Will the government ever grasp the nettle of public sector pay ?

K-9

NewDubliner wrote: »

Living costs would have to come down too. If you're going to deflate, it has to happen in all sectors at the same time.

They are coming down. Rents and mortgages have dropped which were probably the biggest costs and other areas are dropping.

ardmacha

I think the real issue is that they seem unwilling to have those salaries re-adjusted now when they were perfectly willing to have that done in the "good times".

Salaries have been cut, the pension levy is a salary cut and nothing else. Now it may be accounted for as a tax which confuses the issue, but it is a salary cut. Add in a freeze on promotions, increments and the like and many individuals are quite a bit down. Now you can argue for a larger cut, but the problem here is that while some parts of the private sector have had reductions, others have not and the likes of the ESB have had increases. The ESB has not suffered a loss of demand as it is a utility, but schools have not suffered a loss of demand either.

NewDubliner

K-9 wrote: »

They are coming down. Rents and mortgages have dropped which were probably the biggest costs and other areas are dropping.

The interest element of mortgages has come down, but people are still faced with huge capital repayments on declining salaries....and interest rates will go up again as the leading Eurozone countries recover, which will be before we will.

Private health care, optical and dental and child care are still exhorbitantly high. Food still seems high, as are cellphone, cable TV, satellite and broadband which are based, not on the cost of provision but on a 'what the market will bear' tariff. Seems like we'll all have to cancel out contracts to get them to adjust their prices.

ixoy wrote:

Having said all that, if the government were to take a hatchet approach and cut 10% off all PS/CS wages

They did.

Hillel

ixoy wrote: »

Most likely. I think the real issue is that they seem unwilling to have those salaries re-adjusted now when they were perfectly willing to have that done in the "good times". If it were a private company, that'd be okay but this unwillingness by many in the PS/CS to reform is at the cost of everyone in the form of taxes, etc.

Exactly right. The immediate cost is, as you rightly point out, in the form of taxes. The longterm cost may be much greater. The refusal of the public sector to accept pay reform means that the country is falling ever more into debt. It is simply not possible to raise enough money in taxes. However, without reform, the government will have no option but to try. This will rapidly make Ireland an unattractive location to live and workin. The recession will lift elsewhere and there will be a exodus of talent to more attractive economies. We could easily end up in a downward spiral with no easy way out.
Ironically, this could be an empty victory for the public sector. Public Service job security, gold-plated pensions, whatever, will all count for nought if the country is bankrupt.

ixoy

ardmacha wrote: »

Add in a freeze on promotions, increments and the like and many individuals are quite a bit down.

Since when have increments been frozen? Anyone I know in the CS is still getting a pay increase in accordance with the pay-scale that they're on. Or are you referring to the NWA?

Hillel

ardmacha wrote: »

Salaries have been cut, the pension levy is a salary cut and nothing else. Now it may be accounted for as a tax which confuses the issue, but it is a salary cut.

It is not a salary cut. The pension levy is a (small) step toward bringing parity between public sector and private sector pension provisions. Right now all private sector pensions are substantial deficit. But, lets leave that aside. Lets also assume that everyone in the private sector, with the requisite service, gets a final salary pension comparable with the public service (they don't). Even then, there are not one but two "elephants in the room". The first is the indexation element of public service pensions - beyond the expectations of the vast majority of private industry workers. The second is the linking of that pension to serving grades - i.e. where a grade gets an exceptional increase, perhaps because the responsibilities of that grade has increased, the pensioners also get that increase. This is not affordable in private industry and it is debatable whether it is affordable in the public sector either. At the very least it warrants an additional pension contribution many multiples of the current pension levy.

ardmacha wrote: »

Add in a freeze on promotions, increments and the like and many individuals are quite a bit down.

Promotions are no part of pay and remuneration - I can assure you that they are few and far between in the private sector, also.
It is outrageous that anyone would be arguing for incremental pay increases in the current climate. Even in the best days, increases in the private sector were based on contribution and experience, the concept of increases through entitlement never arose.

ardmacha wrote: »

Now you can argue for a larger cut, but the problem here is that while some parts of the private sector have had reductions, others have not and the likes of the ESB have had increases.

I amwith you on this one. The failure to row back the ESB increases is yet another failure of this government. The high cost of electricity is one of the causes of companies pulling out of this country. Yet, the company is allowed to increase its overheads which can only result in electricity costs being higer than they would otherwise need to be.

K-9

NewDubliner wrote: »

The interest element of mortgages has come down, but people are still faced with huge capital repayments on declining salaries....and interest rates will go up again as the leading Eurozone countries recover, which will be before we will.

The high prices is a major problem, often over 35/40 years too. Mortgages and Rents have come down, yes, they could well go up again, but that's for the future not now. Housing costs have come down. You can't really argue "sure they'll go up again" as an excuse.

NewDubliner wrote:

Private health care, optical and dental and child care are still exhorbitantly high. Food still seems high, as are cellphone, cable TV, satellite and broadband which are based, not on the cost of provision but on a 'what the market will bear' tariff. Seems like we'll all have to cancel out contracts to get them to adjust their prices.

