only draws attention to incapacity to take responsibility effectively.
Varadkar was central to an impetus for additional Government spending that spirited an additional €300m into the fiscal space in the run-up to the budget. And one thing does lead to another. The truth is that neither €40m nor even €300m are game changers in themselves. It’s the cumulative change that matters and the greater part of change which counts is cultural change. The cumulative effect of the last two budgets, plus the Garda pay award is just that. Soon we will be talking about real money. Those in trade unions and inside the tent are now under huge pressure. It can only be assuaged with public money at a cost to public services.
In any event, Fianna Fáil has made clear it wants an accelerated Public Sector Pay Commission. That leaves the public interest, without a public defender in sight.
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