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 Cap public sector pay at 100k - how much would that save?

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PostSubject: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 6:29 pm

Here's a proposal: nobody in the public service should get more than €100,000 a year, and nobody in the public service should be paid a pension before they 65. That includes politicians.

How much would that save us ?


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http://machinenation.forumakers.com/estimates-of-receipts-and-expenditure-government-of-ireland-2009-f25/the-64-billion-euro-question-faq-t1499.htm?highlight=billion
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 6:34 pm

I heard Fintan O'Toole on about capping public sector wages at around 70k - maybe that was for a particular band.

It's time for people to go into emergency mode in fairness.

I split your post into a thread - hope you don't mind.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 6:51 pm

Don't mind at all, but feel a little guilty at asking a question like that that I am unable to answer myself.

Would need to know how many on a certain grade and above.

Before anyone says anything, I am not suggesting that this would solve all our problems.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 6:55 pm

It would be impossible to tell without knowing howmany people are on each grade!

However, it would save over 1.6 million on the salaries of the Cabinet alone.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 6:58 pm

http://www.finfacts.ie/irishfinancenews/article_1015769.shtml

Michael Hennigan sets out some of the issues here (although it is imo a public sector bashing piece).

As well as salary he says an equivalent in untaxed expenses can be accrued by TDs.

Pension is worth 30% of salary.

So I would add that the maximum should be €120,000 including all benefits.

Its not just a matter of saving money, its also ending the gouging culture.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 10:35 pm

cactus flower wrote:
Here's a proposal: nobody in the public service should get more than €100,000 a year, and nobody in the public service should be paid a pension before they 65. That includes politicians.

How much would that save us ?


[mod - audi - Originated on this thread ]
http://machinenation.forumakers.com/estimates-of-receipts-and-expenditure-government-of-ireland-2009-f25/the-64-billion-euro-question-faq-t1499.htm?highlight=billion
I asked a similar question recently on another site but didn't get an answer. Nor have I been able to track down the info myself. I also wanted a breakdown on numbers in the public sector on different wage bands but again couldn't locate that information. I think it would make much more sense to cap salaries at least temporarily at  €100 - 120 thousand than adopt cuts/levys on lower salaries. Doing the latter is going to mean people who are coping financially will see real hardship leading to no disposable income and therefore less money moving around the economy. Every cent less in the pocket of the public sector worker is one less in the pocket of the private sector I would think. Am I wrong?
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 10:56 pm

imokyrok wrote:
I asked a similar question recently on another site but didn't get an answer. Nor have I been able to track down the info myself. I also wanted a breakdown on numbers in the public sector on different wage bands but again couldn't locate that information. I think it would make much more sense to cap salaries at least temporarily at €100 - 120 thousand than adopt cuts/levys on lower salaries. Doing the latter is going to mean people who are coping financially will see real hardship leading to no disposable income and therefore less money moving around the economy. Every cent less in the pocket of the public sector worker is one less in the pocket of the private sector I would think. Am I wrong?

This capping business temporarily sounds good - in fact in a public sector job I can't see how much more than 120k is justified ?? But I'd settle for temporarily - what committments could these lads have that knocking 10k 20k or more wouldn't upset ? Do people have massive financial committments ? Like Judges for example - I know their job is very expert and demanding but would they miss a few 10k off their 300k salary per year ? How is that level of salary justified ?
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 11:05 pm

You can't reduce the salaries of the judiciary - it would require a constitutional referendum to remove this provision:

Article 35.5 wrote:
The remuneration of a judge shall not be reduced during his continuance in office

The article exists in order to maintain judicial independence so they can't be threatened with salary decreases by the legislature. However, I think it would be suitable to link the salary of a judge on a fractional basis to that of the Taoiseach. That would avoid the difficulty envisaged by the Constitution because why would a Taoiseach threaten to reduce judicial salaries if it meant also reducing his/her own. But as I said it would require a Constitutional Referendum which does cost money... you could do it at the same time as another Referendum as that would save money.

