This post scores Budget 2010 against three criteria: closing the budget deficit, preserving public services and managing expectations. While scoring very well on the first two, principally because the nettle of public sector pay was grasped, expectations about taxes and future Budgets were not properly managed, which may cause trouble down the line.
On a day of national strikes, this post reviews the evidence on cuts in pay and presents three arguments against the trade union line that their pay must not be cut: only public sector is an Exchequer issue, we do not know what is happening in most of the private sector, and public sectors should adjust different to recessions anyway. If private sector scale savings had been achieved, the Exchequer would be €1.5bn better off this year.
New data from the CSO show in starkest terms the pay gap between public and private sectors. The evidence is now overwhelming that public sector workers enjoy a massive salary premium, which given the state of the country’s finances can no longer be afforded.
Earlier this year, I calculated average salary estimates for the public and private sectors in Ireland. The answer, that the average worker in the private sector earned €40,000 last year, almost €10,000 less than their public sector counterpart, has proved if not controversial than certainly a starting point for debate. Given some of the comments [...]
