Impact rules out public sector pay cuts

NewDubliner

irish_bob wrote: »

consultants in germany are paid half of what they recieve here , teachers , guards and nurses earn considerably less aswell despite paying higher taxes

And how much are German public-sector employees paying the private sector by way of mortgage repayments?

murphaph

ardmacha wrote: »

Perhaps we need a German style tax system then.

How would that work? Germany makes sh!t the rest of the world wants. It can afford to tax it's corporations at 40% or whatever it is because they trade off the "made in Germany" brand. In short, Germany does not rely on FDI. Ireland does, so corporation tax has to be kept low to keep Ireland attractive.

murphaph

NewDubliner wrote: »

And how much are German public-sector employees paying the private sector by way of mortgage repayments?

They pay generally higher interest rates on mortgages to their banks here! Trackers and other such products are unheard of or not very common and most germans split their mortgage into sections and fix a certain portion for say 20 years, then some for 10 years and then the rest variable etc. But on the whole their mortgage market is uncompetitive because the property market here is not very significant.

Zambia

This is a very hard one to figure out. Its seems that someone has to get Shot and the only thing up for debate is how big the bullet is going to be and where its going to hit.

The public sector is overladen with staff due to years of lack of accountabilty within various departments the HSE being one. Stories of people being paid that never came in to work abounded.

All during this g Guys watch however he seemed OK for cash

Irish Examiner wrote:

HEALTH Service Executive (HSE) chief executive Professor Brendan Drumm earned more than €500,000 last year at a time when vital frontline services were hit with a series of crippling cutbacks not witnessed in more than two decades.

For years and I mean years the Driving Licence process was a Joke and the reason given for the lack of progress was always the Union.

In my opinion and its only my opinion

I hate to see any public or private worker out of pocket. Principly because you plan your life to suit your pocket and if you reduce the wage of people by 10% of course they could get into real trouble. However in a private company it is the responsiblity of everyone to highlight major wastage of resources. Managers have to find ways to maximise staff who are falling behind. This is so the company stays competitive and does not go under dragging the good staff down with bad.

The public sector lost that view of reality and allowed people to take advantage of the public purse. Unions also did not allow the chaff to fall away.

That said the debt about to befall Ireland due to NAMA and the original banking practices dwarf any spending the public sector could have engaged in.

So in the end we the people both public and private voted in those clowns who allowed us all to build an economy on selling houses to each other. Who looked the other way as they re-zoned for cash and bent over for vested interests whenever our backs where turned.

We were all share holders in Ireland and we all bear the the risks in letting them handle the company.

Now we all take a pay cut wether we want to or not. Maybe next time we ask to examine a few CV's at the polling stations.

NewDubliner

murphaph wrote: »

They pay generally higher interest rates on mortgages to their banks here! .

Nice try, you know that interest repayment is not the issue.

How much capital repayment must they repay to the private sector compared to the amounts still being demanded by the Irish private sector?

jimmmy

NewDubliner wrote: »

Nice try, you know that interest repayment is not the issue.

How much capital repayment must they repay to the private sector compared to the amounts still being demanded by the Irish private sector?

I do not think you understand how markets work.
The financial system everywhere in the world is ( rightly ) that whatever capital someone borrows and agrees to pay back should over the course of the mortgage be paid back. The financial institution has the asset - in this example property - as collateral. If the person defaults on the mortgage the asset is seized and the person loses whatever capital / deposit they have invested. ( in the case of the nama properties, the deposits were an average of 25% of the value of the loan. ) This is now lost to the property developers concerned. Nama is acquiring the properties for considerably less than they were valued at their peak. If the Central Bank, regulator + government done their job properly during the decade then there would not have been a property bubble. The issue facing the country at the moment - which this thread is about - is the billions being borrowed and squandered by the government on itself + its employees. It cannot continue. Why should, for example , our central bank head be the highest paid central banker in the world? And all the way down..

optocynic

NewDubliner wrote: »

And how much are German public-sector employees paying the private sector by way of mortgage repayments?

You just want to be bailed out for buying an over-priced house.
I bought at the peak too... and you know what I say to myself... 'tough'.

Try to be a little bit more objective and rational, rather than a me-feiner!!
We all have to weather the storm.
Public sector pay cuts are required, but not to the level being suggested on this board. The more productive thing to do, is let some of the useless administrative staff go.
Stop all ongoing public sector RFP/I projects. At least until we have the money.
Reduce costs on the administrative running of the PS.

