Reform needed, not a reverse bubble

peasant

Original title: The government has seen the virgin Mary

...you know, like in Knock ...stare at the sun long enough and it'll burn your retina and you'll start seeing things. Listen to some blathering "visionary" long enough with your eyes burning and you'll believe it's the virgin Mary you're seeing.

First they saw the "celtic tiger". Some visionary told them if only we sold houses to each other long enough, we'd be the richest and bestest country in the whole wide world. And they belived it and fuelled the fire.

Now they're seeing "hard decisions". If only they cut everybodie's pay long and hard enough, the visionaries are telling them, everything they ballsed up previously will come right again and we will have the shortest and easiest recession in the whole wide world.

They deliberately ran the country to the ground with their first vision and they're about to do it again with the second coming.

Yes, costs have to be cut, we have to be competitive, but there is a limit.

You do not even think about cutting pay in a company that is operating competetively, especially not when the aggrieved workforce of that profit-making company has you by the painful bits and can simply turn off the lights.
Because that'll be the end of that. No lights, heat or transport for a few days in the middle of winter and we'll have riots in the streets.

Yet there are people out there saying that the governement is on the right path, that the power of "the beards" has to be broken if we ever want to come right again, if only everybody has their wages cut and cut again that we will be ok.

Rubbish .... this is just a building bubble in reverse. As much as you can't build a sustainable economy by inflating house prices, you can't restore it once it's broken by simply cutting everybodies income regardless.

We need radical reform in this country. Reform in the way we do politics, reforms in administration, reforms in regulation.

Visions of Mary won't do.

ei.sdraob

peasant wrote: »

You do not even think about cutting pay in a company that is operating competetively

wait are you saying that The Company (the government and its army of employees, and large number of pensioners, welfare etc)

is operating competitively?

compare Ireland Inc to General Motors (250K employees + ecosystem)


the later quite literally went bankrupt, Ireland Inc is bankrupt but we dont know it yet since, money is still being lend to us

if that money flow stops thats its

caput


if the money keeps coming then most of the income will go to just service the debt (almost all of the money saved in this budget will got to pay interest on money already borrowed)

peasant wrote: »

We need radical reform in this country. Reform in the way we do politics, reforms in administration, reforms in regulation.

we were promised reform with benchmarking all them years ago

it failed to materialize

...

Riskymove

ei.sdraob wrote: »

wait are you saying that The Company (the government and its army of employees, and large number of pensioners, welfare etc)

is operating competitively?

he's talking about the ESB there

Smcgie

I thought you were on about the virgin Harney

peasant

ei.sdraob wrote: »

wait are you saying that The Company (the government and its army of employees, and large number of pensioners, welfare etc)

is operating competitively?

nope, I was thinking specifically about the ESB there

Scofflaw

No offence, peasant*, but this thread is going to go nowhere with a title like that.

moderately,
Scofflaw

* surprisingly fun to say!

peasant

Scofflaw wrote: »

No offence, peasant*, but this thread is going to go nowhere with a title like that.

I fail at David McWilliams-isms apparently

Permabear

This post has been deleted.

P. Breathnach

peasant wrote: »

I fail at David McWilliams-isms apparently

Count that as a point in your favour.

Dannyboy83

P. Breathnach wrote: »

Count that as a point in your favour.

Ouch! LOL:D


OP,
I agree with what DonegalFella said.
Its going to be very difficult to have a rational discussion about this, because a large section of whatever group in society get hit, will feel that they are taking the burden, regardless of what makes economic sense or not.

On the other hand, perhaps its a learning experience?
I imagine subsequent governments will be extremely reluctant to give 'shortsighted' pay increases in future times of plenty, based on the events which are transpiring now.
Much like pensioners never get hit, based on something which happened during the state's infancy.

Scofflaw

Its going to be very difficult to have a rational discussion about this, because a large section of whatever group in society get hit, will feel that they are taking the burden, regardless of what makes economic sense or not.

