Financial Consultant Eddie Hobbs, RTÉ presenter Claire Byrne and Liam Doran, of the Irish Nurses and Midwives Organisation (INTO)
On RTÉ One’s Claire Byrne Live show, financial consultant Eddie Hobbs and Liam Doran, of the Irish Nurses and Midwives Organisation, spoke about public pay.
It comes as it’s reported that the Public Service Pay Commission’s recommendations are to be presented to Cabinet by Minister for Public Expenditure Paschal Donoghue today, ahead of public pay talks in coming weeks.
Pat Leahy, in The Irish Times, reports:
“The report has not been distributed in advance by Mr Donohoe, and Ministers have not been made aware of its contents. However, sources told The Irish Times that the report will recommend the recession era pay cuts – the “Fempi” cuts (Financial Emergency Measures in the Public Interest) – should be unwound gradually as part of a wider pay agreement.
…It is understood that the Department of Public Expenditure is prepared to offer public servants wage increases of about 6 per cent over three years. Additional pay rises could also emerge from local bargaining arrangements.”
Further to this..
From last night’s discussion on Claire Byrne Live.
Claire Byrne: “Eddie, you think that the public sector have it so good that, if you’re a young, private sector person, you should go and marry one of them. Is that right?”
Eddie Hobbs: “Well, I suppose I was just being funny to make the point that, you know, most people in the private sector don’t have a pension fund and less than, you know, one in six have anything like a guaranteed pension and nobody has the sort of Bugatti Veyron-type pensions that exist at the very top of the public sector, in the private sector. What we do know in the private sector is that, you know, the average rates of pay in the private sector pay, Claire, today, in 2017, just now are reaching the average in the public sector in the year 2000. That’s quite staggering. And it will probably be post-2030 by the time average rates of pay in the private sector match those currently in the public sector.”
Claire Byrne: “So what are you saying, they shouldn’t get any pay rises. And they shouldn’t get, their pension shouldn’t be tackled?”
Hobbs: “No, not at all. What I’m saying is that Ireland has, whether, you know, we’re all interconnected, just to get a few things out of the way, everybody’s interconnected – whether you’re in the private sector or the public sector because most of us contribute into the social insurance fund which funds the old-age pension. And if you look at the growth and the cost of pensions, it’s staggering. In or around the year 2000, the current year’s payout in pensions, for public sector pensions was around €870million. In 2006, it was €1.6billion. Today, it’s €3.3billion. So, roughly, it’s for every €5 paid in pay, there’s about €1 paying in pensions. Now, if you look, say the gardaí, the ratio of serving members to retired members is now almost one to one and the payout of the gardaí is about €1billion a year in Ireland but it’s about €400million in pensions.
“But I just want to make one final point and it’s this: the social insurance fund which funds all our old-age pensions has a projected deficit of €324billion over the next number of decades – that’s the gap that we are failing to fill with our own personal contributions and the debt to public sector pensions is €100billion. It started off before benchmarking at €20billion, it’s now €100billion. So it’s gone up…”
Byrne: “Benchmarking, you’re saying, is at fault for creating that big, black hole?”
Hobbs: “I think what’s needed is we need to, we need to decapitate public sector pensions at a level we can afford. I don’t mean hitting the middle and lower-end. I mean the Bugatti Veyron version. And we need to introduce…”
Byrne: “Will we get enough back though, from the people at the higher end?”
Hobbs: “Well, no we won’t because what we then need to do is, we need to have a substantial increase in all our contribution rates and employers and employees into a universal pension scheme that both public and private workers exist the same and there isn’t a wealth transfer from one to the other because it’s creating an underclass and an overclass in our society. And that’s very, very dangerous down the road.”
Byrne: “Liam Doran, representing nurses, we heard that industrial armageddon relations, armageddon was coming from nurses if you didn’t get what you’re asking for. You’re looking for 12% is it? Over a number of years?”