On the general issue, there is a point to be made that people do tend to make financial commitments linked to a percentage or multiple of their income. That is, a guy on 35,000 and a guy on 135,000 both probably have a mortgage of a similar multiple (the guy on 135,000 presumably living in a far more expensive home) so there is only so much of a percentage decrease most people can take before they start defaulting on their obligations. However, one would assume that people earning well in excess of 120,000 a year certainly have a fair amount of room to manouvre in terms of pay cuts. These are the things you have to take into account though, we don't want to be creating home repossessions for anyone, regardless of whether they're cleaners or managers.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 11:13 pm

johnfás wrote:
You can't reduce the salaries of the judiciary - it would require a constitutional referendum to remove this provision:

Article 35.5 wrote:
The remuneration of a judge shall not be reduced during his continuance in office

The article exists in order to maintain judicial independence so they can't be threatened with salary decreases by the legislature. However, I think it would be suitable to link the salary of a judge on a fractional basis to that of the Taoiseach. That would avoid the difficulty envisaged by the Constitution because why would a Taoiseach threaten to reduce judicial salaries if it meant also reducing his/her own. But as I said it would require a Constitutional Referendum which does cost money... you could do it at the same time as another Referendum as that would save money.

On the general issue, there is a point to be made that people do tend to make financial commitments linked to a percentage or multiple of their income. That is, a guy on 35,000 and a guy on 135,000 both probably have a mortgage of a similar multiple (the guy on 135,000 presumably living in a nicer house in a nicer location) so there is only so much of a percentage decrease most people can take before they start defaulting on their obligations. However, one would assume that people earning well in excess of 120,000 a year certainly have a fair amount of room to manouvre in terms of pay cuts.
That is a fair point - we do all have a tendency to "trade up" as our finances allow. But while selling up a house would be a lot to ask, trading from a merc to a toyota and cutting down to one family holiday per annum, giving up the golf club and the beauty salon etc wouldn't be a crippling sacrifice. Mind you thats easy for me to say since I wouldn't know what the inside of a merc or a beauty salon looked like!
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 11:23 pm

The inside of that model of Merc that the ministers have is very nice indeed. You can push a button and electronically adjust your seat whether you are sitting in the front or the back. The back seats have more legspace than the front of your average car and there are all sorts of other snazzy features including one whereby you push a button and a sun visor shoots out in a manner akin to the batmobile.... yup, that's what we're paying for!!

Never been in a beauty salon though, we'll have to let Kate P or Cactus or someone answer that one.

I do agree with you, and that is why I say that there is probably a huge amount of room for manouvre there, to cut salaries of higher paid people whereby they can cut out the luxuries. However, there is a level at which you also cut their ability to pay back their mortgage, even though they may be earning twice or three times the salary of a nurse and even though you may not like that they have a mortgage at a level so high they nevertheless do and cutting them to a point where they can't meet their repayments will force repossession and sale of a house in negative equity along with a huge debt burden around their necks. As I said, the desire to keep people in their homes applies as much to the wealthier in society as they do to the less well off.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 11:49 pm

It needs a referendum to give the judges a paycut ??? I don't remember voting in a referendum to give the hoors a payrise.

It makes sense what you're saying I suppose about them being subject to money corruption otherwise .... yeah right
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Wed Mar 04, 2009 11:53 pm

Quote :
On the general issue, there is a point to be made that people do tend to make financial commitments linked to a percentage or multiple of their income. That is, a guy on 35,000 and a guy on 135,000 both probably have a mortgage of a similar multiple (the guy on 135,000 presumably living in a far more expensive home) so there is only so much of a percentage decrease most people can take before they start defaulting on their obligations. However, one would assume that people earning well in excess of 120,000 a year certainly have a fair amount of room to manouvre in terms of pay cuts. These are the things you have to take into account though, we don't want to be creating home repossessions for anyone, regardless of whether they're cleaners or managers

