Just to boost your rage-levels which might be flagging mid-week, there has been an announcement today by Minister for Public Expenditure and Reform, Brendan Howlin about what RTE refers to as the
(1) “general” pay level for
(2) “future” appointments to
(3) “higher positions” in the public service
The pay will apparently be capped at €200,000 but for chief executives the cap will be €250,000. For existing employees and office holders, the government is to seek voluntary reductions to these two cap levels. There is surprisingly no commitment to publish the names of those who volunteer reductions – presumably those good people would be quite happy to have their names published. Given that there are moves afoot to hold a referendum to reduce the salaries of judges including sitting judges, it is not clear why the scope of the referendum is amended with a couple of sentences to encompass all public servants.
One of the most common criticisms leveled atIrelandand our complaints about austerity is that our public servants appear to be paid extravagantly for what is a modest economy. The bugbear on here is Mary McAleese who as head of state might have been expected to lead by example by volunteering a significant cut to her €292,500 plus expenses salary. At today’s exchange rates she earns USD $421,000 per annum, USD $21,000 more thanUSpresident Barack Obama. Not to belittle President McAleese who is, by all accounts, a charming and intelligent woman who bridged differences in Northern Ireland, particularly during the 1990s, but she is essentially a “smile and wave” ceremonial head of state that refers new legislation to her Council of State or the Supreme Court once in a blue moon, and has appeared uncaring for her people during the present financial crisis. That the State has to borrow €6,000 per week just to pay her salary is little short of obscene. (UPDATE: 26th June, 2011. The president did in fact take two cuts to her salary, one of 10% or €32,500 to her €325,000 salary in 2008 , and a second in December 2010 when she volunteered to reduce the salary from €292,500 to €250,000 which equates to USD $360,000)
Below is the regularly updated list of salaries above the Taoiseach’s (reduced from €214,000 to €200,000 at the Taoiseach’s behest upon assuming office). Of note is that the NAMA CEO’s salary includes the notional maximum bonus of €258,000 which was waived by Brendan McDonagh last year as were other NTMA officers and senior employees. Also of note is the 20% voluntary reduction offered up by governor of the Central Bank ofIreland, Patrick Honohan which places the Governor’s salary some €50,000 below that of the Financial Regulator, Matthew Elderfield who is junior to the Governor in the Bank. The following is sorted by salary high-to-low, and includes at the bottom three notable appointees earning less than An Taoiseach.
And here is a list of some other senior public sector appointees whose salaries have not yet made it into the public domain, though presumably that is set to change in the coming months with the commitment to include senior salaries in all public sector annual reports. The list is by no means at all, exhaustive.
NAMA Wine Lake 
Very interesting lists. I don’t think that the cuts have gone far enough given the deterioration in the economy and it prospects. It would be a simple job to benchmark top salaries against opposite numbers in other comparable EU countries. I submitted a proposal along these lines to the Review Body on Higher Remuneration in 2006 but was ignored in their report. See
http://www.planware.org/briansblog/2006/03/submission-to-review-body-on-higher-remuneration.html
The cutbacks in top salaries are not of huge economic significance in themselves. However, they serve as examples and should be used a a basis for scale compress throughout the higher and middle ranks of the public sector. As NWL has said there is nothing to stop the Government extending the referendum on judges’ pay to cover compulsory reductions throughout the public service.
Shocking. Just shocking. Time to start some “people power” momentum on this. Get the social blog going on this. People, post a twitter message, with the above namawinelake entry and: Cut Their Cake #ctc
Apropos Gerry Ryan, I think you mean “deceased” rather than “decedent” (sic)!
@Cormac, sorry this might be your Dan Quayle potato/potatoe moment.
Decedent – A dead person.
http://www.thefreedictionary.com/decedent
Methinks Cormac read it as “decadent”.
It’s pretty shocking stuff. With the promise not to increase income tax or reduce social welfare in the next budget, and the refusal of those at the top to take a pay cut (if they won’t, I don’t see why anyone below them should) it would seem we will end up with a civil service of appox. 0 persons (tax take €30bn less social welfare €20bn, debt interest €7bn and capital projects €3bn).
@Justin, your figures are simplistic but you are absolutely on the nail. Now GDP should stabilise this year and maybe increase 2-3% next year, and with that will come simplistically 2-3% extra tax. And we are likely to have net outward migration for the next couple of years, so that might take some of the strain off the unemployment/social welfare budget. But beyond that and a few other very small tweaks, you set out the position as it is. Cutting 30,000 from the public sector will help (with the costs, certainly not with the standard of service and of course the 30,000 will need jobs elsewhere).
But Enda is not being frank. We will need increase taxes, maybe not income taxes, but probably tax bands. Certainly property, water and possibly community tax (you haven’t heard about that last one yet?). The headline unemployment assistance might stay the same but there might be more tapering if you’re younger or unemployed for longer periods.
And although Enda might claim that adopting Morgan Kelly’s immediate balancing of the budget would be fatal, the majority of the balancing is not going to come from GDP growth or emigration reducing the strain, it’s going to come from more taxes and less spending. That’s a cold apolitical fact. Paddy might indeed appreciate knowing what the story is, on this one.