And most importantly... cut the dole!

Nodin

ardmacha wrote: »

Perhaps we need a German style tax system then.

Yes. The European models seem to work, and haven't produced the extreme effects we've seen here, in Britain and in the States. The 'anglo-saxon' way has failed, to paraphrase some french fella.

murphaph

NewDubliner wrote: »

Nice try, you know that interest repayment is not the issue.

How much capital repayment must they repay to the private sector compared to the amounts still being demanded by the Irish private sector?

It wasn't an attempt at slight of hand as you are implying, rather designed to illicit that response from you (which it did) so that I can now state (once again) that most property transactions in Ireland are between private individuals, not between property developers and the public. Who would you ask for your money back if you bought your neighbour's house last year for 500k and it's now worth 250k? Would you really believe your former neighbour should reimburse YOU because YOUR house is now worth a lot less than when YOU bought it (of your own free will)?

The banks have to charge some interest (and in Ireland it is very competitive in this regard) to make any profit. The bank just 'let you off your debt' or they'd all go bankrupt overnight (and why should they anyway-YOU asked THEM for the loan, not the other way around!).

The developers are not "still demanding" anything either-they have been paid for the properties they built at a price that people were obviously willing to pay (I think a lot of stupid people paid way too much and didn't heed or even want to hear the warnings from the likes of Mc Williams). They were paid with borrowed money. The money is still owed-why wouldn't it be owed??? YOU and many others borrowed it of your own free will after all.

I think you need to be able to differentiate between a developer and a bank but you have to also keep remembering that developers had and have no involvement in most property transactions in Ireland. Most properties are bought from their previous occupants, not some faceless developer.

NewDubliner

murphaph wrote: »

The money is still owed-why wouldn't it be owed??? YOU and many others borrowed it of your own free will after all.

The essence of your argument is that you want to selectively unwind agreements that were freely entered into.

Employment contracts for ordinary workers - tear them up. Home mortgages repayable to banks - sacred. Speculative development loans - waive them. Bank losses - tax everyone and give more money to the banks.

Stop NAMA and then let's talk about pay.

murphaph

NewDubliner wrote: »

The essence of your argument is that you want to selectively unwind agreements that were freely entered into.

Almost correct. I make no bones about that but I wouldn't say that the government freely gave unionised PS workers all those pay increases, more that they had to or face strikes led by stroppy unions. Government should have held firm and not given in back then, but it didn't happen and now we have a situation where we have a wage bill we simply can't afford. Of course the government needed to keep the PS happy so it could pay itself a top wage too (linked to a PS worker's wage, surprise surprise).

NewDubliner wrote: »

Employment contracts for ordinary workers - tear them up. Home mortgages repayable to banks - sacred. Speculative development loans - waive them. Bank losses - tax everyone and give more money to the banks.

That's not exactly the situation on the ground, now is it? However, the fact remains the the country can no longer afford the PS at its current price. Just like in a private company, the employees have a choice of pay cuts or job losses or both. I think it's better initially to cut pay across the board and then when we have a bit of breathing space, to weed out the dead wood and sack them and to streamline the entire system and eliminate duplicate positions (of which there are at least hundreds, especially in the HSE).

The banks need repaying because they have to repay the money to banks that they in turned borrowed it from. If the banks are not repaid they will go bust and somebody will buy them and still want repaying. If the state buys the debt and 'lets people off' then your fellow taxpayers are the ones bailing you out of negative equity. People in negative equity just need to deal with their decision. If a 10% pay cut means you can't afford your repayments then you clearly over extended yourself as interest rate rises could easily add that difference to a repayment mortgage anyway!

NewDubliner

murphaph wrote: »

Almost correct. I make no bones about that but I wouldn't say that the government freely gave unionised PS workers all those pay increases,

And ordinary workers, just looking for somewhere to call home, happily paid what was demanded by the private sector?

murphaph wrote: »

now we have a situation where we have a wage bill we simply can't afford.

People can no longer afford to pay the excessive demands of the private sector either, but that is somehow different.

murphaph wrote: »

Just like in a private company, the employees have a choice of pay cuts or job losses or both.

Private companies (Banks) are getting huge injections of cash. Share prices and property prices are being propped up. We can afford that?

murphaph wrote: »

The banks need repaying because they have to repay the money to banks that they in turned borrowed it from. If the banks are not repaid they will go bust and somebody will buy them and still want repaying.