Funnily enough, I think that applies to every policy discussion ever in the history of the world, right back to when Thog and Ugg debated whether to prioritise hunting trips or root gathering.

cordially,
Scofflaw

ei.sdraob

Dannyboy83 wrote: »

Ouch! LOL:D


OP,
I agree with what DonegalFella said.
Its going to be very difficult to have a rational discussion about this, because a large section of whatever group in society get hit, will feel that they are taking the burden, regardless of what makes economic sense or not.

On the other hand, perhaps its a learning experience?
I imagine subsequent governments will be extremely reluctant to give 'shortsighted' pay increases in future times of plenty, based on the events which are transpiring now.
Much like pensioners never get hit, based on something which happened during the state's infancy.

nah

once we recover (if? when??)

it be back to same old, handing out money to gain power or get reelected

no need to learn from history sure when you can have champagne in the Galway tent

peasant

donegalfella wrote: »

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A rational spending cut would be one that looks at the individual circumstances.
Certain public employees would deserve a raise, others shouldn't get paid at all.
Certain public institutions need finance, others need closing altogether.
That ..and all the thousands of shades of grey inbetween would be a rational approach.

A one size-fits-all colander-style haircut across the public sector is crude and unfair (but possibly necessary due to lack of time to do it properly), but antagonising productive ESB employees (for the sake of going after everybody in equal measure) is simply suicidal.

dan_d

Thog and Ugg...
We're regressing rapidly anyway. And those were simpler times!

Dannyboy83

Scofflaw wrote: »

Funnily enough, I think that applies to every policy discussion ever in the history of the world, right back to when Thog and Ugg debated whether to prioritise hunting trips or root gathering.

cordially,
Scofflaw

I would disagree.

A lot of people don't care about decisions that affect them and if they do, might not feel compelled to protest about it. How else can we explain the apathy/inertia surrounding Irish politics?

Almost everybody cares about money matters which affect them directly tho.

P. Breathnach

Scofflaw wrote: »

Funnily enough, I think that applies to every policy discussion ever in the history of the world, right back to when Thog and Ugg debated whether to prioritise hunting trips or root gathering.

I thought that particular debate was resolved very quickly: Thog and the rest of the lads went for the glory of hunting, while Ugg and the rest of the wives gathered the roots (along with nuts, berries, and seeds).

People ate far more plant food than meat in those days, so the metaphor holds up quite well: the glory-boys felt more important, got most attention, and contributed less to the common good.

ejmaztec

Given that un-competive energy costs here is a problem for existing businesses, and potential businesses, it's only fair that those costs are reduced.

State bodies are forced to reduce the labour costs through legislation, and private businesses do it because the market tells them that there's no other option.

Why should semi-state organisations be left out? I can't see them volunteering cuts, not with the more powerful unions on their backs.

If all costs aren't reduced, then when the rest of the world is out of recession, Ireland will still not be able to compete for business if our costs haven't dropped more than our competitors.

Scofflaw

Dannyboy83 wrote: »

I would disagree.

A lot of people don't care about decisions that affect them and if they do, might not feel compelled to protest about it. How else can we explain the apathy/inertia surrounding Irish politics?

Almost everybody cares about money matters which affect them directly tho.

Sure - and for several years nobody has been negatively affected by government decisions. Some people got larger handouts than others, but that's slightly different.

cordially,
Scofflaw

Permabear

This post has been deleted.

peasant

ejmaztec wrote: »

Given that un-competive energy costs here is a problem for existing businesses, and potential businesses, it's only fair that those costs are reduced.

I would agree 100%

However (as you can see in the other thread) in case of the ESB it's not wages that predominantly decide what the cost of electricity is ...it's the regulator.

Just doggedly cutting ESB wages because other wages were cut (and wage cuts is the current vision of the day) isn't going to bring electricity prices down enough to make a difference.