Why does Ireland need all these agencies? A National Stud? The best one is Director of Corporate Enforcement! I wonder what he enforces.
Ireland is like a 1,000 employee company that’s losing money and 500 of it’s staff work in the HR dept. If it wasn’t so tragic, it would be hilarious.
Interesting to see how much less the Chief of Staff of the Defence Forces earns when compared to the Garda Commissioner.
I never understood why, but the Garda top brass where always closer to the centre of power than the army staff could ever hope to be.
I suppose it is in keeping with the policy of running down the Defence Forces until there is nothing left to recommend keeping it any more.
There are three different scales for Secretaries General. It seems to me that you have Dermot McCarthy & Mr Cardiff on the lower scale. The highest scale for Sec gens was over €300K, but would be lower now.
The other issue is pension contributions. There is a particular problem there with huge contribution levels for some individuals, in particular Judges. Historically the value of the pension rights might exceed the annual salary. Also many academics have been given additional professional credits
However there is also the likes of Frank Daly, receiving a pension of €150k plus a salary of €250k. There are conditions on re-employment of retired civil servants, which seem to have been waived in the case of Daly. There are quite a few former Senior Civil Servants receiving substantial stipends on top of their pensions.
@Niall, thanks for that. The last I heard about Frank Daly, the NAMA chairman was that his annual fee was €170,000. That said, the last quarterly accounts for NAMA indicated that the non-exec directors were earning considerably more than €50,000 each per annum. It wouldn’t surprise me to learn that IMFer Steven Seelig, who is now on the NAMA board, was on more than €200,000 for a part-time appearance as non-exec director, perhaps we’ll find out in the NAMA annual report which should be published at the start of July 2011.
You hit the nail on the head here:
“That the State has to borrow €6,000 per week just to pay her salary is little short of obscene.”
The state is borrowing Euros it cannot afford to pass on to these people. Why doesn’t it pay them say 50,000 in Euros and the rest in IOUs (like California has done from time to time) or by issuing them with Irish government bonds for the remainder.
Why should foreign investors be willing to lend to the state in this way if these guys are not?
It’s gas to listen to them talk the talk, then watch them as they just tinkering around at the edges conflating arguments, deflating the economy, reluctantly planning bailout after bailout while bringing ever closer the moment of truth for Irish public servants and the semi states.
Permanent jobs will be axed, salaries will be slashed, pensions will not be paid or only niggardly amounts will be affordable. This is what is inevitable. The Croke Park agreement was a cowardly agreement by unions and government all trying to sing from the same hymn sheet ;
True servants of the state are we
we shall not take the pain
Let those of lesser standing fall
someone else someone else
that is modern Ireland’s call
But the someone else are our European “friends” and they are sick and tired of Paddy’s irresponsible, irascible fecklessness which has blighted their own country to the point of sovereign bankruptcy. Obama and the queen Elizabeth’s visits only displaying our penchant for any distraction that will serve to take our minds off the existential dilemma we refuse to face, which is the country is broke and cannot borrow a red cent on the money markets.
These ‘servants’ have been lining their pockets and feathering their nests at the expense of the very society they purport to serve. Anyone, with two eyes a nose, two ears, knows full well, that they were there for the money, the unsackable jobs (presently) status and the unfunded pensions. The pensions has to come from the till, the current taxes of the state, but oops! There is no cash flow, taxes have plummeted and to make matters significantly worse I notice that one of our two “pillar banks” has already defaulted, this according to the International Swaps and Derivatives Association the world body responsible for deciding on credit events. We have the ECB telling us that it is funding us “illegally” and in the middle of all this we have Brendan Howlin barking at the moon and insulting us with this rubbish.
Put it this way, back in February 2009 I wrote to E. Gilmore
Message for Eamon Gilmore
19/02/2009 04:20
Dear Eamon,
Did you know that back in 2004, in our country of round about 4mn at
this time, the richest 100 people in Ireland counted for more than
one fifth of Irelands total GDP with a sum of Euro 23bn? Astonishing
isn’t it?
Although we seem to get more used to 12 digit figures by now, I intend
to think it is always helpful to put such figures into proportion.
Back in 2004, from that list of 100, the 10 richest people in Ireland
counted for an average cash net worth of Euro 800mn each.
To achieve such fortune, the average industrial worker would have to
bank his/her entire Euro 27,000 salary (2004 figures)…. every year….
….for 30,000 years!
Best wishes
Georg Baumann
He replied:
From: eamon.gilmore@oireachtas.ie
Date: 20 February 2009 11:35:03 GMT
To: xxxx
Subject: Re: Website Mail Comment
Thank you for your email. ~thisis quite remarkable, when one thinks of it, in the way you have put it. I will make use of it!
Best wishes
EAMON GILMORE T.D.
LABOUR PARTY LEADER
In January 2009, my employer took a decision that I supported and promoted to cut slaries by 25%. It was what was necessary for survival. There have been further cuts since then.
