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Archive for November 18th, 2012

Christmas is coming, the geese are getting fat
Please put a penny in the old man’s hat
If you haven’t got a penny, a ha’penny will do
If you haven’t got a ha’penny, then God bless you!

Christmas is indeed coming and the charity industry has taken over our streets and media in their seasonal appeals to the better part of our nature.  Although precise statistics on charitable giving are difficult to come by, it seems that we give an average of about €300 per household per year, equating to about €500m and per capita we are ranked around fourth in the world. It’s easy to be cynical about the menace of chuggers and the thinly-veiled blackmail of the sponsorship form, but these distractions exist in other countries, and we still emerge as a giving and generous people.

But a new charitable phenomenon has developed in recent years with those in Officialdom on ridiculously inappropriate salaries defending their income by claiming to give some or all of it to charity, or to waive it and hand it back. In two weeks time on 5th December 2012, Budget 2013 is set to be unveiled and we are all likely to experience a step-change in austerity as we find out what cuts and new taxes are in store for 2013. Most people in this country are in no position to “waive” part of their salary or give it to charity. And it is getting to the point where the generosity of politicians and others in waiving or donating part of their salary to charity is just underlining the degree to which those salaries have ballooned to such an extent that they are inappropriate to a country in an IMF programme, with 120% debt:GDP, a 8.5% deficit, 15% unemployment and sluggish growth.

Now before referring to individuals and organizations, it is important to stress that all income waived or donated to charity is lawfully earned.  For every Michael Noonan who gives his pension income to charity, there is a disgraced politician like Ray Burke who seemingly pockets it all. For every Ming Flanagan giving half his salary to charity, there are even more Independents who pocket the lot. For every Michael McDowell who gives all his pensions to charity, there is a John Bruton who’ll huffily say they’ve earned it. The intention here isn’t to vilify the people and organizations below, it’s to suggest that an alternative to this phenomenon might be reducing salaries to State employees to levels more in keeping with our straitened times.

Minister for Finance Michael Noonan is paid a ministerial pension for his time as justice minister in the 1980s and health minister in the 1990s. You’ll find all the ministerial pension payments set out here. There was a Michael J Noonan who was a defence minister so presumably our own finance minister is the one above receiving the €30,676. In any event he says that he gives it to charity. Above, you’ll also see An Taoiseach Enda Kenny’s annual ministerial pension payment from his spell as tourism minister of €2,050 which he waives.

The Independent Roscommon TD Luke “Ming” Flanagan donates half of his salary to good causes, as he promised he would during the General Election 2011 campaign.

Sinn Fein, North and South, famously impose a salary cap on their representatives of the “average industrial wage” – around €35,000 in the Republic. The remainder is paid to the party’s central fund and used to fund the party.  Sinn Fein says this sacrifice keeps their representatives grounded and in touch with the financial realities faced by most citizens.  Cork TD Sandra McLellan has expressed concern for the policy and says that it may be to blame for curtailing the “gene pool” from which future representatives can be chosen.

Labour TD Joanna Tuffy , who is chairperson of the Oireachtas education and social protection, committee waives the majority of the €9,500 allowance that attaches to all the committee chairperson roles, apparently she keeps €800.

Joe Higgins and Clare Daly were formerly the two representatives of the Socialist Party in the Dail. But nonetheless, even though there were just two of them, the Socialist Party was entitled to an allowance for a party whip to marshal the voting and behavior of party TDs in the Dail. The whip allowance for the Socialist Party is set at €6,000 but that Party has waived that allowance. It is understood that the deputies from the Socialist Party and People Before Profit Party both extract the average industrial wage from their Dail remuneration and the remainder is paid into the parties’ central funds and is used for party purposes.

The Wexford Independent TD, Mick Wallace whose controversial VAT underdeclaration and settlement, are still mired in confusion and unanswered questions, has said that he will pay half of his €92,672 salary as a TD to the Revenue Commissioners to help pay down the €2m tax debt apparently incurred by his incorporated limited liability company. At around the same time as he announced this concession, it was revealed that he was starting to claim the €41,152 Independents allowance.

The 61-year old former Tanaiste, Attorney General, justice minister and leader of the Progressive Democrats Michael McDowell says he gave his one-off €173,683 pension last year to charity. He still receives a regular pension and says that since 2009 he has been handing his pensions over to charity.

Beyond politics and more recently, we have seen some public servants asked to waive part of their salary. Staff being paid more than €200,000 per annum at NAMA and the NTMA were asked in December 2011 to waive 15% of their salaries in 2012 – all acquiesced to the request. In April 2012, the staff at what was Anglo were asked for a similar sacrifice and they said “no”. In the Central Bank, the governor Professor Patrick Honohan has handed back nearly 40% of his salary which leaves him in the anomalous position of being paid 40% less than his deputy, Matthew Elderfield.

Again, the identification of individuals and organizations above is not to single them out for criticism, indeed they deserve praise for their sacrifices but these charitable donations and waivers are no substitute for cutting the cost of running this State.

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