The Irish government hates to impose austerity on the civil service since ministers and politicians are surrounded by them all day, as Eoghan Harris said on the radio yesterday.
This is different from the situation in the USA and Canada. Many US states must balance budgets and use civil service redundancies to do so. In Ontario, Canada civil servants do not have job tenure and for the first time ever in the mid-1990s, large scale layoffs were in the thousands.
On its present course,the Irish government will offset the growing deficit from falling tax yields largely by borrowing for a time,a dangerous expedient at a time of massive international borrowing by the US and other big countries and by giant corporations.Inevitably, it will be warned strenuously by the ECB and the EU Commission to cut back on huge percentage budgetary deficits. Then if it is to avoid a massive recession or even a depression in the private sector from increasing taxes,the only feasible strategy will be to cut public sector bloat that has accumulated in over a decade of high spending.
Specific measures could include
1. A total freeze on public sector pay for two years beyond the end of the present Social Partnership agreement.
2. Big pay cuts in the pay of the top civil servants on over €80,000 a year.
3. A freeze on new public sector employment and a strenuous programme to fill vacancies by reallocating workers between departments to make up for shortages.
4. Modification of pensions benefits for all new recruits should they reach the highly paid end of the pay scale,possibly with introduction of defined contribution plans for maybe half of the final pension.
5. Voluntary redundancies coupled with compulsory redundancies where necessary in the HSE and other sectors rated inefficient.
6. Reduction of FAS's billion budget in half to prevent systemic waste.
7. Cuts in infrastructure spending that has little productivity to contribute eg Metro vanity project could be replaced by spending on humble bus services in Dublin.
To provide some balance,the private sector could see further temporary three year tax increases on the highest earners, with a three year tax sunset clause designed to limit a fall in their consumer spending.



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