Why has the €20 Billion deficit not reduced ?.

fliball123 · 28-07-2011 11:31AM

InigoMontoya wrote: »

As I already said, I'm not defending the ongoing payment of increments.

I do think that saying people should be ashamed to accept them is a bit unrealistic. I'd be slightly bemused if I was getting increments at this stage, but I wouldn't be ashamed.

Edit: Also, I doubt that the "necessity" for water and property charges would disappear if increments were put on hold immediately.

True and thats what I have said I am not saying for one minute that there will or should be no more tax hikes or cuts for the welfare but why is it fair to leave a large proportion of what we pay out in ps wage untouched infact it is rising by 1/4 of a billion a year?

Rabidlamb · 28-07-2011 11:32AM

InigoMontoya wrote: »

I work as a researcher in a university so I come under the PS heading. I don't get increments (though naturally I have been subject to the pay cut and levies) and my job depends on my work being good enough to attract funding for another project.

So, while I'm not arguing that increments shouldn't be stopped, perhaps you should think twice before throwing around terms like "thieving scum" on a blanket basis.

Would the PS stop spouting this levy or USC as a reason for sympathy.
Everyone pays it, you're not special.
Also, you now make a pension contribution on average 7%, I pay 6% which is matched by my employer & I still won't finish on half my salary when retirement comes.
So it could be argued we're quits but no, I had a pay cut of 25% in 2008 that has still not been reinstated.

You are not thieving scum, your unions however ?????

fliball123 · 28-07-2011 11:32AM

sollar wrote: »

Here is what Mr M Noonan said re increments:

'Increments within the Public Service vary in terms of timing, cost and application both within and across the various sectors of the Public Service and estimates of cost are of necessity, tentative.
It has been estimated that the annual cost in a full year of increments would be around €250 million. However, significantly reduced recruitment and higher numbers on the maxima of scales will mean that this cost will reduce in the coming years and will be affected by other factors. These include retirements, voluntary redundancies, number reductions, recruitment rates and the numbers of employees reaching the maximum of the scale, which cannot be quantified.
No specific provision is made in the financial allocations to public service bodies as they are required to meet the cost within their allocations.
Suspending increments would affect some public servants but would have no effect on others. Generally, incremental scales are longer for lower paid staff than for higher. Accordingly a higher proportion of lower paid including front line staff would be affected by a suspension of increments.
I have no proposals to change the current arrangements in relation to the payment of increments as they would disproportionately affect the lower paid staff in the public service.'

So you have learned how to embold a sentence...it doesnt matter who is getting it..It should be stopped when everything else is being cut and taxed why is this proportion of our spend increasing...we are still 18billion in the hole?

ParkRunner · 28-07-2011 11:34AM

fliball123 wrote: »

EF there has to be an overall solution do you deem it fair that the people getting welfare get a cut and people paying thus said increments will be bent over and ridden solid with increased taxes so that 300k odd can keep the terms and conditions...Do you not see the disparity in this..It all needs to be cut together...If not the balance between the PS and the rest of the country will be furthered

A person taken off social welfare and becoming a net contributor to the exchequer by taking up a job saves a lot more money than stopping increments. Given the large automatic deductions from public sector pay, the overall impact of a pay freeze/reduction will not save a huge net amount.

Godge · 28-07-2011 11:35AM

fliball123 wrote: »

Numerous reasons the interest on the loans to repaid has to be factored in and PS pay increments have gobbled up the majority of what was saved via PS wage cuts. Also the increase in taxes has had the opposite to the desired effect. People are spending less on goods so not as much made in that type of tax and with people losing their jobs and emmigrating Income tax has stayed static even after the tax being increased.

Why do people think they can get away with posting lies such as the statement in bold above? When a broad statement like that is posted, it should be the poster who is required to back it up with facts. It happens on both sides of this debate where people make these statements that have no basis in fact.

What is most surprising is that it is easy to find actual facts on the internet.

http://www.finance.gov.ie/documents/publications/reports/2010/payanal0510.pdf

Take the official Department of Finance report I have linked to. It states that the net pay and pensions bill has reduced from 18.753 bn in 2008 to 17.327 bn in 2010 a reduction of 1.426 bn and this does not take into account pension levy receipts of 875m in 2010. That means the total reduction in public service pay is 2.301 bn out of 18.753 bn which is a percentage cut of 12.2%. The percentage would have been much greater if I looked at pay only.