This is part of the difficulty we face. Because our incomes (some of them) were temporarily boosted we took on big loans. That effects every income group. It is a f*ck up. Perhaps one way of doing it would be to cut away at the wages, but increase mortgage interest relief for anyone in the first five years of their mortgage say. also to require the bailed out bank to give extra leeway. It is not fair, because someone prudent who borrowed less or lived in rental accommodation, would not get that benefit.
But there is nothing fair about this situation.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 12:54 am

cactus flower wrote:
Quote :
On the general issue, there is a point to be made that people do tend to make financial commitments linked to a percentage or multiple of their income. That is, a guy on 35,000 and a guy on 135,000 both probably have a mortgage of a similar multiple (the guy on 135,000 presumably living in a far more expensive home) so there is only so much of a percentage decrease most people can take before they start defaulting on their obligations. However, one would assume that people earning well in excess of 120,000 a year certainly have a fair amount of room to manouvre in terms of pay cuts. These are the things you have to take into account though, we don't want to be creating home repossessions for anyone, regardless of whether they're cleaners or managers

This is part of the difficulty we face. Because our incomes (some of them) were temporarily boosted we took on big loans. That effects every income group. It is a f*ck up. Perhaps one way of doing it would be to cut away at the wages, but increase mortgage interest relief for anyone in the first five years of their mortgage say. also to require the bailed out bank to give extra leeway. It is not fair, because someone prudent who borrowed less or lived in rental accommodation, would not get that benefit.
But there is nothing fair about this situation.
Maybe pre-existing mortgage repayments could be factored into the equation especially if we are talking about a temporary arrangement. I would love to know how much could be saved by this arrangement compared to what is currently proposed. I know wriggle room gets a good bit larger the higher up the salary scale you go big house or not.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 1:02 am

Auditor #9 wrote:
It needs a referendum to give the judges a paycut ??? I don't remember voting in a referendum to give the hoors a payrise.

It makes sense what you're saying I suppose about them being subject to money corruption otherwise .... yeah right

There is some pretty funny caselaw on the issue - the wife of a judge once tried to argue before the Supreme Court that it was unconstitutional to force the judiciary to pay tax!! They threw out her case though Razz.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 1:46 am

johnfás wrote:
Auditor #9 wrote:
It needs a referendum to give the judges a paycut ??? I don't remember voting in a referendum to give the hoors a payrise.

It makes sense what you're saying I suppose about them being subject to money corruption otherwise .... yeah right

There is some pretty funny caselaw on the issue - the wife of a judge once tried to argue before the Supreme Court that it was unconstitutional to force the judiciary to pay tax!! They threw out her case though Razz.
Amazing! Reminds me of that guy who tried to sue the midwife for curtailing his videotaping of his wifes c-section. Some people are never grateful for what they've got!
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 1:29 pm

Was that about paying tax on his pension or something, johnfás? I seem to remember he was dead when she took the case or am I misremembering?


For financial reasons it makes sense to cap salaries in the public sector, though I assume they are capped in their own way already.

Having said that, there has to be an incentive to make it worth people's while sticking with the poor pay in the early years. I liken the teaching atmosphere for someone with a bit of ambition to trying to swim a length in a pool full of people treading water. It doesn't matter how hard you work, there's little hope of promotion or of being paid more for working harder and better.

The consequences for a public service and the kind of employee it might attract are potentially disastrous. That doesn't mean I don't think the public service doesn't need massive reform - it does, particularly in the way it rewards staff and the access to promotion (and therefore the kind of people who get promoted!) but capping pay isn't a good idea, imho, unpopular as that opinion might be...
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 1:44 pm

Kate P wrote:
Was that about paying tax on his pension or something, johnfás? I seem to remember he was dead when she took the case or am I misremembering?


