AIB Staff to receive 3% pay increase?

[Sunny]

One way or the other, the taxpayers have had to bail out the banks. When the HSE staff looked for a pay rise recently there was huge disapproval (and rightly so) on these boards about people 'not living in the real world'. Yet, when bank staff look for a pay rise it's suddenly okay.

I don't think anyone is saying its ok. It looks bad. The point is that the bank tried not paying it and actually looked for a pay cut but the LC told them to pay it. Also it only only benefits around 30% of AIB staff. They can ignore the LC but that risks bringing the entire industrial relations system in this Country to its knees.

As I said before, blame social partnership for this sort of crap.

 

[Sunny]

based on that figure, then the rises would cost AIB somewhere in the reason of €13m. Were AIB not to pay them, then it is reasonable to assume that this is €13m that the Irish govt would not have to use to fund AIB, and that it would be €13m less in cuts that would not be required in the December budget.

No it wouldn't because the cuts in December has nothing to do with the banks. There is still a deficit of €20-€22 billion.

 

[Chris]

No it wouldn't because the cuts in December has nothing to do with the banks. There is still a deficit of €20-€22 billion.

Not really true in the bigger picture. If the government hadn't pumped €10 billion into Anglo, AIB and BoI it would now need to borrow €10 billion less, This would mean paying less interest in the future, which would mean paying less taxes in the future to service the loans.
Just because the extra taxes are not going immediately/directly into the banks doesn't mean that our taxes will not be paying for the bailout. No matter which way it is put, the taxpayer is and will be paying for the bailout.

 

[nlgbbbblth]

The LRC approved the 3% increase. Independent assessment. If you start to overrule their decisions then it's a dangerous precedent to set.
It's what they were entitled to in 2008 but the bank refused to pay it.

The staff getting it are "below manager level" which means they're not that well paid and are taking the brunt of public abuse (and believe me, there's lots of ill-informed people giving counter staff a hard time) for the reckless policies of senior management in the bank.

 

[dewdrop]

Why are people not critisising the Labour Court for confirming this award rather than blaming AIB in error.?

 

[Mpsox]

No it wouldn't because the cuts in December has nothing to do with the banks. There is still a deficit of €20-€22 billion.

So basically you are saying that the Govt can borrow money to pump into the banks and it has no impact on the budget deficit. Rubbish !!!

 

[Shawady]

When did the Labour Court make this decision?

I don't believe that if AIB refused to pay it , it would cause havoc with the whole industrial relations issue given the unprecidented situation the banks are in. I think it would be quite appropriate for AIB to refuse to pay it on moral grounds that they are getting a huge amount of taxpayers money to help their business. If the staff strike for it , they will get no support.
Why does anyone need a pay increase when we have deflation? Isn't that the arguement that is being put forward to cut socail welfare?

 

[Statler]

So basically you are saying that the Govt can borrow money to pump into the banks and it has no impact on the budget deficit. Rubbish !!!

Help me out here, roughly how much of the 20-22bn deficit is attributable to the banks?

 

[TarfHead]

It might be more accurate to say that the 20 to 22bn gap (between revenue and expenditure) exists before to costs of NAMA have to be paid.

Blaming NAMA for the need to raise revenue and cut expenditure is the wrong target.

 

[Statler]

Spot on.

It just bugs me to see the bank bailout being dragged into the debate on the current budget deficit, it clouds the issue and takes the focus off what needs to be done and why. People are rightly angry at what went on at the banks, but expenditure would need to be cut and taxes would need to be increased regardless.

 

[Chris]

Spot on.

It just bugs me to see the bank bailout being dragged into the debate on the current budget deficit, it clouds the issue and takes the focus off what needs to be done and why. People are rightly angry at what went on at the banks, but expenditure would need to be cut and taxes would need to be increased regardless.

But this is blatantly ignoring the fact that if €10 billion hadn't been pumped into the banks we would be able to divert that €10 billion to plug the budget deficit. Bottom line is that every penny that is borrowed or taxed will come out of the the tax payers pocket, whether in the last budget, the next budget or the next ten budgets.
While expenditure cuts, tax and borrowing increases would still be needed, the extent of these would not be as high as they have to be now.

