Lenihan: No more pay cuts for public sector

breakingnews.ie/ireland/leni … 76559.html

Quick, we have no votes left in Dublin, shore some up. Make sure you protect the big guys who are most likely to get their pensions cut in any sane society. Even if you have to put an “Out of Order” sticker on one of the policy levers available to you. Here’s the cardboard box minister, just climb into it and we’ll gaffer tape down the lid.

WTF? Is he planning on hyperinflation tackling the problem for him? Or the IMF or something?

forgot that bit also…
i don’t see how they can save money by not reducing cost.
the value of the “efficiencies” has to be realised in order for them to be useful.

the benefit in efficiencies, long term, is the need to not increase staff levels and, short term, it is meant to give the option to cut staff levels.
we, generally, don’t need efficiencies to cut salaries.

no offence meant to the public sector, but you have to realise it is (in general) not a revenue generating or export led business, so working harder doesnt really bring in more money.
we can certainly reduce waiting lists and backlogs etc along with adding useful civic services coughproperty price databasecough but we wont reduce the deficit.

also, since they arent cutting the dole or other social crutches can we simply expect taxing the rest of our wages and savings to be the economic miracle we have been waiting for

nope, “we are padding our own canoe”

Understand the balance sheet, to get a lift in revenue (taxes), you have to keep the spend up or level (wages).

Raising taxes on PAYE workers will give the Government more income, it’s a closed circuit.

Last budget was about cutting public sector pay, In Lenihan’s “plan” this one was always going to be about raising taxes (which will catch the PS as well).

Most likely he is not going to be in power by late 2011 so someone else will have to tackle that issue and bear the brunt.

Nice malapropism there. Padding our own canoe indeed although it’s not much use as we’re already halfway below the water line. We need some more bubbles/balloons to keep us afloat. Heaven forbid we should actually jettison something.

canoe is sinking
canoe is full of bricks

“i will not throw any bricks out of the canoe” sez 1st officer lendahand

“i agree, bricks provide stability” sez captain clowen “in fact i’d be putting more bricks into this canoe if i could fit any more in”

Anyone listening to Newstalk? Gerald Flynn of some business solutions crowd or other on there saying there is a “side letter” to the agreement whereby staff earning €X per week for shift work or Saturday/Sunday premiums would be compensated for moving to a Mon - Friday week by having the €X paid in advance as a lump sum for possibly nine months! Its not in the agreement itself so no use looking for it.

Skipper, skipper! We’re taking on water! We’re puddling our canoe!
Well keep puddling, man, we must be close to the bottom now!

A side deal? :sick:

Wow. Why not triple current PS wage levels so? The government will be swimming in tax revenue.

I think the point is that a euro in cuts to PS pay doesn’t yield a euro in savings (because of tax foregone, spending not carried out and multiplier effects from the latter). Whereas a euro in raised tax does yield, more or less, a euro.

The only problem with that though is that raising tax also dampens the desire to earn more, which places a brake on investment/business start-ups/over-time etc.

Whereas cutting public sector salaries, etc., while having an immediate negative impact on the state’s income, in the long term does not impact on the drive for personal profit that is the engine of private business.

Plus, on top of everything else, in a debate with Marie Sherlock of Siptu there on newstalk last week, Moore McDowell claimed only 20% of the state’s revenue comes from income tax - so an increase will not lead to a major source of new funding.

With a gap of €18 bn between spending and income, we can only close the gap through cuts.

Not fair, not just, but necessary.

This is often repeated (and usually as the only argument for why income taxes shouldn’t be raised) but I see no evidence that this is the case. People don’t suddenly stop being acquisitive because the government is going to take a larger share of each additional euro.

Uh, isn’t that a reason for increasing revenue from income tax to something like European levels?

If you believe that, I’m afraid you’ve been sold a bill of goods. There is no combination of tax increases and spending cuts that closes that gap. It’s not possible and the bond markets are gradually realising that. People here like to imagine that bond investors don’t know what a deflationary spiral looks like and that, if we just keep cutting, maybe we can fool them and they won’t notice the effect it’s having on our GNP. It doesn’t work like that.

OK, if you want to hand over more of your earnings to the government, for crap services, after taking all the risks in setting up a company, taking all the risks that this entaila, while top “public servants” in the quangos and semi-states still earn ridiculous salaries, go ahead.

I won’t. I’ll go abroad.

You’re dead right - let’s double income tax! But that still only brings in 40% of what we need. Think about that - double income tax and we still are not half-way to where we need to be.

So how does it work? Please explain to me what will get us out of this mess.

Tax the “rich”? Then define “rich”.

I don’t think cuts are fair - but they have to happen.

And you know what - they will happen

Are you serious? Ask anyone who was a paye earner in the 80’s about how “acquisitive” they when 70p on the pound of every extra hour pay was deducted at source… your talking nonsense. I know people who were in that position and the motivation to work just wasn’t there. Plus you will inflate the black market.

Only problem is half of the workforce is in some form or other of the public sector and no incentives there Ted or likely to be for the foreseeable future.

And sure the self declared income cats know how to keep their saucer of milk refreshed if they can generate the cash in the first place.

We’re in a solid state machine for the PAYE worker however and despite spudnick’s obvious difficulty with the calibration, the game is about squeezing the pips to pay off other improbable calculations, mainly to make a year’s worth of interest payments, I should imagine.

But even for PAYE workers, raising tax dampens economic activity.

You won’t go for a bonus, you won’t work your ass off for promotion etc.

But you’re right - the PAYE workers (of whom I am one) will get screwed.