For financial reasons it makes sense to cap salaries in the public sector, though I assume they are capped in their own way already.

Having said that, there has to be an incentive to make it worth people's while sticking with the poor pay in the early years. I liken the teaching atmosphere for someone with a bit of ambition to trying to swim a length in a pool full of people treading water. It doesn't matter how hard you work, there's little hope of promotion or of being paid more for working harder and better.

The consequences for a public service and the kind of employee it might attract are potentially disastrous. That doesn't mean I don't think the public service doesn't need massive reform - it does, particularly in the way it rewards staff and the access to promotion (and therefore the kind of people who get promoted!) but capping pay isn't a good idea, imho, unpopular as that opinion might be...

I've worked in the public sector: I don't think teaching is representative. Teaching is a hard grind and massive responsibility, compensated for by long holidays and good pay. Irish teachers are paid way over the odds compared to other European countries. They also produce very good results (except I think in Science and foreign languages?).

Higher Civil Servants live the life of Reilly. They have very long holidays and short working weeks. Overtime would be very much the exception, whereas in the Private Sector, unpaid overtime and very long working weeks is the norm at executive level. There is a very top heavy management structure and a lot of them frankly don't have that much to do. In the HSE numbers of them weren't able to describe their job responsibilities to the people carrying out the Bench Marking review. I don't personally blame any public servant for this situation, that would be plain silly. It is systemic and it needs to be changed.

Across Europe excellent people are attracted to equivalent posts for much less money. I think that good people are driven out of the public sector by the lack of challenge and responsibility, not the lack of money.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 1:48 pm

Yes, that is the case, Kate P.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 1:50 pm

Let's not kid ourselves that the public sector is great across Europe... have you tried dealing with any public body in France? It is an absolute nightmare and one which I have experienced on numerous occasions.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 1:57 pm

johnfás wrote:
Let's not kid ourselves that the public sector is great across Europe... have you tried dealing with any public body in France? It is an absolute nightmare and one which I have experienced on numerous occasions.

Germany and the northern countries are very good. Ireland is good in parts, bad in others. But I am talking about costs for equivalent jobs here: Irish public servants are paid more than their European equivalents - I posted a link to Finfacts on this in an early post.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 2:56 pm

What about opening up the public sector to some private work and contracts a bit more or is there plenty of potential for abuse of that? Like in teaching - if a fraction of the national teacher's bill could consist of private teacher pay employment ? Once you were appropriately qualified and registered with a European body and vetted by the Gardai here you could put yourself into the market.

This could also happen with builders or constuction workers who wanted some work with the councils. They could negotiate their own salaries with the school or local authority. It would be like co-located teachers.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 10:15 pm

johnfás wrote:
Let's not kid ourselves that the public sector is great across Europe... have you tried dealing with any public body in France? It is an absolute nightmare and one which I have experienced on numerous occasions.
You can't really judge an entire continent based on a few bad experiences, the best thing for situations like these is statistics (bad as they can be themselves). Does anyone have any?

Even in Ireland, I have known teachers who deserve much more than what they get, and teachers who deserve much less. Interesting that cactus should mention science as an area of under-performance in Irish teachers because my science teachers generally fit into the former category. That just goes to show how personal experiences really don't cut it as a standard for quality of service.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Thu Mar 05, 2009 10:23 pm

I know of nobody who has had a good experience with the French bureaucracy and that includes extensive time which I have spent in France and dealing with the French authorities at multiple levels. It includes multiple friends who have spent a year on Erasmus there. It includes my mother, to whom France was her residence, for 16 years of her life and her parents who lived there permanently for the same period as a senior figure in a European institution having day to day interactions with all of continental Europe's public services.

France is a country of madness and a country of ironies. Thankfully recently they got rid of the situation whereby to get a residency permit you had to have a permanent address in France and to rent a room at an address in France you had to have a residency permit - try working that one out Very Happy.