At the same time public service pay as a percentage of net non-capital expenditure has reduced from 50% to 43% therefore taking up a lower percentage of total expenditure i.e. it has reduced at a faster rate than other areas such as social welfare, grants to business etc.

On the other hand, the reductions have not kept pace with the reduction in GNP. However, given that there have been further reductions in pay for new entrants, a futher reduction in numbers and a reduction in pensions from the start of this year, I think that 2011 will show a further reduction in the pay and pensions bill. Unfortunately, I do not see a copy of the 2011 report on the finance website.

So to go back to the OP's question as to why the deficit has not reduced, the main answers are as follows:

- Money has been put into the banks (no new lending so money down a drain)
- New and increased taxes have not raised sufficient money (wrong type, should be property taxes)
- Social welfare has increased dramatically
- Interest costs on debt have risen

All of the above make it harder to reduce the deficit and it cannot be said that the public service pay bill is the main cause ahead of those four items.

fliball123 · 28-07-2011 11:35AM

dlofnep wrote: »

But it has reduced, by €1 billion if you do not include the funding of the banking sector.

at the start of this mess it was 20bill it is now about 18 maybe 17bill over 4 years and we have taken at least 10bill out of the ecconomy through taxes and cuts

dlofnep · 28-07-2011 11:36AM

fliball123 wrote: »

at the start of this mess it was 20bill it is now about 18 maybe 17bill over 4 years and we have taken at least 10bill out of the ecconomy through taxes and cuts

Which I pointed out - included in the deficit is banking 'investment'. We cannot afford to prop them up - hence the high deficit.

fliball123 · 28-07-2011 11:37AM

EF wrote: »

A person taken off social welfare and becoming a net contributor to the exchequer by taking up a job saves a lot more money than stopping increments. Given the large automatic deductions from public sector pay, the overall impact of a pay freeze/reduction will not save a huge net amount.

Aggreed but we still should have no proportion of our spending increasing these increments should have been stopped

Godge · 28-07-2011 11:38AM

fliball123 wrote: »

at the start of this mess it was 20bill it is now about 18 maybe 17bill over 4 years and we have taken at least 10bill out of the ecconomy through taxes and cuts

So given the figures I have provided of a cut between pay and pension levy of 2.301 bn in the net public service pay bill, will you agree that the public service pay bill has been the main contributer to the reduction in the deficit?

Shatner · 28-07-2011 11:39AM

Rabidlamb wrote: »

Would the PS stop spouting this levy or USC as a reason for sympathy.
Everyone pays it, you're not special.
Also, you now make a pension contribution on average 7%, I pay 6% which is matched by my employer & I still won't finish on half my salary when retirement comes.
So it could be argued we're quits but no, I had a pay cut of 25% in 2008 that has still not been reinstated.

You are not thieving scum, your unions however ?????

You don't know what you are talking about. The PS pension levy is a separate levy to the Health/Income levies that are now the USC.

It is an extra payment.

fliball123 · 28-07-2011 11:39AM

Godge wrote: »

Why do people think they can get away with posting lies such as the statement in bold above? When a broad statement like that is posted, it should be the poster who is required to back it up with facts. It happens on both sides of this debate where people make these statements that have no basis in fact.

What is most surprising is that it is easy to find actual facts on the internet.

http://www.finance.gov.ie/documents/publications/reports/2010/payanal0510.pdf

Take the official Department of Finance report I have linked to. It states that the net pay and pensions bill has reduced from 18.753 bn in 2008 to 17.327 bn in 2010 a reduction of 1.426 bn and this does not take into account pension levy receipts of 875m in 2010. That means the total reduction in public service pay is 2.301 bn out of 18.753 bn which is a percentage cut of 12.2%. The percentage would have been much greater if I looked at pay only.

At the same time public service pay as a percentage of net non-capital expenditure has reduced from 50% to 43% therefore taking up a lower percentage of total expenditure i.e. it has reduced at a faster rate than other areas such as social welfare, grants to business etc.

On the other hand, the reductions have not kept pace with the reduction in GNP. However, given that there have been further reductions in pay for new entrants, a futher reduction in numbers and a reduction in pensions from the start of this year, I think that 2011 will show a further reduction in the pay and pensions bill. Unfortunately, I do not see a copy of the 2011 report on the finance website.