I find it a disgusting obscenity that despite my own and my colleagues sacrifices, I am still paying the salaries and pensions of State officials, in a totally bankrupt State, who happily take from a decimated private sector to continue to enrich themselves. And who happily pass on any PS cuts to lower paid public servants while protecting their privilages.
There is no point in naming names. They are all guilty.
This greed will ripen to a bitter harvest.
There is a simple solution.
Put a new contract of employment in from every one of them. A new job. With salary cuts ranging from 50% to 10%. If people don’t want to take the cut, give them an RP50 with the statutory redundancy payments. For those who don’t know, statutory redundancy is two weeks per year of service plus one weekk, with the weekly pay capped at €600.
That is what is required in leadership right now. We will not get it.
@nwl
Keep naming the names. We need to know them. It is not just bankers that have have ripped the country off.
Concur completely with Joseph Ryan, but is there NOTHING we can do, ever?
Particularly in the light of Joseph Ryan’s post, this new scheme that was picked up now and that they call voluntary contribution, well, in my opinion it is 100% the wrong message. Were the people asked to contribute to Anglo Irish bank on a voluntary basis? Nope! It is another velvet gloved government touch, avoiding conflict at all cost. The same counts for the trade union leadership, conservative to their bone, and avoiding conflict at all cost, which is one major reason why the political price to be paid is so low.
What we can do is obvious, and it is happening. Establish odious debts, and when that process is finished, exercise the maximum possible pressure on the political class to repudiate these debts on the grounds of internationally established law. This pressure has to come from the people, and the earlier the better.
@ Georg R. Baumann
The political class are establishing “odious debts” in our name. That is the plan. They know the state must repudiate the debts as the state cannot afford to run itself, pay itself, service debts and pension itself off. The plan is to run up these debts and then default under the best negotiated deal they can do for themselves.
If you are on a salary of 200,000 and it is cut by 40% you are still earning 120,000 in a state where assets can be picked up for fractions of the price it would have cost 4 years ago. Prices well below the cost of production. So these ‘servants’ of the state who have ruined the country and who negotiated an MOU that will see the sale of any valuable state assets such as water, electricity, forestry etc. will still be able to retire to a grand elegant country house on 40 acres of land for a low multiple of their deflated salary. There salary will go down but there purchasing power will increase significantly. The trick will be to avoid the civil chaos aspect which their maladministration of the state has created.
Granted, they will have difficulty with the upkeep on a pension from the till, but there is a slim chance that the people will wake up because we are used to 800 years of occupation from without or within.
@ Joseph Ryan
I agree 100%.
@ Joesph Ryan,
It’s not just their salary which we have to pay for, but it is also their pensions as well.
The NPRF was set up to offset this liability in the future. How much of the NPRF is left? I think it reached 20 billion, but is now down to what? Does anybody know what Irelands future pension liability will be, are we looking at 100B, 300B or what?
How are we going to fund the retirements of all these civil servants when the coffers have been emptied into the banks?
@ NWL,
Can you tell us more about the community tax? Any info at this time?
@Sporthog, the plans for property and water taxes are, as you have gathered, confused. Will it be a flat €100 on property next year, will we have to wait for water meters before a water tax is introduced, will there a separate charge for septic tanks or group schemes, will there be a proper site valuation tax and if so who will value sites, will water usage up-to a certain limit be free. Lots of unresolved questions about which government has diverse views. And when we get down to brass tacks, the government will have a certain bottom line figure in mind for new taxes and then the relevant ministers will need devise schemes to allocate taxes to different heads of revenue raising. And I have certainly heard mooted the possibility of a community tax that might fund more local services. Of course don’t be fooled by the names of the taxes and think they will be introduced to fund new expenditure. In most cases, the taxes will be purely there to augment the State’s tax take which has been decimated by the collapse in the property (and banking) sector. There’s nothing evil about the next taxes – we need to balance our public sector and welfare costs with our tax revenue – it just seems cynical and dishonest not to plainly map out the parameters of what’s in store.
@Joseph Ryan
Completely agree however there are few issues:
1. Most likely those aggrieved parties would go to court and win for breach of contract and be awarded costs aswell.
2. Odd as it may seem just because your a shareholder (which is the case of the State with regards to semi State companies) gives you no automatic legal right to determine or amend working conditions or contracts for existing contracts and staff.
3. Croke Park and the unions strike threats.
In simple terms the law is on the side of the staff not the State insofar as current arrangements which are in situ.
The thing that really gets me annoyed however is for the FF crowd to start preaching about the current Govt not doing enough to get the rate cut on the IMF/EU package and in relation to the above in allowing these salary rates to have become the norm in the first instance i.e. the benchmarking exercise back in 2001/02/03 when they could have said no – what a complete joke – I mean tell me what difficult decisions does Joe Duffy ever have to make in his working day – show me the risk return relationship here.
In my view the benchmarking review was THE significant driver of the housing bubble that emerged following its implementation and we’re all paying the price for it today and will do for at least another 10 years.