This is not as true as it might appear. As long as the national income keeps growing then it is possible to borrow indefinitely for current expenditure.You cannot borrow indefinitely to pay wages
The public sector are not the only people to pay taxes (in fact, taxes come from a huge variety of sources). Just because you pay taxes, it doesn't give you the right to decide what is done with those taxes.Well of course you need the public sector paid for by the private sector taxation
That is exactly what happens, it’s called redundancy.Going on your logic people in the retail sector shouldn't be paid when there's no shoppers in the premises purchasing goods, hotels should hold back wages for staff because some rooms aren't occupied,
I am struggling to understand your logic.Borrowing should only be to fund capital account expenditure.
Public servants should receive a 'bonus', based on whether the state revenues are in surplus or deficit - instead of just increasing wages in the good years and then stuck trying to pay them out in the bad. Similar to private companies where if they made no money, there is no bonus. In bad years for the country, there would be no bonus. In boom years, there would be a bonus. It would also help encourage public servants to see the connection between what they do and the success of the economy. This flexibility will be much easier than trying to cut base pay in next downturn.
We shouldn't be borrowing to pay day to day expenses.I am struggling to understand your logic.
Take hospitals or schools for a start. Health and education must be provided whether or not there is a recession, unless you think these services should be dramatically cut - all fine until it affects you or yours.
During the last recession thousands of people in the private sector were laid off. Who should have processed the considerable increase in welfare claims?
According to the IFAC, we would have been in surplus for the past two years were it not for health overspends.
Surely that should be the matter for discussion. As I understand it part of the reason for the overspend is the engagement of agency nurses, who are considerably more expensive than their public sector counterparts.
We shouldn't be borrowing to pay day to day expenses.
If we haven't got the money there must be either (A) cuts somewhere, or (B) look at where the money is going to get better efficiencies.
Of course it would be preferable if it's (B) but right now neither seems to happening as the easy out of borrowing is taken.
If we have a surge in welfare claims then reduce the payout. Don't commit to wage increases for public servants that you can't sustain (that's where the flexibility of the 'bonus' comes in).
ps with the bonus I don't mean public servants don't get paid in bad years; I mean they get their basic wage but not their 10% / 20% topup bonus.