Liam Doran: “We’re looking for parity with other degree-level health professionals, yes.”
Byrne: “And you believe that you should be a special case?”
Doran: “Well, it’s not a question of I believing it. It’s a question of the market confirming to Ireland that if it wants a workforce of nurses and midwives, it’s going to have to address the pay issue because, quite currently, Ireland is not competitive. Nurses who qualify here, midwives who qualify here are emigrating in their thousands – 7,500 to the UK in the last six years, about 14,000 overall in the last nine years. Those people have left our shores. We need them. But, currently, other jurisdictions, and they’re highly mobile, are paying them much better rates, less hours of work, more access to continued professional development, so we’re not competitive in that private sector sense that Eddie lauds so much. I love Eddie’s comparison about everything within the year 2000 and so on, but he’s conveniently forgotten the cuts that were imposed on all public servants in 2008/9, that have left many of them unable to pay their bills and so on, and struggle. But yet people want essential public services and they want those people at work.”
Byrne: “Liam, in order to get that 12% pay rise, are you willing to put pensions on the table, for discussion?”
Doran: “No, no, the issue about. There’s two things going into these pay talks, and I’m quite blunt about these things. One is, the people that I represent, and public sector people at large, want pay restoration, the money that was cut, as this economy grows, we want to get our money back. But, secondly, in relation to nurses and midwives, yes, absolutely, if we are to apply the norms of the market, the things that govern, the ins and outs, the ebb and flow, we are not competitive and we’re going to have to address it. And we can’t afford to wait around for the length of this agreement, whether it’ll be one, two, three or whatever it is, for the day to come to sort it out. We have to sort it out now and the INMO is quite clear: the Government has said, repeatedly, you do these things through process, we’re going into a process and we expect the Government to come to that table. They will have their own agenda and we’ll have to deal with it but our agenda is quite clear: and one of them is parity with other allied health professionals.”
Hobbs: “We have an underclass and overclass of workers. The private sector is an underclass at the moment, when you look, the fact that, if you look at the private sector. Only 16% are in guaranteed pensions, half have no pensions at all and the rest have underfunded pensions. So, with a huge deficit in the social insurance fund, as I said, €324billion, we’re heading for a huge problem within the next 10 or 15 years in retirement and this…may I finish the point… the problem is the same with public, a lot of public sector pensions are dependent for support from the social insurance fund aswell, so it’s a problem common to them. As well as the fact…”
Byrne: “So if they get the 12%, do they have to give it back on the pension side?”
Hobbs: “They want to replace FEMPI [Financial Emergency Measures in the Public Interest Act 2015] with SEMPI, which is Somebody Else Must Pay It doctrine.”
Doran: “Ah well, Eddie, that’s more…”
Hobbs: “That’s the case…”
Doran: “No, that’s more of the soundbite. The problem in pensions in this country, the problem with pensions in this country, it’s not that public servants, on very ordinary income, have one. Right? Cause the vast majority of nurses, for example, retire on the max staff nurse scale of about €47,000/€48,000, after 20 years’ service. They have about 20-30 years’ service, which gives them a pension of about €16,000 that they’ve paid for throughout their working lives. There’s not a problem with that. They deserve that, they’ve earned it and they’re going to hold onto it, as far as I’m concerned.”
“The problem with pensions in this country is, is that every private sector employer that can has walked away from their social and other obligations to contribute to a pension scheme for their workers. Even profitable companies.”
Applause from audience
Doran: “Even profitable companies in this country have ran like hares down holes to avoid any moral or social responsibility. Very profitable companies who, in the media business and so on, have all done that. And then, the whole of the commentary come along and says ‘public sector, wrong to have a pension because the private sector don’t have it’.”
Hobbs: “Well, that’s not…”
Doran: “Everybody, everybody needs a pension to protect them as they reach their older age…”
The results of a survey taken by Amárach Research/Claire Byrne Live, presented during the show.
Watch Claire Byrne Live in full here