 

[TarfHead]

But this is blatantly ignoring the fact that if €10 billion hadn't been pumped into the banks we would be able to divert that €10 billion to plug the budget deficit.

We're already borrowing to cover the deficit - 20bn, or 400m per week.

Bottom line is that every penny that is borrowed or taxed will come out of the the tax payers pocket.

Agreed.

I haven't seen the figure for the cost of NAMA, in how it increases Government annual expenditure, i.e. interest on sum borrowed to fund NAMA. But that is, not yet, nothing to do with the 20bn that has to be closed down, starting with the December budget.
"This cow is small, that cow is far away"

 

[Statler]

But this is blatantly ignoring the fact that if €10 billion hadn't been pumped into the banks we would be able to divert that €10 billion to plug the budget deficit. Bottom line is that every penny that is borrowed or taxed will come out of the the tax payers pocket, whether in the last budget, the next budget or the next ten budgets.
While expenditure cuts, tax and borrowing increases would still be needed, the extent of these would not be as high as they have to be now.

I go back to my previous question, what would the budget deficit be this year if there was no bailout for the banks? Are you saying that the deficit this year would be 10 billion if there had been no recapitalisation of the banks?

 

[TarfHead]

I go back to my previous question, what would the budget deficit be this year if there was no bailout for the banks? Are you saying that the deficit this year would be 10 billion if there had been no recapitalisation of the banks?

I'm assuming that the 20bn does not include the amount borrowed to fund NAMA as that amount would not be fully repaid in one year.

 

[S.L.F]

Boils my blood to hear public sector workers moan about the pension levy (you get it back!)

This is incorrect, they do not get it back.

It does not go into the pension fund, it is just a tax on working for the PS.

 

[Shawady]

Spot on.

It just bugs me to see the bank bailout being dragged into the debate on the current budget deficit, it clouds the issue and takes the focus off what needs to be done and why. People are rightly angry at what went on at the banks, but expenditure would need to be cut and taxes would need to be increased regardless.

Statler, I aggree that spending cuts and new taxes would be required regardless of the bank bailout but my own opinion is that if the government did not have to take money out of the national pension fund (7-10 billion I think) to give to the banks it could have used some of this money as a sort of stimulus package.
There are many people from the construction industry out of work and the government could have put together a plan to build or improve schools, hospitals or roads and been able to negoiate a competetive price.
I'm not suggesting this would solve all our problems but it could have given the government a bit more breathing space until things improve. As it is , it has no money to do something like this.

I think the pay increase is a seperate issue but I don't think it is justified that bank employees are getting an increase when the government is preaching that wages must come down in order for us to become competetive again.

 

[Statler]

Tarfhead,

No the 20bn does not include the NAMA amounts.
In relation to interest on NAMA debt, the business plan has some figures, make of them what you will:
[broken link removed]

 

[Statler]

Shawady,

Agree that building schools, hospitals, roads etc. would have been abundantly more beneficial than giving money to the banks if we did not have to, but my own personal opinion is that a stimulus package of this nature in that sort of amount would have provided limited breathing space. We would still be looking at a 20 billion deficit and we would still have to make hard, nasty choices. The bank bailout certainly did not help, but it is not the core problem.

Fully agree on the pay issue.

 

[Chris]

We're already borrowing to cover the deficit - 20bn, or 400m per week.
[/i]"

But you could "borrow" from the pension fund at no cost.

I go back to my previous question, what would the budget deficit be this year if there was no bailout for the banks? Are you saying that the deficit this year would be 10 billion if there had been no recapitalisation of the banks?

The deficit would still be €20 billion, but the total debt would be lower. The budget deficit on it's own does not paint the whole picture. The important thing is the total national debt which is higher because of the bank bailout and the budget deficit. Now you are going to hear arguments that the bank bailout has added "assets" to the governments balance sheet, but it still has to borrow €10 billion more than if it had diverted this money in order to not have to borrow less.
And because of the higher debt the taxpayer will have to cough up more now and in the future.

 

[TarfHead]

But you could "borrow" from the pension fund at no cost.

I suspect that you could not borrow from the Pension Fund to fund a current expenditure deficit. The recapitalisation of the banks will, I assume, have to be repaid.

Maybe not Anglo, though ?