True, childcare in particular is a massive cost. The other problem is we are a small economy, we don't have the economies of scale the UK has.

Hillel wrote: »

I amwith you on this one. The failure to row back the ESB increases is yet another failure of this government. The high cost of electricity is one of the causes of companies pulling out of this country. Yet, the company is allowed to increase its overheads which can only result in electricity costs being higer than they would otherwise need to be.

The ESB has reduced or will soon, same with Gas too I think. Definitely though, the increases of the last 4/5 years have been huge. I think we used to be near, or even below the EU average then.

Hillel

K-9 wrote: »

The ESB has reduced or will soon, same with Gas too I think. Definitely though, the increases of the last 4/5 years have been huge. I think we used to be near, or even below the EU average then.

Yes, but without the pay increases the reductions would have been greater - and Ireland would have been just a little bit more competitive!

gurramok

K-9 wrote: »

The high prices is a major problem, often over 35/40 years too. Mortgages and Rents have come down, yes, they could well go up again, but that's for the future not now. Housing costs have come down. You can't really argue "sure they'll go up again" as an excuse.

Rents at their peak were nowhere near the highs of buying a house so the option of renting was there to alot but they chose to buy an expensive house through keeping up with the Jones'.

NewDubliner

Hillel wrote: »

It is not a salary cut. The pension levy is a (small) step toward bringing parity between public sector and private sector

It's not a pension contribution. The law states that the amount deducted from pay does not confer privileges of any kind. You can't use the amount deducted as a credit should you change employment. And as you know, the fund where this money is supposed to be lodged (NPRF) is now the bank bail-out fund.

If it's not a pay cut and it's not a pension contribution, then it's a special tax on public-service workers. The proceeds being used to prop up private-sector pension funds in the banks.

ixoy

NewDubliner wrote: »

If it's not a pay cut and it's not a pension contribution, then it's a special tax on public-service workers.

Well it's not a pay cut because, if it was, then it'd affect pensioners whose pension is tied to the wage of the position. It's as effective as a pay cut to those working, but not for those no longer working.

'Course it should have just been a straight pay cut as it would:
1) Stop the perception that this is a special PS/CS tax
2) Actually make more savings as pensions are brought down (politically unpalatable but sure FF have already pissed everyone off anyway).

K-9

Hillel wrote: »

Yes, but without the pay increases the reductions would have been greater - and Ireland would have been just a little bit more competitive!

Sorry, I was referring to the ESB/Gas increases.

gurramok wrote: »

Rents at their peak were nowhere near the highs of buying a house so the option of renting was there to alot but they chose to buy an expensive house through keeping up with the Jones'.

€14/1500 for a 2 bed apartment would have got a mortgage, though maybe more out of Dublin. The "rent is dead money" attitude that is ingrained in our pysche didn't help either. "Sure I'm being fleeced for rent so I might as well get fleeced by a developer!"

ardmacha

The pension levy is a salary cut. A straight salary cut was not introduced because it would lead to endless court cases about contractual arrangements, whereas the government has an established right to set up a tax and time is important in this situation. It is unfair on workers vs pensioners as the worker on €x gets a cut, a person probably with a mortgage etc. The pension on €x does not get a cut, whose mortgage is probably long paid off. I am not sure how this will pan out over time. The simplest thing to do would be to reduce the levy in lieu of increases when some sort of growth and inflation returns. The question of public service pensions vs private ones is a bigger issue. But there is nothing outrageous about a pension that grows with living standards, any sensible investment strategy should achieve that. Other public sector reward vary, there is a need to weed out the more excessive payments, like prison officer lunch allowances for officers based in Wheatfield who are in Mountjoy for the day. There are many arrangements in the public sector, the best practice found in the public sector is reasonable, this should be extended to everyone rather than the opposite.

Hillel

ardmacha wrote: »

But there is nothing outrageous about a pension that grows with living standards,

I agree with you and it should be a policy objective for government that such a pension be available to all workers, public & private sector.
What is outrageous is that most private sector workers have a minimal pension, if any, while many in the public sector have post-retirement salaries which are linked to those of their colleagues who are still working.
(Unless, of course, such salaries go down as well as up, in line with pay trends in Industry.

ardmacha wrote: »

any sensible investment strategy should achieve that.

That's what many in the private sector thought - only to see years of prudent management and savings wiped out. However, unlike the public sector, their employer is under no obligation to bail them out - even where they have the means of doing so.

blast05

Anyone I know in the CS is still getting a pay increase in accordance with the pay-scale that they're on. Or are you referring to the NWA?

So to clarify, are all CS getting a pay rise this year as an increment linked to length of service.
I seriously hope not.

NewDubliner

blast05 wrote: »

are all CS getting a pay rise this year as an increment linked to length of service.

No.

ixoy

blast05 wrote: »

So to clarify, are all CS getting a pay rise this year as an increment linked to length of service.
I seriously hope not.

