Ireland Calling by John Spain
Irish State car slipup shows double standards in government
Posted on Wednesday, November 03, 2010 at 06:36 AM
- "Greed is good", especially in Ireland it seems with pillars of society on the take
- Vintage pamphlets offer a glimpse at the rules of 50s-era Irish Catholicism
- A leap of faith by Ireland, the exit from the IMF/EU bailout
- A temporary detour from ecomic issues to Irish soccer madness
- Give Britain a break after decades of Irish emigration to the UK
Last week here we had a perfect example of this. The government was having an all day meeting to decide on the four-year program of draconian cutbacks that have to be implemented.
These cuts are going to mean a severe drop in the standard of living for everyone here. There will be heavy cuts in spending on all state services, even education and health, welfare, pensions and so on.
Given the size of the deficit, everyone knows that cutbacks on a scale we have never seen before are on the way, starting with the budget in a few weeks. And people know there will be no escape for anyone, with even those on low incomes and welfare being hit.
There’s a lot of anger around at the moment because of that. And a lot of that anger comes from the perception that the upper level of Irish society, many of whom were involved in the boom and bust that brought us to our knees, still seem to be living lives of luxury and privilege.
This perception was summed up perfectly last week as all the ministers in the government gathered together for the decisive meeting about the cutbacks in state spending.
The critical meeting began on Monday evening and continued all day Tuesday, and it was held away from the Dail (Parliament), at Farmleigh House in the Phoenix Park. Farmleigh is a stately home donated by the Guinness family to the country, which is now used as a base for visiting heads of state or for special government think-ins.
The ministers arrived on Monday evening, sweeping up to the historic house in a procession of big limos, past the shivering media camped outside. It was like something from one of the Godfather movies, or a meeting of the politburo in the good old days back in the USSR.
In retrospect, it’s unbelievable no one in the government had the smarts to see that this was deeply incongruous. They were there, after all, to work out a program of savage cutbacks that will affect the lives of people all over the country.
Yet they were arriving in their top of the line ministerial limos, chauffeured by their ministerial drivers. And the meeting was being held in surroundings more luxurious and grand than a five-star hotel.
It was an image that perfectly reflected what so many people think is wrong here. One way for the wealthy and powerful, and a much tougher way for ordinary people. The fact that the ministers involved did not see anything wrong simply proves the point.
That image of the chasm between the lives of ordinary people struggling to keep their homes and pay their bills and the ruling class and upper crust of Irish society caused uproar here last week, with outraged people ringing the radio shows to vent their fury.
The limo procession was one of those unforeseen “little things” that Albert Reynolds used to talk about, something that had crystallized the problem in the minds of so many people.
It’s not just the cost of the ministerial limos and their Garda (police) drivers which, at around 11million euro a year, is a drop in the ocean of the billions in cutbacks we have to make. It’s the attitude of entitlement it represents that sickens ordinary people here.
It’s not just the politicians, of course. There’s a whole layer at the top of Irish society which operates on the presumption that its members are above all the economic trouble we are in. Their sense of their own importance insulates them from the little people below who have to struggle to make ends meet.
One thing that a lot of them have in common is that they are paid by the state. They are the politicians, the senior civil servants, the advisors, the professionals, the lawyers and so on.
And it’s not just their big paychecks and expenses. It’s the way that everything they need for their job -- transport, meals, accommodation and whatever facilities they want -- all seem to be provided, and always seem to be five star.
The elite layer also includes senior executives of many of our semi-state companies. An example is the Electricity Supply Board, the national power company, where the chief executive is paid around half a million a year, even though we have the most expensive electricity in Europe.
Also in the layer at the top are the chief executives of many private companies that are still getting the hugely inflated salaries they awarded themselves in the boom years. And that even includes senior executives in the banks!
The layer includes a vast army of professionals who provide advice and services for the state, the law firms, accountancy companies, financial advisors and so on. Their fees are hundreds of euro an hour per individual, plus all kinds of extras, resulting in a bill for millions for a job (like producing a report on the viability of a bank) that may last a few months.
There is an attitude among these people that is somewhere between thoughtless and downright greedy. Most of them don’t care. Why should they? Why should they economize? The state is paying.
That’s why the “little thing” of the state limos matters. It’s indicative of a much wider problem we have.
It’s evidence of a level of thoughtless excess that is still being indulged in by so many at the top of Irish society, even at a time when the whole country is being told that a severe cutback in living standards is on the way.
The new prime minister in Britain, David Cameron, has already told his ministers who live in London that they must car pool and use public transport like everyone else. And it’s way past time that the same thing was done here.
That should include the former taoisigh (prime ministers) who are allowed to keep their state cars and drivers for life (!) on security grounds. That may have made some sense during the Troubles in the North, but these days it’s ridiculous.
Again, these changes would not make much difference to the overall deficit problem we face, but it would set an example for the rest of the population as they are hit by the cutbacks.
What this government needs to do is first of all to cut its own pay rates in half. Then it needs to call in all its senior civil servants and advisors and professional associates and tell them that a new maximum salary of €100,000 a year is being imposed on EVERYONE until we are through this crisis. Likewise for all the senior executives in the semi-state organizations, rescued banks, utility companies and so on.
The government then needs to do research across the private sector to find out how much companies and businesses have cut pay and pensions over the last few years, and then apply those same reductions to everyone on the state payroll here.
In particular, the issue of pensions for former state employees has to be faced. They are now costing us several billion a year. They are paid by the state out of current taxation or borrowing and so have been unaffected by the collapse in the markets which has decimated private sector pension funds.
The early retirement age and the level of pensions for state workers also need revisiting. In some cases state workers get pensions of 70% of their final salary, and the pensions are index-linked.
No one blames the state workers involved for getting the best deal possible. But in a climate of cutbacks where the majority of people in private pension funds have seen their pensions collapse by 50%, this is neither equitable nor sustainable. We just can’t afford this anymore.
The public sector unions (state workers) are already preparing to fight this kind of reform, and we will be hearing a lot in the coming months about the plight of low paid state workers. And it is true that many state workers are among the low paid (although they do have job security).
But it is also true that in the ranks above them there is a very large number of very well paid state workers who have felt no pain during the current economic crisis. Now is the time for them to make a major contribution.
Another thing the government needs to do is to call in the Bar Council, the Medical Council and all the other professional bodies and tell them that the €100,000 a year maximum is to apply to their earnings as well and that they are to cut their fees to a level that will achieve this. Again, this would result in major cost savings both for the state and individuals.
Changes like this would make a big difference to the crunch we now face. They would make a big difference because ordinary people would feel that everyone was being hit by the need to cut back.
If the excess in the elite level of our society is stopped and the feathered position of a large part of our state sector is brought into line with the harsh reality that everyone else faces, then major savings can be achieved.
The cuts that have to be applied across the general population will then be much lower and less painful. Not only that, but we will all be facing the hard times together and on an equal basis.
In a nutshell, no more limos.