INO's contribution to the country!

[sidzer]

Is Liam Doran expressing the true wishes of the members of the INO regarding pay cuts?

My experience as a public sector worker is that most of my colleagues would be prepared to take a pay cut to try to sustain and create jobs to help 'rescue' the economy.

Surely unions want to help sustain jobs and possibly create new employment. If we were to apply bench-marking now we would have to empty our pockets and hand some of the money back.

S

 

[Purple]

If I expressed my opinion of Liam Doran I would be banned (an opinion I have held for many years).
Suffice to say that Ian Paisley probably has a higher opinion of the Pope than I do of Mr. Doran.

 

[Gordanus]

My experience as a public sector worker is that most of my colleagues would be prepared to take a pay cut to try to sustain and create jobs to help 'rescue' the economy.

As a TD said on the radio when asked if he'd volunteer for a pay cut said: "Only if I believed that the money was going to be used sensibly"

Given the use we've got from the tax take in the boom years, I won't be holding my breath - and neither will I be agreeable to a pay cut. Not getting increments I'll negotiate on, but if my pay goes down and prices stay where they are I'll be posting in the Dire Straits forum.....

 

[VOR]

If I expressed my opinion of Liam Doran I would be banned (an opinion I have held for many years).
Suffice to say that Ian Paisley probably has a higher opinion of the Pope than I do of Mr. Doran.

My sentiments exactly Purple.

Is Liam Doran expressing the true wishes of the members of the INO regarding pay cuts?

My experience as a public sector worker is that most of my colleagues would be prepared to take a pay cut to try to sustain and create jobs to help 'rescue' the economy.

Surely unions want to help sustain jobs and possibly create new employment. If we were to apply bench-marking now we would have to empty our pockets and hand some of the money back.

S

The unions don't want to create jobs. They want more and more and more for union members who are working. That way the subs go up. They prefer 2 workers working 40 hours plus 20 hours overtime than 3 workers doing 40 hours each.

 

[Dreamerb]

The unions don't want to create jobs. They want more and more and more for union members who are working. That way the subs go up. They prefer 2 workers working 40 hours plus 20 hours overtime than 3 workers doing 40 hours each.

Far as I know, union subs are calculated on members' basic pay so this should not be the case. Yes, they'll want members' basic pay to increase, but I don't think they have a direct economic incentive to maintain high levels of overtime among the membership.

If it is done that way, it is my opinion that it is wrong and gives the wrong incentive.

Any union members here who regularly do overtime and can confirm who's correct on this?

 

[Shawady]

Far as I know, union subs are calculated on members' basic pay so this should not be the case. Yes, they'll want members' basic pay to increase, but I don't think they have a direct economic incentive to maintain high levels of overtime among the membership.

If it is done that way, it is my opinion that it is wrong and gives the wrong incentive.

Any union members here who regularly do overtime and can confirm who's correct on this?

I don't do overtime but our union's fees are calculated as a percentage of our weekly gross pay and are capped at a certain amount for the year. If that amount is reached, for example in November, there will be no union fees taken from our salary for the rest of that year.

 

[boris]

For the civil service Overtime does not have an effect on subs, only basic pay is used when calculating.

 

[Complainer]

The unions don't want to create jobs. They want more and more and more for union members who are working. That way the subs go up. They prefer 2 workers working 40 hours plus 20 hours overtime than 3 workers doing 40 hours each.

So they prefer to get two subs than three subs? How an earth did you deduce this?

 

[Dreamerb]

So they prefer to get two subs than three subs? How an earth did you deduce this?

By making it up from incorrect assumptions, I surmise.

 

[setanta1]

Would an across the board pay cut for public servants not engender (or exacerbate) deflationary pressures? It sounds like a quick fix (and kicking public servants' backsides is always good sport), but has anyone seen a proper cost/benefit analysis (taking the multiplier effect into acount) by an independent and reputable economist?

 

[Padraigb]

Would an across the board pay cut for public servants not engender (or exacerbate) deflationary pressures?

There is a need to pick a path through a minefield. As things are shaping up at the moment, the exchequer could be spending many thousands of millions more than it receives (opinions seem to range between 14bn and 19bn). You might say that is inflationary, and needs to be adjusted downwards. It needs to be adjusted downwards for other reasons too.

The tax take has fallen greatly, partly because of reduced economic activity, most notably in building and property-related activities. But the tax take is disproportionately down for further reasons
- people are spending less generally (thus VAT is down)
- property prices and the number of property transactions are both greatly down (thus stamp duty down)
- car sales are greatly down (thus VRT down, and also VAT).

What I am saying is that people are making choices, and the choices they make have the effect of reducing the tax take. It is more-or-less neutral if the government deals with that part of the shortfall by a combination of increasing tax and reducing expenditure.