Not all as not all are due. Those that would be due, according to the payscales, will receive a rise. Here's a list of the pay at various points for the CS. In general, unless noted otherwise, you rise to the next level of pay on an annual basis. So a CO who joined last year on €24,255 will go up this year to €25,338, a 4.4% pay increase (it's dependent on passing on PMDS but you'd have to really suck at your job not to get it).

I'm not aware of any move to freeze these increments (obviously if you're at the top of your pay scale you get nothing) but for those getting it, it does make their complaints about the pension levy less sympathetic.

blast05

ixoy wrote: »

Not all as not all are due. Those that would be due, according to the payscales, will receive a rise. Here's a list of the pay at various points for the CS. In general, unless noted otherwise, you rise to the next level of pay on an annual basis. So a CO who joined last year on €24,255 will go up this year to €25,338, a 4.4% pay increase (it's dependent on passing on PMDS but you'd have to really suck at your job not to get it).

I'm not aware of any move to freeze these increments (obviously if you're at the top of your pay scale you get nothing) but for those getting it, it does make their complaints about the pension levy less sympathetic.

So in essence increments for length of service still apply ........ I'm close to being in a state of shock here. :eek: :mad:

gurramok

Yeh, increments for the sake of it. Nothing to do with performance/productivity.

NewDubliner

gurramok wrote: »

Yeh, increments for the sake of it. Nothing to do with performance/productivity.

Subject to meeting PMDS targets?

gurramok

NewDubliner wrote: »

Subject to meeting PMDS targets?

Yeh sure, but benchmark backwards first

NewDubliner

gurramok wrote: »

Yeh sure, but benchmark backwards first

How are legal, bank & IT sector salaries these days?

ixoy

NewDubliner wrote: »

Subject to meeting PMDS targets?

So in other words automatic

I recall the Sunday Times saying well ess than 1% got 1 (think it was .1%) in Revenue for example. Given you only need a 2+ to get the increment, and given PMDS targets are pretty poor (I've seen them myself - there's no real meat to them), then it's a pretty much guaranteed increase unless you're really bad - and the statistics back this up.

Firetrap

It wouldn't surprise me if increments stop soon. The government probably didn't get around to it yet.

gerry28

So in essence increments for length of service still apply ........ I'm close to being in a state of shock here.

Why would we not get them? its written in our contract. To freeze them would mean those lucky enough to be at the top of their scale wouldn't be affected but newer staff would (for the same job).

I've given all i'm willing to give to this donkey of a government, ie. pension levy, income levy, pay freeze, health levy etc. We've taken all that on the chin... No more, not an inch as big Ian would say!!

Hillel

gurramok wrote: »

Yeh, increments for the sake of it. Nothing to do with performance/productivity.

Exactly, and for TD's and Ministers too! (Brian Cowen will only ever attack the soft targets.)

ixoy

gerry28 wrote: »

Why would we not get them? its written in our contract. To freeze them would mean those lucky enough to be at the top of their scale wouldn't be affected but newer staff would (for the same job).

Why would you not get them? Well *psst* the government's a little low on cash right now.
As to those who were luckier to join earlier - welcome to reality! That's often how it works, especially currently when wages are more likely to go downwards than up.

Can you not honestly see how irritating it could be to hear people complain about the pension levy (pay cut) but suddenly keep quiet about the increments (i.e. pay rise) they get in the same year?

I've given all i'm willing to give to this donkey of a government, ie. pension levy, income levy, pay freeze, health levy etc. We've taken all that on the chin... No more, not an inch as big Ian would say!!

We all pay the same levies bar the pension levy so I wish PS/CS workers would stop listing them all out. The levy, while annoying, isn't really that much of a cut when it's offset by a pay rise by way of increments.

NewDubliner

ixoy wrote: »

The levy, while annoying, isn't really that much of a cut when it's offset by a pay rise by way of increments.

The pay cut was, what, 8-10%? And the increments are, how much?

ixoy

NewDubliner wrote: »

The pay cut was, what, 8-10%? And the increments are, how much?

Actually was it not more 7-9%? And was that not further offset by reduced pension contributions in the supplementary budget - how much as a % did that offset the levy? As I recall the 7% pay cut is a 3.7% reduction in net pay for a single civil servant on the post-'95 pay scale.

Increments vary - I think it's better at the lower levels (in the order of 4-6% depending on grade) and narrows further up. Obviously an increment could push you into a higher levy band but you'd still have a net gain. That could alleviate some of the strain - obviously not fully but I really do wish we'd hear more about how these sort of things offset it and reduce the pain on the take home pay.

As pay cuts go, outside in the private world, the pay cut (when factored against increments and reduced pension contributions) isn't really that large, especially given how badly the government is doing. I do believe the pay cuts could be better distributed (make the TDs pay far more) but they could be a lot worse as many other boards users would testify to.

Hillel

NewDubliner wrote: »

The pay cut was, what, 8-10%? And the increments are, how much?

WE established some (VERY CONSIDERABLE) time ago that we ARE talking about a LEVY and NOT pay cuts. Sorry for shouting, but it appears that the message is being lost in the noise.

(It would have been far better if it had been a pay cut, as the pensions bill would have been cut, as well.)