IMF want welfare payments cut, minimum wage slashed

Harsh measures to deal with Irish crisis

CATHY HAYES,

IrishCentral.com Staff Writer

Published Monday, November 29, 2010, 1:41 PM

Updated Monday, November 29, 2010, 1:41 PM

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Ajai Chopra, Deputy Director of the European Department of the IMF

Photo by AP

The International Monetary Fund (IMF) has recommended the gradual reduction of social welfare payments and a drop in minimum wage in an IMF staff position note approved by it's lead negotiator in Ireland.

The paper recommends a “gradual decrease of benefits over time of unemployment and stricter job search requirements”.

The have also called for additional resources to be given to Fas, the national training body. The document states that it was been approved by Ajai Chopra , its head of mission in Ireland, who also maintains the position of the IMF's deputy director in Europe.

The paper has advised a review of Ireland's minimum wage “to make it consistent with the general fall in wages”. This measure will be included of the four-year austerity plan which is due to be published tomorrow.

With regard to attracting women into the labor force it suggests changes and better child care. It highlights that “cutting labor income taxes paid by women by 5 percentage points” would increase GDP by 1.75 percentage points.

The Governments four year plan will outline measures to drive down costs in business in order to increase competitiveness according to Alan Ahearne, the Government's economic adviser.

He said the plan includes proposed reductions in costs associated with electricity, waste disposal, broadband and professional services such as legal fees.

The IMF and the EU will have the ultimate power of approval over tomorrow's four-year plan and the December 7th Budget.

Despite this, the current Government remains confident that they can implement the measures proposed in the upcoming budget.

“I am quite satisfied on the basis of the discussions to date that the budget that will be presented to Dáil Éireann on December 7th will be our own budget, nobody else’s budget. There has been no request for any change on that,” Mr Lenihan said.

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corneilius | Dec 08, 2010, 12:37 PM EST

George Dillion, your comment is ill-informed. Scapegoating the poor or immigrants is typical of the socio-payhic mind set. If there is fraud in the benefits system, it is miniscule in comparison with the fraudulence of Irish Governance and Irish Banking. The Irish banks AIB, BOI and Anglo Irish, borrowed 500 billion from the ECB and others, and used that money to gamble on the International Derivatives Market and on corrupt land development schemes. The Irish Government could guarantee their High Street Deposit customers, and that would cost 20 Billion Euros.... and let those banks fail.... let them pay the price of their own actions.... face the consquences of their gambling (for which the Irish bankers paid themselves a handsome 'comission'....) And let me assure you, that AIB were caught red-handed STEALING cash from high street customers accounts over a 30 year period. They are rotten to the core, and it's rude and disengenious to scapegoat those at the 'bottom' of Society as a way to protect the Powerful... the same people who protected the Vatican from civil litigation and criminal prosecution are protecting the Irish banking sector and abusing the victims.

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GeorgeDillon | Nov 24, 2010, 02:31 PM EST

Further to my note below, I read today that the Irish government believes it can cut down 5000 million euros in welfare fraud by adopting prudent measures to monitor thieves and fraudsters, native and foreign. Isn't it amazing that this is only occurring to them now? Why don't they inform the EU that the Irish taxpayer can no longer pay child benefit for children in Latvia, Estonia, Poland etc., many of whom have NEVER been in Ireland? And of course that assumes that these children exist, and that Pavel is not just screwing the Irish welfare system by claiming to have 14 children back in the old country. "How many was that, Pavel? Fourteen? Oh fine, here's your check for two thousand euros. Have a good flight home, we'll see you again next month. Say hello to the kids for us!"

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maloney | Nov 23, 2010, 05:44 PM EST

Your hand outstretched asking for more money please, has consequences.

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GeorgeDillon | Nov 23, 2010, 12:53 PM EST

If you lower minimum wage you have to lower welfare, otherwise you diminish the incentive to work. In a normal society I would be 100% against lowering welfare or minimum wage, but in the Irish case a lot of the welfare is going to welfare frauds from Africa, Poland etc. The money is in many cases not going to help Irish workers who have lost their jobs, it's going to pay parasites from Poland, who often don't even live in Ireland but fly in once a month to collect their welfare and then fly back to Poland. For many months I have been posting that Ireland is the most misgoverned country in the world, equalling or surpassing Zimbabwe. The events of recent days show I was 100% correct.

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Towngate | Nov 23, 2010, 09:33 AM EST

You mean to tell me the Government has an Economic Adviser?! God help us! What's he been doing?! "It will be OUR OWN budget!" he says. DO THEY STILL NOT "GET IT?"

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