StatusIreland

On April 2nd 2009, Ireland’s 3 largest stockbrokers; Davy, Goodbody & NCB issued a collective response to the current challenges facing the Irish economy. It is clear from the report that Ireland is in need of major change on many fronts.

One of the areas of change spoken about in the report is the area of the public sector. Public sector reform is, at this stage, a jaded conversation but clearly when top economists point to it as an area of serious concern then it is a sign that things need to happen here.

“The public pay bill has almost tripled since 2000 to reach almost €19bn (encompassing the recent pensions levy) in 2009. This increased cost base has led to a cost-push impact on prices across the economy and has not been matched by improvements in productivity. At a minimum, savings of c.€4bn need to be made to bring public pay/GNP back to 11%, in line with the 2003-2007 average.” – Joint Broker Research Report

In 9 years the public sector pay bill has tripled but equally as important is that productivity is nowhere near this and this fact is evident in almost every section of the public sector with health being the biggest of the black holes.

In order to get this economy turned around it will take at least 3-5 years but this is only if changes are put in place right now. The area of public sector pay has to be adjusted. It will cause pain to those who probably have never before experienced it but there will be little or no sympathy from the general public who have been shouldering 99% of the burden of this bust until now.

Unemployment at the end of March stands at 11% and counting. 369,100 people work in the public sector so there is room for optimisation in every department. There are other ways to reduce this number for the short term such as offering an incentivised career break for 3 years or so, offering early retirement to senior management, offering shorter working weeks etc.

The government have estimate that in 2009 they will need to borrow €23 billion to balance the books, a figure revised up from an €18 billion estimate only a few weeks before. The problem is serious.

Reducing the headcount will help to reduce the problem in the short term but more importantly put the country on the road to a speedier recovery. It is time that this government finally got it’s house in order. The same people have been there for long enough.

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Live register figures continue to climb. 26,700 people joined the live register in February bringing the total to almost 353,000 people now signing on.

The unemployment rate now stands at 10.4% which is the highest in almost 12 years. The jobs created by the ‘Celtic Tiger’ have now been eradicated in around 12 months and the country is faced with a worsening situation. As the government toy with which tax to increase and how to reduce public spending they will be aware more than anyone else that unemployment figures are set to continue increasing.

There is also the situation that these figures are not even accurate, long delays in dealing with Social Welfare claims means that many people who are currently unemployed are not yet even included in these figures.

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100,000+ have marched the streets of Dublin today in protest of the economy and the government’s handling of the situation so far. The protest was organized by Unions but I can’t help but feel that a savings of 100,000 * €20 (a month union fee) would be better spent on anything other than unions.

How about a protest by union members who have got nothing for their money except an almost hyper inflation over the past few years. A real protest would be to stop paying your union membership and join with others who actually care about jobs, the economy and this country. Join with them and figure out a way to make a real change. Clogging up the streets of Dublin on a mild Spring Saturday afternoon has about as much impact as a punch from Willie O’Dea’s granny.

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It was noted back in January of this year that the government were closing their little visited and very useless website reachservices.ie.
The site was approved at a cost of €14,000,000 by a committee on eGovernment. It ended up costing €37,000,000 to build. It then had annual costs of €15,000,000 a year.

The local and European elections on 11 June 2004 should have been the dawn of a €50,000,000 e-Voting system. Instead due to the lack of public confidence on the back of an ICTE submission to the independent Commission on Electronic Voting which said the machines had a technical flaw the machines were shelved. Cost of this shelving is about €2,000,000 per year.

A small glass tuck shop on the grounds of Leinster House on Kildare Street was built between March 2007 and opened in January 2008. The bill for the 40Sq m glass house was €1,280,867.

Today (15 December 2008), it is reported that a senior manager in An Post was awarded a total of €106,000 for his 11 weeks work in 2007. Following a restructuring of An Post some employees who were surplus to requirements i.e. didn’t accept a move elsewhere, were moved to what is known as the “rubber room” or officially the resource centre. Here they had little or no work to do but still qualified for full pay and bonus.

These are of course just some of the many, many examples of waste in the public sector. The idea of reform of any sort in the public sector seems to be the least of the governments priorities. Due to bad management and a lack of willingness we are finding ourselves living in a country which costs €50billion a year to run. €20Billion covers the wages in the public sector alone. There is surely some fat that can be trimmed off and some wiser choices that can be made. There better be because so far this year the government has pulled in only €40billion in taxes and that is why we need to borrow, borrow and borrow some more.

Finance, ireland, technology an Post, Dail, e-voting, eGovernment, Irish government, Leinster house, reachservices.ie, revenue, Rubber room, tuck shop