So to go back to the OP's question as to why the deficit has not reduced, the main answers are as follows:

- Money has been put into the banks (no new lending so money down a drain)
- New and increased taxes have not raised sufficient money (wrong type, should be property taxes)
- Social welfare has increased dramatically
- Interest costs on debt have risen

All of the above make it harder to reduce the deficit and it cannot be said that the public service pay bill is the main cause ahead of those four items.

And you forget the CPA has use drowned in till 2014 so no more cuts in wage or numbers ...so thats 2.5 years away so with these ongoing increments will cost another 1.5 billion according to Mr Noonan..So in effect you have saved what a billion? and you have not even factored in what it costs to put these so called natural wasters on thier pensions...

fliball123 · 28-07-2011 11:41AM

Godge wrote: »

So given the figures I have provided of a cut between pay and pension levy of 2.301 bn in the net public service pay bill, will you agree that the public service pay bill has been the main contributer to the reduction in the deficit?

No I wont where have these people gone are we not picking up the tab for thier pensions?

ParkRunner · 28-07-2011 11:43AM

fliball123 wrote: »

Aggreed but we still should have no proportion of our spending increasing these increments should have been stopped

The net exchequer pay bill is still falling this year, estimated at 14.7bn, despite the main paycuts last year and the pension levy in 2009. Increments are a drop in the ocean compared to the massaive deficit still in existence. The net public sector pay bill is falling and will continue to fall.

fliball123 · 28-07-2011 11:45AM

proof is in the pudding lads if the ps get a pay cut before the CPA runs out we will know that the figures have been fudged.....September is the first date that the IMF will go though the books and they wont be happy with ahh sure we save x amount for abolishing the 30 mins for cashing the non existant cheques...

We need money saved ..when they do see 1/4 billion for pay increments to the ps I can only imagine what their thinking will be

fliball123 · 28-07-2011 11:47AM

EF wrote: »

The net exchequer pay bill is still falling this year, estimated at 14.7bn, despite the main paycuts last year and the pension levy in 2009. Increments are a drop in the ocean compared to the massaive deficit still in existence. The net public sector pay bill is falling and will continue to fall.

Once again where have they gone...They have not been sacked they are being fecked off onto their pension..has anyone got figures for the PS pesion payments over the last number of years?

Godge · 28-07-2011 11:50AM

fliball123 wrote: »

And you forget the CPA has use drowned in till 2014 so no more cuts in wage or numbers ...so thats 2.5 years away so with these ongoing increments will cost another 1.5 billion according to Mr Noonan..So in effect you have saved what a billion? and you have not even factored in what it costs to put these so called natural wasters on thier pensions...

Did you actually read my post? I pointed out several reasons to expect a further reduction in the pay and pensions bill for 2011.

You also pointed to Mr. Noonan saying the increments cost a quarter of a billion a year, yet you suggest that they will cost 1.5 billion to 2014? Over 2.5 years shouldn't that be 675m? You and Mr. Noonan are forgetting a few things - as more people reach the top of the scale, less will get increments and any new people are on new scales of 10% below everyone else so their lower salary will more than outweigh the increments they will be getting. You are also forgetting that the planned reductions in pension tax relief will greatly increase the revenue from the pension levy, that will more than cover the costs of the increments. Also anyoone who retires from February 2012 will do so on a much reduced pension. As the older higher cost pensioners die, they will be replaced by lower cost pensioners reducing the relative cost of each public service pensioner. All of the above is without counting the public service moratorium which will reduce numbers and cost as well.

So to sum up, you can point to increments as a pressure point for increasing public service pay while I can point out its limitations and a whole host of other reasons why public service pay is going to come down.

And finally, remember that Mr. Noonan is a politician, not a statistician or an economist.

ParkRunner · 28-07-2011 11:50AM

fliball123 wrote: »

Once again where have they gone...They have not been sacked they are being fecked off onto their pension..has anyone got figures for the PS pesion payments over the last number of years?

Can you not find them yourself? Who knows where they are gone. I imagine doing something productive

Godge · 28-07-2011 11:53AM

Godge wrote: »

So given the figures I have provided of a cut between pay and pension levy of 2.301 bn in the net public service pay bill, will you agree that the public service pay bill has been the main contributer to the reduction in the deficit?

fliball123 wrote: »

No I wont where have these people gone are we not picking up the tab for thier pensions?