It isn't anything to do with comparing French salaries to Irish salaries it is just a point that the French have a ridiculous public service in terms of getting anything done. Good health system and good trains though... even if you do have to follow the sign for bus rather than the sign for train to get to the RER from Charles de Gaulle to Chatelet Les Halles.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Fri Mar 06, 2009 9:51 am

Quote :
I've worked in the public sector: I don't think teaching is representative. Teaching is a hard grind and massive responsibility, compensated for by long holidays and good pay. Irish teachers are paid way over the odds compared to other European countries. They also produce very good results (except I think in Science and foreign languages?).

Higher Civil Servants live the life of Reilly. They have very long holidays and short working weeks. Overtime would be very much the exception, whereas in the Private Sector, unpaid overtime and very long working weeks is the norm at executive level. There is a very top heavy management structure and a lot of them frankly don't have that much to do. In the HSE numbers of them weren't able to describe their job responsibilities to the people carrying out the Bench Marking review. I don't personally blame any public servant for this situation, that would be plain silly. It is systemic and it needs to be changed.

Across Europe excellent people are attracted to equivalent posts for much less money. I think that good people are driven out of the public sector by the lack of challenge and responsibility, not the lack of money.

Of course the system needs to be changed. I did make that point.

Let's leave teaching aside.

For better or worse, public servants at the higher level run the country. They are the link of continuity between different governments and they manage the most important organs of the state. I don't think it's appropriate to suggest that the secretary general of any department shouldn't be able to receive as high a salary as s/he's worth for the service they give the state.

To support a ceiling in public sector pay is to support what I believe is the creation of a rather insidious social divide between the public and the private sector. It's a socialist bridge too far and an artificial one at that which says that work for the state is not worth the same meritocratic standards as private business. I can't believe in that dichotomy. By all means let's have proportional paycuts commensurate with the ability to carry that cut, but let's not say to the best and brightest who should be the leaders, that we'll have them all plateau on the same level to stagnate. 100k is not a lot considering the responsibility of and demands on, for example the Secretary General of a department.

I do think that the high cost of living is a factor in the disparity between the Irish rate and those of other countries, though not the only one of course and not even a very big one.

Not all Higher Public Servants live the way you describe, cactus and they don't all hover in the upperish levels of the HSE. Many of them have extremely responsible jobs and put their heart and soul into them. Certainly there's waste and duplication in some levels.

Off the top of my head I don't know what Professor Tom Keane is getting but I wouldn't insult the man who is doing an excellent job by telling him he'll get no more than 100k.
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PostSubject: Re: Cap public sector pay at 100k - how much would that save?   Fri Mar 06, 2009 11:40 am

Kate P wrote:

For better or worse, public servants at the higher level run the country. They are the link of continuity between different governments and they manage the most important organs of the state. I don't think it's appropriate to suggest that the secretary general of any department shouldn't be able to receive as high a salary as s/he's worth for the service they give the state.

To support a ceiling in public sector pay is to support what I believe is the creation of a rather insidious social divide between the public and the private sector. It's a socialist bridge too far and an artificial one at that which says that work for the state is not worth the same meritocratic standards as private business. I can't believe in that dichotomy. By all means let's have proportional paycuts commensurate with the ability to carry that cut, but let's not say to the best and brightest who should be the leaders, that we'll have them all plateau on the same level to stagnate. 100k is not a lot considering the responsibility of and demands on, for example the Secretary General of a department.

Private sector remuneration (for better or worse) is often based on risk-taking and other insecurities that the public sector isn't subject to. Our secretary generals among others receive remuneration to the tune of what the U.S. President receives but maybe we're not comparing apples and apples there. How many Presidents of the U.S. do we need running Ireland and shouldn't their remuneration and positions be constantly under review in order to keep costs low and to get the best people for the job ?

I'm not saying they shouldn't be handsomely salaried just appropriately so and their number at an appropriate level for the running of a small nation.



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