If the Government wants to gain public trust, they need to show the way by cutting their own salaries and perks, writes Stephen Collins
IF HE DOES his job properly, Brian Lenihan will send the country into a state of shock on Tuesday with the severity of the budget. It should be one of those occasions on which the worse it is on the day, the better for the country in the long term. The real question is not how tough the budget will be but whether it will be tough enough.
While the public has been softened up to expect a difficult budget, there is no indication of a widespread acceptance of the need for the savage measures required to stop the country slipping into financial and economic disaster. Up to recent days there was not much evidence that most politicians or public servants had any idea how serious the situation had become either.
The primary responsibility for the state were are in lies with the Government itself, which contributed so much to the creation of the construction bubble and responded so complacently to its collapse until very recently. It took the astonishing decline in tax revenues of the past few months to wake it up to reality. The cost-saving measures announces in July turned out to be a feeble response to the scale of the problem. Even the decision to bring the budget forward to October looks more like a public relations stroke than a serious effort to deal with the current disarray in the Government's finances, as the measure will not take effect until January 1st next.
It would have been better to have brought in a supplementary budget with immediate effect. Cost-cutting and tax-raising measures to deal with this year's problems should have been piloted through the Dáil when it returned from the summer break at the end of last month. Such a move would not only have done something to close the yawning gap between spending and revenue for this year, it would also have woken up the public to the true nature of the threat to the wellbeing of country that now exists.
For instance there was not a murmur from any quarter when the Government went ahead with a 2.5 per cent pay and pension increase for all public servants on September 1st, at a cost of €310 million a year. This not only compounded the exchequer's problems but sent a signal that it was business as normal. If ever there was a case where the State should have raised the issue of its own inability to pay that was it.
Deferring the award would, of course, have led to huge industrial relations problems in the public service and would have torpedoed a new national agreement. In the event, the benefits of that agreement are problematical, and most workers will be lucky to get its terms. Next year public servants may even have to face the reality that when times get really bad the exchequer may not have the money to pay the 2009 award.
A key problem in any discussion about public service pay and pensions is that Government Ministers, and most TDs for that matter, don't appear to have any idea what life is like for the majority of workers. The political system has pampered itself over the past decade with extraordinary salaries for Ministers, TDs, middle-ranking and higher civil servants, as well as Government advisers. The pampering doesn't stop there. The pensions of our politicians and, for that matter, our entire public service are the most generous in the world. Unlike almost all other pensions they are linked to the salary of the person doing the same job in the future. It means that many retired politicians and public servants are drawing far bigger pensions than they were ever paid as a salary during their working lives.
Then there are the amazing perks politicians have like ministerial cars, an array of Oireachtas committee posts with substantial extra pay and pension benefits for those on the next rung, with unvouched expenses for all. When they lose office ministers qualify for severance packages on top of their salaries or pensions.
The net effect of all this is that senior politicians in the almost permanent Fianna Fáil government have not been living in the real world for some time. The clever ones can disguise it by conveying the impression they have no interest in money or perks. However, the lives they lead are the lives of wealthy people, not the lives lived by the majority of the people who vote for them. The same applies to senior civil servants and the people at the top of the array of quangos that have mushroomed in recent years.
How can politicians who lead such a privileged existence now tell people far less well off than themselves that it is time for painful belt-tightening? If they really want to gain public trust and credibility, they need to show the way by cutting their own salaries and perks. Nothing demonstrated how far out of touch our political leaders were than the attempt last year to take another massive pay rise.
Enda Kenny's decision to adopt a unilateral pay cut of 5 per cent has put it up to the Taoiseach and his Ministers, who are paid more than twice his salary, to at least follow suit. The Fine Gael leader's decision is more than a gimmick; it gave credibility to his party's pre-budget submission and its call for a public sector pay freeze next year for all those earning over €50,000.
The Government has a duty to do whatever is required in the budget to protect the State's finances and that will undoubtedly include a range of cuts and tax increases that will have a direct impact on the living standards of the entire community.
If people are to accept such measures they will need to see that the Taoiseach and his Ministers are prepared to share in the pain.