So Minister for Finance Michael Noonan claims he is powerless to change what he calls “historic” agreements on bank salaries, pensions and perks. This, in the wake of the revulsion and anger following the revelation last Wednesday and Thursday at the Oireachtas finance committee that former employees at AIB and Bank of Ireland were being paid annual pensions of €529-650,000 per annum in institutions that were bailed out to the combined tune of €25bn.
The furore has blown up now because the significance of the €1.1bn partial top-up in August 2012 of the €1.5bn pension deficit at AIB has been realised more fully, and people are asking where this hole was identified in the Central Bank stress tests in March 2011 and whether Minister Noonan approved of, or even knew about, the transaction.
Remember also that AIB employees were offered redundancy packages understood to be “four weeks’ of pay per year of service, including statutory entitlement, or three weeks’ pay per year of service plus statutory entitlement, subject to a payment cap of two years’ annual salary” [Statutory redundancy is two weeks' pay for every year of service over the age of 16 and one further week's pay eg work for five years and you get 5*2+1 weeks redundancy. The amount of statutory redundancy is subject to a maximum earnings limit of €600 per week (€31,200 per year)] This at a bank that is 99.8% owned by the State after a bailout of €20.7bn.
Remember the 23 workers at Vita Cortex who ended a five-month 161-day sit-in in May at their plant in Cork? Their demand was 2.9 weeks for each year of service. Vita Cortex was not bailed out by the taxpayer.
Remember also the referendum last October 2011 to reduce the salaries of judges in this country, salaries which it was felt were copper-fastened in the Constitution and couldn’t be reduced? The referendum was passed with 1,383,877 (79.7%) citizens voting for the amendment and only 354,154 (20.3%) voting against. On 23rd October 2012 in the Dail, the Sinn Fein finance spokesperson asked* the Minister for Justice, Equality and Defence Alan Shatter how much was saved annually as a result of the referendum and the response was €3.6m overall though that includes savings for reductions in salary offered to newly appointed judges.
So, there are questions remaining for Minister Noonan and the Department of Finance with respect to their oversight of AIB, a bank in which Minister Noonan owns 99.8% of the shares. But it is also patently untrue that “historic” contracts can’t be altered – we did it simply and without great effort in October 2011 when we overwhelmingly voted for reductions in judges’ pay. Bankers have not adjusted to the new reality in Ireland – what is needed is bread-and-butter banking services which do not require Masters of the Universe to deliver, and in the bank jobs marker, supply exceeds demand. And being an employee at a bank does not confer greater entitlements than being an employee at Vita Cortex – in fact because Vita Cortex didn’t get a bailout, arguably the entitlements of bank workers are less than those at companies like Vita Cortex.
On Saturday next we get to vote on the amendment to the Constitution upholding rights of children. Substitute “ATMs” for “children” and “banks” for “parents” to the referendum wording and you get the text shown at the top of this blogpost. Except in our Republic, we are acting as if we have already passed the ATM referendum though none of you voted for it – what does that say about our priorities as a nation?