Sorry I should have made it clear that the 2.301 bn referred to a cut in the net pay and pensions bill as my earlier more detailed post made clear. The cut of 2.301 bn includes the cost of the pensions so your argument once again does not stand up.

DJCR · 28-07-2011 11:54AM

How are they going to do all this without cutting social welfare and raising taxes................... Budget day is going to be full of surprises.

Cookie_Monster · 28-07-2011 12:01PM

DJCR wrote: »

How are they going to do all this without cutting social welfare and raising taxes................... Budget day is going to be full of surprises.

direct taxes are not being raised, ie PAYE. Everything else will get bumped up though

InigoMontoya · 28-07-2011 12:04PM

fliball123 wrote: »

True and thats what I have said I am not saying for one minute that there will or should be no more tax hikes or cuts for the welfare but why is it fair to leave a large proportion of what we pay out in ps wage untouched infact it is rising by 1/4 of a billion a year?

You should probably be arguing with someone else. There's only so many times I can say that I don't oppose suspending increments.

Rabidlamb wrote: »

Would the PS stop spouting this levy or USC as a reason for sympathy.
Everyone pays it, you're not special.
Also, you now make a pension contribution on average 7%, I pay 6% which is matched by my employer & I still won't finish on half my salary when retirement comes.
So it could be argued we're quits but no, I had a pay cut of 25% in 2008 that has still not been reinstated.

You are not thieving scum, your unions however ?????

I haven't asked for any sympathy or "special" status.

I merely posted here to point out that the assumption* that every one who comes under the public sector umbrella is in some very protected situation is mistaken. I don't like to see terms like "thieving scum" being bandied about indiscriminately.

*For example, I'm not in any union.

Rabidlamb · 28-07-2011 12:17PM

Rabidlamb wrote: »

Would the PS stop spouting this levy or USC as a reason for sympathy.
Everyone pays it, you're not special.
Also, you now make a pension contribution on average 7%, I pay 6% which is matched by my employer & I still won't finish on half my salary when retirement comes.
So it could be argued we're quits but no, I had a pay cut of 25% in 2008 that has still not been reinstated.

You are not thieving scum, your unions however ?????

Shatner wrote: »

You don't know what you are talking about. The PS pension levy is a separate levy to the Health/Income levies that are now the USC.

It is an extra payment.

Your confusion is down to the use of terms.
You call your pension contribution a levy, I call mine what it is, a pension contribution.
So we both pay one, mine is 6% yours is around 7%.
We are also liable for the USC, so no difference there.
I however have had a pay cut of 25% on top of all of that, you have not.

PS workers seem to think they've been hard done buy in some way, no, you've been the most protected class of worker in this country.

sollar · 28-07-2011 12:17PM

fliball123 wrote: »

How is it fair that a person who has bought a house paid 30/40k in stamp duty then they lose a % of their wage aswell as some of thier hours the house they bought is not worth half of what they owe and they want to tax that...yeah thats so fair isnt it...Sure give yourself another increment there good kid

I don't know what your point is here. I have a mortgage too and will have to pay that tax. The very same as private sector.

I'm not a kid i'm in my 30's BTW.

sollar · 28-07-2011 12:19PM

Liam Byrne wrote: »

Is there a credible source for that ? Lenihan would - and did - say anything, regardless of whether it was true.

And was he talking percentages or actual amounts ?

He said it on Newsnight with Jeremy Paxman.

sollar · 28-07-2011 12:21PM

fliball123 wrote: »

So you have learned how to embold a sentence...it doesnt matter who is getting it..It should be stopped when everything else is being cut and taxed why is this proportion of our spend increasing...we are still 18billion in the hole?

Ah so now you know more than Noonan.... oh how the tides turn

kippy · 28-07-2011 12:27PM

fliball123 wrote: »

No but within the grades annual increments are ongoing costing accoring to Minister Noonan 1/4 of a billion a year...So we started the austerity what 4 years ago so the wage has crept back up by about a billion...So say your a grade 5 and your salary is set between 60 and 70k..Anyone on say 60k will continue to get their annual increments until they reach their ceiling

Dont turn it in to a PS bashing thread but thats part of the reason on top of tax in this country reaching and surpassing the point of diminishing return..For tax payers the statement blood from a stone is possible the most apt. Also add in the increase of people joining the dole queue 300k

Right,
People blaming increments for the fact that the defict hasn't been reduced are taking one thing in isolation and "forgetting" about the rest.