 

[dewdrop]

Ithink anyone thinking of possible industrial action should recall what happened in England in 1978/79 after their "winter of discontent"

 

[Purple]

There is a need to pick a path through a minefield. As things are shaping up at the moment, the exchequer could be spending many thousands of millions more than it receives (opinions seem to range between 14bn and 19bn). You might say that is inflationary, and needs to be adjusted downwards. It needs to be adjusted downwards for other reasons too.

The tax take has fallen greatly, partly because of reduced economic activity, most notably in building and property-related activities. But the tax take is disproportionately down for further reasons
- people are spending less generally (thus VAT is down)
- property prices and the number of property transactions are both greatly down (thus stamp duty down)
- car sales are greatly down (thus VRT down, and also VAT).

What I am saying is that people are making choices, and the choices they make have the effect of reducing the tax take. It is more-or-less neutral if the government deals with that part of the shortfall by a combination of increasing tax and reducing expenditure.

Good post Padraig.
I’d add “VAT down” to property as well.
I can’t see where the government are going to get tax from next year. There are almost no cars being bought so VRT and VAT receipts from that source are effectively gone. There will be almost no capital gains so that’s out and there will be almost no houses built so no VAT on the building materials or stamp duty and VAT on the sale. Few if any of the companies in the IFSC will make any profits (ditto for the MNC’s based here) so no corporation tax. Add to that 100’000 to 200’000 fewer people paying income tax... where’s it going to come from?

 

[Shawady]

There is a need to pick a path through a minefield. As things are shaping up at the moment, the exchequer could be spending many thousands of millions more than it receives (opinions seem to range between 14bn and 19bn). You might say that is inflationary, and needs to be adjusted downwards. It needs to be adjusted downwards for other reasons too.

The tax take has fallen greatly, partly because of reduced economic activity, most notably in building and property-related activities. But the tax take is disproportionately down for further reasons
- people are spending less generally (thus VAT is down)
- property prices and the number of property transactions are both greatly down (thus stamp duty down)
- car sales are greatly down (thus VRT down, and also VAT).

What I am saying is that people are making choices, and the choices they make have the effect of reducing the tax take. It is more-or-less neutral if the government deals with that part of the shortfall by a combination of increasing tax and reducing expenditure.

PadraigB, Hate to say it but I aggree with your view.
A couple of years ago there was talk of removing VRT because of the common market in the EU, and the government said it was worth €800 million in tax revenue. Imagine what the figure will be for 2009.
I also was thinking over Christmas, that the budget had not even kicked in yet so when everyone is down a bit on their wages in 2009, this will have a knock on effect on the retail sector.
I do think the pay cut in public service wages will also have some knock effect in the short term, but accept the government has no other choice. That is why the INO's postion of not even entering talks is incredible

 

[Dreamerb]

where’s it going to come from?

Borrowing.

It will take years to readjust our tax base; while I am firmly of the belief that we need to raise higher proportions of our tax take from direct taxation, including income tax, this can't be done rapidly without exacerbating the economic shock and having more money and more employers take flight from the economy.

We also need to change our approach to property tax - the reliance on bumper stamp-duty yields, as opposed to current tax take, is part of what's got us here. I think the introduction of the second-property tax (even at a measly €200 p.a.) is a move in the right direction, and I suspect the longer term plan is to increase this steadily over a number of years.

We may well also see changes to the CGT / CAT regimes - but again, things like that have to be done quite slowly.

We need to take a strategic approach which will produce a more sustainable and predictable tax base; re-address the pension burden since we're busily wiping out the National Pension Reserve Fund; create structures which allow any future "boom" capital tax take to be split between debt management and infrastructural investment; focus more on education and training [we are not, and never have been, really one of the most highly educated workforces in Europe. We're not bad, but one of our biggest assets has been that we speak English]; do something about the financial and delivery nightmare that is the health service.

But we have a Government which is lurching from crisis to crisis - at least some of which are not, or at least not wholly, of its own making - and it is extraordinarily difficult to think and plan strategically for the medium to long term when things are critically urgent now. I just hope that Government is not panickily losing sight of those longer term issues.

In the meantime, I simply cannot see where the money can come from, other than borrowing. And hopefully achieving savings that can reduce the borrowing requirement [yes, including a likely pay-cut across at least some of the public sector and certainly including people at my income level], but without wiping out services and cutting all infrastructure plans.

 

[Padraigb]

...We need to take a strategic approach which will produce a more sustainable and predictable tax base...

Many of us shouting from the sidelines address one detail of our economic/fiscal mess at a time. But those charged with dealing with it should take a wider view: they should be strategists rather than tacticians.

It may be that I am not seeing things clearly, but I do not see a government strategy for dealing with our problems. I was very disappointed with Brian Lenihan's first budget because it seemed to me there was no sense of strategy.