More Pay and Pension Cuts for Public Servants

24 Nov

The Two Margarets

 

Along with swingeing cuts to the minimum wage, increased taxes for the lower paid, increases in student fees and other regressive tax increases, the FF-IMF junta has also just announced a raft of further pay and pension cuts for public servants (in addition to a myriad of additional taxes).

The key cuts are as follows:

  • An immediate 10% reduction in the pay of all new entrants to the public service. This was correctly predicted by the KPSWA in our post on 23 October.
  • All new entrants will start on the minimum point of the scale (i.e. no talent to be recruited to public service).
  • New entrants to have their pensions slashed by using average career earnings rather than final salary.
  • A ‘pension levy’ for retired public servants, giving a average pay cut of 4% for all retired public servants. No pension levy on pensions of retired bankers or other private sector pension pots.
  • A 21% increase in the pension levy for public servants who pay tax at the marginal rate (pension tax relief to be cut from 41% to 20%).

The document includes much government boasting about the further collaboration that ICTU will provide in the massive downsizing of the public service. The boasts are that “unions have agreed that services can be restructured, work locations can change and that services to the public can be offered over longer periods…More must be achieved by fewer staff with smaller budgets…staff to be moved from activities which are of lesser priority, or which have been rationalised, reconfigured, or restructured, to areas of greater need.”

The reaction to the plan has been predictable: IBEC welcomes it, Fine Gael complains that “reducing public service staff levels by 3,000 a year is not enough.” Needless to say, other than some lame bleating from Jack O’Connor about job-creation and the minimum wage, our union leaders sit on the sidelines and wring their hands.


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