TDs are living like lords and expect the public to cough up these extra charges
There is a need to address the issues put forward by Brian Walsh TD in last week’s Galway Advertiser. He mentioned that the income of the unemployed, children’s allowance and public service pay has soared since 1997. Well, Mr Walsh, lets look at the pay of TDs, ministers, and the Taoiseach since 1997. The basic entry-level salary of TD’s €93,000, and up to €120,00 in allowances and expenses, and committee expenses €10,000. Total €223,000 a year. Some TDs have started at over €100,000 in salary and claimed more than €120,000, for example one TD (non-minister) got €289,769 in 2008 (Dail public accounts). The public accounts show that from 2005-2008, many ordinary TDs got in the region of €600,000 - €700,000 each, an average of €200,000 or more per year in salary and allowances and expenses each. A typical TD could expect to get around €200,000 per year today, though some would get slightly less and some slightly more.
In 2012 the Taoiseach gets €200,000 euros, and up to €118,000 in expenses and allowances, giving a total of €318,000 per year. The Tanaiste gets €184,000, and up to €120,000 in allowances and expenses, giving a total of €304,000. Ministers get €169,000 and up to €120,000 in allowances and expenses giving a total of €289,000.
In 1997 the salary of a TD was €45,000, and up to €30,000 in allowances and expenses. Total salary and expenses for ordinary TDs averaged €60,000 per year. In 1997, the Minister for Finance Charlie McCreevy, under pressure from all political parties in the Dail increased the salaries, allowances and expenses of TDs. These increases continued throughout the Celtic Tiger years. In 1997 the Taoiseach’s pay was €133,000, the tanaiste’s pay was €115,000 and minister’s pay was €107,000. In 1997, Taoiseach’s and Minister’s allowances and expenses averaged about €30,000 each.
Since 1997 there has been 333 per cent increase in TDs’ total pay (€200,000 / €60,000). This 333 per cent is a massive increase in pay for ordinary TDs, they now get 5.6 times the average industrial wage. Since 1997, there has been a 195 per cent increase in Taoiseach’s pay, 209 per cent increase in Tanaiste’s pay, and 210 per cent increase in ministerial pay. The Taoiseach gets 8.9 times the average industrial wage and the tanaiste and ministers get 8.5 times and 8.1 times respectively.
Brian Walsh TD may be whingeing about the 130 per cent increase in unemployment payments since 1997, but it is a small increase when inflation and the price of housing and basic goods is taken into account. Unemployment payment at €9,776 is meagre, and three times smaller than the average industrial wage. You are living like lords in the Dail, and yet you want to cut the meagre pay of the unemployed, many of them having been made unemployed through Government austerity policies.
Brian Walsh’s statement of 400 per cent increase in public service pay and pensions since 1997 does not take into account the massive increases in the pay of top civil servants on €100,000 – €250,000 per year and mid-to-high ranking civil servants on €90,00 or more per year, semi-state bosses on over €200,000 per year, and of course politicians and ministers. Brian Walsh and his political buddies may not intend tackling over-payment in these areas, but are over-eager to reduce the pay of those people receiving low pay in the public service. So could I suggest to Brian Walsh and his political cronies, that they concentrate their efforts on those people who are over-paid and earn several multiples of the average industrial wage.
The CEOs of many private companies make in excess of €400,000 per year, bankers can make €500,000 per year, hospital consultants typically make €250,000 or more per year, many lawyers, barristers, doctors and other professionals are on €200,000 or more per year. These are massive increases since 1997, and several multiples of average industrial earnings. And they add to overall cost structure of doing business in Ireland.
Brian Walsh then goes on about the €19 billion deficit in government finances. Most of this deficit is due to the government’s decision to capitulate / surrender to the IMF/EU and take on €85 billion in private banking debts and recapitalisations, and from the extra money required to pay unemployment to those people made unemployed or bankrupted by the Government’s idiotic austerity policies.
Then he claims that they are being pro-business, while they support and maintain upward only commercial rents (driving many businesses to bankruptcy), imposing new redundancy expenses for business, extra VAT rates, new stealth taxes, expensive inflexible commercial rates, and restrictive practises in law, accountancy, and other professions, etc., and to worsen this mix - the collapse in consumer spending through continued government austerity measures.
The recent EU agreement is in fact an austerity union not a fiscal union. The new taxes in Ireland are a component of this austerity union. A fiscal union has an entirely different structure to an austerity union. I do not have space in this letter to outline the differences this week, though I would refer the reader to the papers of Professor Martin Feldstein of Harvard University on this topic.
Brain Walsh is also wrong to say that there are no practical alternatives to the current austerity programme. There are alternatives, but politicians have ignored them, and have become far too content and complacent with their own luxurious lifestyles. The United Left parties have alternatives, Ganley’s Eurobonds is another option, the goodwillbank.com is another option, Trinity College Professors Gurdgiev and Lucey have options, Professor McCarthy of UCD has options, Peter Matthews TD has options, Professor Steve Keen from Australia has options, and nobel prize winning economists Krugman and Stiglitz have provided options. Ultimately these alternatives involve the intervention of the ECB, the printing of new monies, the creation of new European bonds and the simultaneous removal of the private banking debt burden off the backs of taxpayers and the vulnerable in society. This would create the necessary room for economic stimulus in Ireland and Europe, and a stronger and more sustained economic recovery in Ireland. Thus providing growth both in domestic demand and foreign demand (via exports). If Merkel and Sarkozy are not prepared to do this, several countries should threaten to leave the euro and let the Germans and French have their own euro and grind each other down with austerity measures. The British are surviving with their pound sterling and Ireland and many other European countries survived for decades and centuries without the euro.
The euro can work, but sacrifices in the form of new ECB policies and new EU policies will need to be fast-tracked into place, the Irish have suffered enough austerity. I ask politicians one question – will you step up to the plate ?