So a debt to a big bank is more important than paying people for their work?

murphaph wrote: »

If the state buys the debt and 'lets people off' then your fellow taxpayers are the ones bailing you out of negative equity.

Given the use of limited liability, isn't that exactly what will happen for the property developers? (But not for ordinary 'joe'.)

murphaph wrote: »

People in negative equity just need to deal with their decision.

Tell that to the property lobby.

murphaph wrote: »

If a 10% pay cut means you can't afford your repayments

How do you know it's 10%?

murphaph

NewDubliner wrote: »

And ordinary workers, just looking for somewhere to call home, happily paid what was demanded by the private sector?

If you buy a house from your next door neighbour, would you still use that terminology? Most properties sold in Ireland are not sold by developers, but by private citizens.

NewDubliner wrote: »

People can no longer afford to pay the excessive demands of the private sector either, but that is somehow different.

How are these demands excessive? The bank just wants you to pay back what you borrowed to buy the house off your neighbour. The bank doesn't want your first born child, just their money back.

NewDubliner wrote: »

Private companies (Banks) are getting huge injections of cash. Share prices and property prices are being propped up. We can afford that?

We can't let the banking system collapse completely. I disagree with the current proposals for assisting the banking sector too. I am not a fan of NAMA.

NewDubliner wrote: »

So a debt to a big bank is more important than paying people for their work?

People will still be paid for their work. They will be paid an appropriate rate for 2009 and seeing as the cost of living is now almost back at 2006 levels, and seeing a tax returns are 20bn a year short, that will be less than it currently is. No getting around it, even without NAMA.

NewDubliner wrote: »

Given the use of limited liability, isn't that exactly what will happen for the property developers? (But not for ordinary 'joe'.)

See above. I'm not in favour of NAMA and never said I was. The banking system does need taxpayer assistance though, as if it is just let collapse Ireland will be the financial laughing stock of the world and confidence in our own ability to regulate our financial system will evaporate from world markets and Ireland will return to the 1950s. An economy needs confidence and a heavily FDI dependent economy needs external confidence in particular. If the banks were allowed to fail with no assistance from us taxpayers, you would almost certainly be out of work in a year or two when the IMF step in and slash the PS workforce AND pay for those who remain.

There were warnings from plenty of economists that the bubble would burst. Many people chose to ignore those warnings and purchased a house at a price which they knew was excessive, be it from their neighbour or a developer or someone else. If you'd paid cash would you now be looking for a refund?

kindajaded

irish_bob wrote: »

or german wages

consultants in germany are paid half of what they recieve here , teachers , guards and nurses earn considerably less aswell despite paying higher taxes

yes - consultants are NOW on contracts twice the value of german public consultant contracts. but they earn much more than they are paid for their public contracts through topping up with private work.

why do we have public only contracts? - because M. Harney got it into her head that the only way to police consultants working their contracted hours in the public service was by creating 'public only' contracts. a stupid and ridiculously expensive idea.
german consultants get not much less than the old contract (when accounting for pp etc) but they can and still do top up with private practice.

we do not need these public only contracts and they should be gotten rid of.

and just to remind you - ironically, the people who were most against it to start off with were consultants.

irish_bob

kindajaded wrote: »

yes - consultants are NOW on contracts twice the value of german public consultant contracts. but they earn much more than they are paid for their public contracts through topping up with private work.

why do we have public only contracts? - because M. Harney got it into her head that the only way to police consultants working their contracted hours in the public service was by creating 'public only' contracts. a stupid and ridiculously expensive idea.
german consultants get not much less than the old contract (when accounting for pp etc) but they can and still do top up with private practice.

we do not need these public only contracts and they should be gotten rid of.

and just to remind you - ironically, the people who were most against it to start off with were consultants.

consultants in ireland are free to earn as much as they like in private , this is after they recieve 220 k in a public wage of course

NewDubliner

murphaph wrote: »

The banking system does need taxpayer assistance though, as if it is just let collapse Ireland will be the financial laughing stock of the world and confidence in our own ability to regulate our financial system will evaporate from world markets and Ireland will return to the 1950s.

An interesting bit of menace. I can see how our bankers would agree with you.

Would our credibility not be better enhanced if we showed that no bank is immune from the consequences of its mistakes? Or would that displease their international cronies?

gurramok

NewDubliner wrote: »

An interesting bit of menace. I can see how our bankers would agree with you.

