Friday, October 23, 2009

SIPTU, there is no silver bullet for this mess

From the time that tongues first wagged and ears first listened, we have taken comfort in proverbs and myths that serve our self-interest. Caught in the seductive flow of a narrative, it is easy to close one’s eyes to reality. After all, this is how any great story works.

I can hazard a guess as to the name of SIPTU’s favorite story: the biblical tale of David and Goliath. And what a great story it is. You’ve got the underdog, his heroic battle against the big bad bully, and his unlikely triumph. This seems to be how SIPTU sees the current backdrop of inevitable public pay and service cuts. Two weeks ago, SIPTU President Jack O’Connor complained the ERSI were cheerleading for the Government’s policy of placing the entire burden of fiscal adjustment on working people and the less well-off, whereas the wealthy are insulated from any requirement to contribute at all. This is simply fictitious, populist claptrap.

Does a six per cent income levy on gross income constitute no requirement to contribute? And since when has anyone advocated cutting low-end salaries and leaving the top-end alone? The fact is that in 2008 the 6.36 per cent of all earners who earned over €100,000 paid 42.5 per cent of all income tax the State collected. That figure is likely to be even higher since the April Budget. Starting at the top, whether it be through wage cuts or higher taxes - a less economically produtive option - is undoubtedly the right approach, but fiscal reality dictates that cuts cannot stop there. SIPTU, however, seem unable to accept this.

Myth

“Ordinary” workers (an incredibly vague phrase thrown about frequently) will have to pay because the vast majority of Irish people are just that: working or middle class. Therefore, it makes sense that savings will have be made there.

There is no elite group can be taxed enough to generate the €500 million we are borrowing every week. Simply, there is no painless silver bullet to fix all our woes. SIPTU are playing a divisive and cynical game by exploiting class resentment, and they are damaging the chances of the public ever pulling in the same direction by furthering a myth that cuts are avoidable. Not only that, they are actually seeking a pay rise for its members and threaten a day of action if this demand is not met.

But tell me, Mr. O’ Connor, who should pay for your members to have their pockets padded a little more snugly? Because the country doesn’t even really have the money it is paying out in wages right now. Should those on social welfare? No, no, you said that cutting there would be an “obscenity”. How about the schools and hospitals? No, you couldn’t condone that.

Well, perhaps the IMF might be of help. Because if the tough, unpalatable action you resist so strongly isn’t taken soon it might be the IMF holding the cheque book.

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