1. The numbers in the public service have reduced over the last 4 years due to mainly retirements and while the cost of these pensions still have to be covered there would have been a net saving at this point as a result of these retirements/early retirements.
2. Increments don't go on forever, there is a ceiling that can be reached after which point thats it, move roles (which is no longer an option for a large section of the service as the moratorium also cover this area)
3. There have been very few if any new entrants to the public service in the intervening timeframe and any new entrants have started out on 10% less, with a lesser pension scheme.

Now, that doesn't hide that fact that increments should have been frozen on day 1 until some form of performance based pay system was introduced, or that another 5-10% wages and/or 25000-30000 heads need to be reduced in the sector but lets not start spreading nonsense about why the deficit has not been reduced.

I wont get into the other reasons the deficit hasn't been reduced but its pretty obvious to see that the next 5 years are gonna be tougher than the last - with everyone, including public servants getting hit.

waffleman · 28-07-2011 12:33PM

sollar wrote: »

He said it on Newsnight with Jeremy Paxman.

Any chance you could answer the post?

sollar wrote: »

Ah so now you know more than Noonan.... oh how the tides turn

Or even this one?

It was obvious Lenihan was lying the whole way - talking up the economy and bluffing about everything - to a certain extent that is part of the job but in Ireland it gets taken to a whole new level of deception. What makes you think Noonan is any different?

kippy · 28-07-2011 12:38PM

Rabidlamb wrote: »

Your confusion is down to the use of terms.
You call your pension contribution a levy, I call mine what it is, a pension contribution.
So we both pay one, mine is 6% yours is around 7%.
We are also liable for the USC, so no difference there.
I however have had a pay cut of 25% on top of all of that, you have not.

PS workers seem to think they've been hard done buy in some way, no, you've been the most protected class of worker in this country.

Ok,
The pension contibutions, including the levy actually works out at between 10 and 13.5% in most cases (employee side of it). And that doesnt include the portion of PRSI that everyone pays, that goes towards the COAP (which is counted as part of the public employees final pension.
Final actual pension is made up of 40/80 of finishing salary but this figure isnt in addition to the COAP, the COAP is part of it.
Now, don't get me wrong, current staff in the public sector still have a very good pension scheme but one that is changing in major ways for new entrants.

Godge · 28-07-2011 12:39PM

Rabidlamb wrote: »

Your confusion is down to the use of terms.
You call your pension contribution a levy, I call mine what it is, a pension contribution.
So we both pay one, mine is 6% yours is around 7%.
We are also liable for the USC, so no difference there.
I however have had a pay cut of 25% on top of all of that, you have not.

PS workers seem to think they've been hard done buy in some way, no, you've been the most protected class of worker in this country.

Sorry but the pension levy is 7%, the pension contribution is 6.5%, a total of 13.5% being paid by public servants towards their pensions. The pension contribution of 6.5% was always there, the pension levy was introduced in 2009 because a pay cut was not politically possible at the time. By January 2010, the pay cut was politically possible and was also introduced.

And, unlike your contribution, there is no guarantee that the money is going into a fund to pay for their pensions.

As for your pay cut of 25%, you are in a small minority of employees in the private sector that have seen such cuts. Employees in the phramaceutical, IT and banking sectors have largely been protected from the pay cuts and in a lot of cases have been getting pay increases (quietly though). So as an average, the combined pay cut/pension levy hit of around 14% that public servants have taken is probably at least in line if not more than the hit the average private sector employee has taken.

skelliser · 28-07-2011 12:47PM

There are now 3 distinct groups in Ireland now.

1) The ~300k job protected PS

2) The private sector

3) The 450k on the dole.

The battle lines are drawn. We are 4 years into this mess and little has been done to address expenditure. The croke park agreement is a farce.
The vested interests, Labour, the unions, isme and ibec have set there stalls out.
Watch who is going to get attacked. So far its the poor unfortunate "working poor" and those on the dole.

Republic my arse!!

Why has the €20 Billion deficit not reduced ?.

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