Would our credibility not be better enhanced if we showed that no bank is immune from the consequences of its mistakes? Or would that displease their international cronies?

Hence scrap Nama. The money ain't there for Nama or the PS and putting either bill onto the national debt for our kids to pay off is criminal.

optocynic

NewDubliner wrote: »

An interesting bit of menace. I can see how our bankers would agree with you.

Would our credibility not be better enhanced if we showed that no bank is immune from the consequences of its mistakes? Or would that displease their international cronies?

You just want your mortgage paid for you!
The banks made mistakes... but you made one too, by buying an overvalued house...
I did the same, but I'm man enough to admit it!.. and man enough to suck it up, and pay my way.

jimmmy

irish_bob wrote: »

consultants in ireland are free to earn as much as they like in private , this is after they recieve 220 k in a public wage of course

Do not forget the big, six figure government pension they get at as well....this is a huge perk of the job. I know one who is retiring a bit earlier than usual...he said he can do it because he had so many hours / holidays worked up. He has no kids, I assume he has the house he bought 30 years ago paid off....God knows what he will do with his pension of well over 100,000 grand a year.

S.L.F

zootroid wrote: »

AS for the pension levy, workers in the private sector contribute to their own pensions. I don't think it's unreasonable to expect workers in the public sector to do likewise.

I know a girl who was temporary in the Civil Service and now is permanent she is not entitled to a pension when she retires but she pays the pension levy.

That is to say the pension levy is just a tax on working for the Public Service ie a pay cut in another words.

OldJay

Given the benchmarking, the job security and the paid-pensions, pay cuts for public service employees is entirely fair.
No use wafting on about NAMA, the government, blaming such-and-such, the banks or the public vs private sector..
The bottom line is that all wage earners are going to have to pitch-in, take the pinch and contribute to a solution instead of looking after themselves.

SerialComplaint

Justind wrote: »

The bottom line is that all wage earners are going to have to pitch-in, take the pinch and contribute to a solution instead of looking after themselves.

Perhaps you could explain how cutting salaries in the public sector only ensures that all wage earners pitch-in (particularly in the light of the recent Mercer survey reported in the Irish Times showing that just 25% of private sector staff have had salary cuts?

Flex

SerialComplaint wrote: »

Perhaps you could explain how cutting salaries in the public sector only ensures that all wage earners pitch-in (particularly in the light of the recent Mercer survey reported in the Irish Times showing that just 25% of private sector staff have had salary cuts?

Have a read through this thread

http://www.boards.ie/vbulletin/showthread.php?t=2055765944

SerialComplaint

Flex wrote: »

Have a read through this thread

http://www.boards.ie/vbulletin/showthread.php?t=2055765944

Given that the figures quoted in that thread cover only a small part of the private sector, it doesn't have much relevance.

astrofool

SerialComplaint wrote: »

Perhaps you could explain how cutting salaries in the public sector only ensures that all wage earners pitch-in (particularly in the light of the recent Mercer survey reported in the Irish Times showing that just 25% of private sector staff have had salary cuts?

I'd say the govt. would have loved to have given large paycuts to, or let go of 25% of the pubic sector workforce, unfortunately, in a union, all workers have to be treated "equally".

SerialComplaint

astrofool wrote: »

I'd say the govt. would have loved to have given large paycuts to, or let go of 25% of the pubic sector workforce, unfortunately, in a union, all workers have to be treated "equally".

They already gave large paycuts to 100% of the public sector workforce. The obligation to treat all workers equally and fairly has nothing to do with union members. It is a matter of law. Not all public service employees are union members.

Sandvich

turgon wrote: »

According to the Irish Times, linky.



This is exactly what is wrong with trade unionism, they just cant admit that cuts will have to be made, and its ironic that trade unions evolved because of the selfish wants of the owners, not look at what happens.

Reminds me of a quote from Charles Dickens' Hard Times, "their own irrational will, was to pretend there could be smoke without fire, harvest without seed, anything or everything produced from nothing". For there to be progress there must be cuts.

Making cutbacks is not a science. Economics in general is not hard science. And even hard science can be addended. There is no reason to believe absolutely there must be cutbacks, even if it seems like the only way. It's this attitude that really annoys me - you think you're being rational when in reality it's the government playing up on your wish to appear rational.