Sunday Independent 26th September 2010
The numbers employed by the State are unsustainable and the onus is on them to step forward and step down, writes Eamonn Blaney
No doubt you are sick of listening to the radio, watching the television or reading newspapers and getting nothing but bad economic news.
Unfortunately, this is happening because our Government — and many of us — closed our eyes and ears to the reality of what was unfolding before the meltdown. The priority now is to resolve it the best we can and as quickly and as equitably as possible. To do so is going to require some major decisions, all of which will have substantial and far-reaching consequences for every one of us.
Finance Minister Brian Lenihan should immediately tell us what options he considered prior to the bank guarantee scheme and the implications of each. Not once, since this crisis began, have we been treated like adults and told exactly what options were considered. Instead, we were told the bank guarantee scheme is the only show in town, with no explanation whatsoever. Suspiciously, none of the other options (if any) have been discussed publicly by the Government. Regardless, in my humble opinion there are only three options available to us and all are painful.
Nevertheless, we are where we are and it is what we decide to do next that really matters. We must also realise that the solution will affect each and every one of us. Therefore, what I am going to suggest may upset quite a lot of people and if there was an alternative to doing so, I would be delighted.
The fact is that we are broke and no amount of fancy economic footwork, political sound bites or blatant lies is going to change that fact. Consequently, the three choices that face us are as follows.
The first choice is that we let the free market take its natural course and let the banks go under. This of course would mean all persons or institutions owed money by the banks and all depositors would take a substantial hit. In the short term there would be absolute chaos, until such time as the State set up a clearing bank to handle the day-to-day requirements of individuals and small businesses.
The second choice is the course of action which the Government has chosen, which is to continually borrow money (selling bonds) in the hope that the world economy may turn around, and as a result our economy would start to grow and prosper. This would in turn lead to increased tax revenues and higher exports. It is a very big hope on which to pin the entire future of our nation and the penalties for getting this wrong will be 20 years of economic slavery and economic destitution. In all probability it would also mean surrendering our financial sovereignty to either the European Central Bank or the International Monetary Fund, as we will not be able to pay our debts. This is the most likely scenario at present. The third and final solution is that we greatly reduce the cost of running our country. This will require massive increases in productivity and a substantial drop in the amount of money we spend compared to what we receive in revenues.
We all know that there are going to be further cuts in health, education and social welfare whether we like it or not. All of us have seen deterioration in these areas over the last couple of years, yet there is more to come. We are told, quite rightly, that there is simply no alternative because of the present economic situation and the lack of Government revenues.
Although very annoyed and disappointed, we are mature enough as a society to accept that this has to be the case. What we cannot accept however, is that there is one unique section of the Irish society who are being shown exceedingly preferential treatment in relation to the economic downturn. This section is the public service.
What I am about to suggest will undoubtedly upset the 460,000 people who work in the public service. No public representative has dared to say what the rest of us all know. Simply put, we cannot afford to employ the present numbers any longer. The days of a job for life are over for all of us and everybody needs to accept this, especially the public servants. The days of the defined benefit pension are also over. Regardless of what agreements were entered into with the unions, cuts in public service salaries must be implemented.
They should have been implemented over 10 years ago but the biggest coward of them all, Bertie Ahern, didn’t have the balls to do it. He was too busy spending our money buying public service votes with benchmarking and so ensuring his “historic third term” in office. Easy to do it when you use someone else’s money (ie yours).
I wish things were different and we had more options open to us but unfortunately, due to the total ineptitude of this Government, we do not. Those in the public service need to take a long look at their obligations to the country and the people who pay their salaries and start making some tough decisions. It is not a judgement on the effectiveness or dedication of the public servants. Rather, it is simply a statement of the inescapable truth — we cannot afford to pay 460,000 people to run our country.
The scale of the cuts that must be implemented in the public service are massive — in the region of €5bn — and this would mean 100,000 redundancies. Sorry, but there is absolutely no way around this. Either we do it ourselves or wait for another year or so and let the International Monetary Fund do it, without any consideration for the welfare of those who lose their jobs. The IMF doesn’t do subtle.
Considering 453,000 of us are on the dole it is time for public servants to recognise that they do not have a birthright to the job they now hold. We are your employers and we have no money to pay you. Ireland has changed forever and the rules that used to apply cannot do so any more. We as a nation have effectively sold our souls to the devil in the form of the money lenders from abroad and we must now pay the price. That means all of us, no exceptions.
There must be redundancies, and I suggest that the Government offers the first 50,000 public servants who voluntarily resign now the opportunity to be the first in line when the public service starts to take people on again when things get better. Those who cannot, or will not, make this effort on behalf of the country which pays their wages, should be excluded from consideration as employees in the future. The selection of the remaining 50,000 who must be let go should be modelled on exactly the same system used in the private sector ie assessment of their suitability for the position. This should be carried out over the next year, at most. It would be a hard choice to make if you worked in the public sector. But at least you would get a choice, whereas the unemployed never did.
I know it is a difficult pill to swallow but if we do not take tough medicine now, the patient will not survive. If there are any “doctors” in the public service unions who could assist with the prognosis and know of a less painful but equally effective treatment, I would love to hear from them.