The Colm McCarthy ‘Bord Snip’ came out with a shock report last week insisting that cuts of €5 billion are needed. This is not much given that the government spends €400 million a week more than it actually collects in tax revenue. The situation is not sustainable and has to be addressed. Even Labour and Fine Gael have not shown too much opposition to the need for cuts.
They would be glad to see Fianna Fail suffer and come to power later when the worst is over. As Ruairi Quinn of Labour said, this is the first time since De Valera that Fianna Fail, have had to sort out their own financial mess. Ray McSharry was ignored by him in 1987 and then the FG/Labour Coalition had to bring in the cuts.
Here in Waterford, there is the Bord Snip suggestion to merge Waterford City Council and Waterford County Council as one entity. Kilkenny is to merge with Carlow which will cause much concern. The manner of how they move forward to implement such cuts is a big factor. Cuts cannot really be avoided. McCarthy says better to do it now over 3-4 years rather than ignore it and do it over 10 with the IMF or the European Central Bank at the door.
Avoiding cuts may be the wish of Fianna Fail back benchers. Taking the easy cuts and not taking on the public sector unions may be their wish but some hard decisions have to be made. Politicians need to get back from holidays and get on with the work, take 15 -20 per cent pay cuts and lead from the top. People will trust politicians more if they make sacrifices. It must start at the top. Ministers must also take reductions of this nature.
Why did the politicians take such increases under Bertie Ahern? It seems absurd for a small country to pay our top man more than the American President. The people at the top need to get more real. A new benchmarking process is needed to look for value in the public sector. The last one was not realistic and led to over payments.
This is a great time of reflection in the country. We do not have too long to sort things out. Failure to react will see the EU force cuts or the IMF. A vote ‘No’ to Lisbon will frustrate the Europeans and could lead to further repercussions.
People accept that the country’s finances are bad. They want our leaders to rule by good example and show some sacrifices. Health and education cannot escape the cuts because so much spending is tied up in these departments.
The fall in the cost of living should help in keeping wages and costs down in the near term.
More threats to wages are likely if businesses or the public service survive in the current form. It really does seem that the money cannot continue as we are and it is taking a while for the country to realise that. Doctors and other professionals may also have to review their charges. For instance, a dental visit in Germany costs €50 compared to €70 here.
In the last decade we believed that we could pay ourselves more than the French and Germans where the cost of living is nearly 30 per cent less but to whom we are tied to in a single currency. Pay awards grew over the decade in Ireland and the disparity grew.
We have a long way to go to sort ourselves out, but a start must be made.