It will however antagonise the unions in the ESB enough that they'll pull the plug ...and then where will we be?

ei.sdraob

donegalfella wrote: »

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ill have to correct you there (and many other people today) with some facts

http://boards.ie/vbulletin/showpost.php?p=63507805&postcount=139

ei.sdraob wrote: »

....

now to move onto facts from http://www.esb.ie/downloads/about_esb/2007/esb-annual-report-complete-2007.pdf

Net payroll cost for employees (excluding pension): 364,643,000
Total Operating cost: 3,068,896,000

thats 11% goes to salaries (and probably fallen since the company is shrinking)

the above is only operating cost, im not including the billions being spend on retrofitting old plants, like the third of a billion Moneypoint project to scrub **** from exhausts


the above cost of salary divided by 7500 employees is an average salary of 48K, now this of course is distorted since the chairman was on a salary of 500K, while alot of people at the lower levels are on 20K and 6 months contracts

...

peasant

donegalfella wrote: »

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Dunno if your 80k figure is correct (seems a bit high) ...but anyway ....There probably are quite a few million in savings/improvements to be found within the ESB, but that should be done internally and not by governement dictat.
The big elephant in the room there is the electricity price which was hiked up by the governement (via the regulator) to bring up profit margins enough to entice private companies into the electricity sector.

Let the governement/regulator set a lower price and the ESB sort out internally how they achieve it.

Do not just jump in there and cut wages because everybody else got a cut.

Especially not when while doing so you run the risk of bringing this country from a severe recession to riots in the street within a week.

ei.sdraob

peasant wrote: »

Dunno if your 80k figure is correct (seems a bit high).

it is high (unless you count ONLY the top boardroom members) as per facts posted

peasant wrote: »

....There probably are quite a few million in savings/improvements to be found within the ESB, but that should be done internally and not by governement dictat..

agree its the government interference that lead us into this mess

and there are millions being saved with old inefficient plants closing down, and a practical ban on hiring new people, with just about everything being outsourced

also alot of assets are being wasted like the network being handed over to heanet for practically free, and empty collocation facilities

ardmacha

A one size-fits-all colander-style haircut across the public sector is crude and unfair (but possibly necessary due to lack of time to do it properly), but antagonising productive ESB employees (for the sake of going after everybody in equal measure) is simply suicidal.

The lack of time was largely manufactured. The unions actually did come up with proposals for reform, this path might not have removed the need for cut but might have reduced the percentage cut required. The talks with the unions could have started in the summer rather than being left to one week before the budget. Now post cuts it is not clear where the government goes from here, they seem to imply that if there is no reform then there will be further cuts. But it is difficult to justify further pay cuts in Revenue (for example) because the HSE is overstaffed.

As for the ESB being "productive", they are no more inherently productive than the public service. An engineer in a water treatment plant is just as useful to society as one in a power station.

peasant

ardmacha wrote: »

The lack of time was largely manufactured.

"manufactured" is too grand a word ...it implies planning and intent.:pac:

Time was dithered away through three half hearted "emergency budgets" while the governement ran around like headless chickens waiting for their next vision.

It took them over a year to reverse from "spend with both hands" to "cut everybodies wages".

But my real gripe is this: This is not new policy ..it is a 100% reversal of the old one ...same sh!t, different direction.

Permabear

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P. Breathnach

donegalfella wrote: »

This post has been deleted.

How?

peasant

donegalfella wrote: »

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That might work ...if there was a market in the first place. Currently there isn't one ...not one that would have the ability to self-regulate anyway.

Do you believe that the country should be held to ransom by threats of "chaos" from the unions?

No, the unions shouldn't have that power in the first place.
But as they do have it, they should not be approached in a confrontational manner ...not right now, not under these circumstances. This particular issue should be left for another day.

IMO the reason why the confrontation with the PS unions worked without causing riots in the street is because the PS emplyoees (despite their very public complaining) do understand the basic maths behind our current public spending vs public income.

ESB workers who produce a profit for their "company" don't. They don't see it as applicable to them.

Permabear

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ei.sdraob

donegalfella wrote: »

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i would like to see which hole did they pull these figures out of

i did the maths earlier based on the accounts figures (linked) for an average of 48K, and as mentioned the people at the top in ESB make 500K, while yes there are people there earning nice salaries of 60K+, the majority i worked with earned well bellow 30K in 2006

P. Breathnach

donegalfella wrote: »

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That's no answer, unless you accept that the ESB is really a monopoly, both as a purchaser and as a seller. Do you want the ESB to buy from providers like Airtricity on terms that it can pretty well decide for itself, and do you want the ESB to set consumer prices solely on the basis of maximising profit?