GERARD HOWLIN: Yesterday didn’t ‘budget’ for the looming public-sector pay talks

THE big hoopla wasn’t the Budget yesterday, it will be the public-sector pay talks next year. Politically and fiscally, that is where the real action is.

Add a big plus to yesterday’s numbers and you get the total figure for public spending, and the borrowing required to service it. Of course, we don’t know what the big plus is, but it is the elephant in the room.

Think of those extra teachers and guards — surely welcome — and you have a sense of the upward pressure on public spending. For the first time in many years, there is a planned expansion in public service numbers. More important than modest increases in personnel are the pay increases that will be applied across the board. Another thing we don’t know, for now, besides the extent of any public sector pay increase, is the time line over which it will be applied.

Will a new pay agreement next year result in a pay increase in 2015?

If it does, much of the additional spending announced yesterday will be eaten up by a larger pay-and-pension bill. If not, don’t worry, it will hit the year after, and the year after that again. It’s more borrowing, to sustain more public spending. Before you know it, it will feel like social partnership never went away.

An exaggeration?


But whatever about the extent of what is coming down the tracks, the cultural change is seismic. The national knicker-elastic has snapped. It was stupidly called austerity, when momentarily pulled viciously tight. Of course, when you have been wearing nothing at all then anything pulled-up feels tight. It was us beginning to live within our means; the first stages of sobriety, so necessarily unpleasant.


But that’s all over now. The relief, the sheer relief that it’s over. Modestly at first, one little innocent step at a time, we are inching back onto the dance floor. It starts off with your bum wiggling in its seat to the rhythm of the music. It ends up high-kicking and hollering across the dance-floor; before ending up in economic A&E. You will know you are in an economic A&E when you see early signs of lost competitiveness. Lost competitiveness means it being more expensive to deliver goods and services here than our competitors can abroad. A nascent sign are the jobs that should have been created, but were not. It’s always hard to diagnose that at first, because in a recovering economy it’s dismissed as simply the cost of doing business.

If you have any difficulty understanding that blather, Google “noughties economic nonsense” and a rush of codswallop will explode on screen. There were volumes, written by experts, entitled ‘Sure Don’t Worry; It Will be Alright on the Night’ and other such learned titles. It certainly was all right on the night. In fact, it was fabulous. All that jiving, and we all looked fabulous, in a gamey way, to each other under the glitter ball. But, wow, the next morning. The horror, the shock, the awfulness. We just didn’t look that good at all, did we?

We are nothing if not resilient. It’s not the speed with which we got over it — well, nearly over it (there is still a fair amount of economic debris strewn around the country). It’s the speed with which we forgot, that is the overwhelming national achievement.

The national amnesia, if only it could be bottled and exported, would make for a better, happier world. I can just see it now. Bottles of Irish National Amnesia, sold globally to the soundtrack of ‘When Irish Eyes are Smiling’. Sure, ’tis like the morn in spring. Lovely, lovely altogether.

When the votes were being counted in Roscommon South-Leitrim and Dublin South West, and more than 50,000 people were marching on the streets of Dublin last Saturday, I was in Cavan. It’s a county I hardly know.

Befitting the end of austerity, I got the bus up, through Virgina, Cavan town and on to Belturbet. You can see a lot while sitting high up in a big bus. There had clearly been happy times — for some, at least.

Big houses aplenty, and well-kept towns, in beautiful countryside. Belturbet is just inside the border and the road across had been closed for decades. According to the taxi driver, it involved a detour that took forever to get up to Enniskillen. But the road was opened and a peace dividend rolled in.

And it’s Quinn country. There isn’t a bad word to be said about that man up there. We slowed down, passing his famous house, and I had a good gawp, but not so crude as to actually stop and take a selfie, you understand, like one of these new-fangled novenas. No, just a slow, stately drive-past and a good gawp. Take it all in, and drive on. ‘A shame to see what happened’ was the consensus locally. I could understand. The local perspective is certainly different than what you see when you are looking through the prism of the national media.

There were jobs in Cavan, tidy towns, and a sense of pride in one of their own. ‘The family never lost the run of themselves, either’. I think that translates as ‘they have lovely manners’. I am sure they have.

It was eerie, doing a drive-by past Seán Quinn’s magnificent house, listening to the hullaballoo on the radio from the march in Dublin. Water is apparently a human right. I never knew that. We shouldn’t be charged for it; but I thought we were paying for it all along anyway. The point of the user charge is two-fold. Like the local property charge, it widens the tax base. Both those changes create revenue for local authorities and for desperately-needed investment in dilapidated water services. And, of course, equality. Most people in places like Cavan always paid for their water, one way or another. So there.

Yesterday’s Budget isn’t a big deal for the national finances. But it is a huge change in attitude. Figure this. Next year, if all goes well and the world doesn’t go belly-up, we will have to borrow about 2.7% of what we spend to run the country.

Last year, we topped up our debt by €8bn. Now, we plan to spend several additional hundreds of millions, before we even get to a new public-service pay deal. If you go up to Cavan, take a seflie of yourself outside Seán Quinn’s lovely house, print it out, put it on the wall, and, before it’s discoloured, you will be back to the future.


Much of the additional spending will be eaten up by a larger pay-and-pension bill



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