Tag Archives: reform

Running for the Seanad

records-seanad2So, I had been asked by some people to consider this, in the upcoming election. Run for the university seats, they suggested. These were people I respected, from non-party backgrounds. Some were active in elected politics, others not. They made a persuasive case (but then, some are in the political world). I thought about it, took soundings and explored some ideas. I have made a decision about running.

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The Troika couldn’t reform us…why do we think we can?

This is an expanded version of a column published in the Irish Examiner on 14 December 2013. A couple of news items this week caught my eye. One was that we seem to have an excellent civil service; only 99% of those evaluated by their managers were deemed to be performing at the lowest level, unsatisfactory. The second was the leaked (gosh, what a surprise that is now, not) draft report of the troika as they head out the door ; a lot done, more to do as Digout Bertie told us. But will what is needed get done? Or will we the people get done?

Together these spell problems.  We have, despite the significant reforms and changes, and despite the bringing of the state finances into broad structural balance, failed to use this crisis for significant reform of how we run the country. Speaking on Prime Time this week Megan Greene noted that from her outsider perspective she found it hard to point to any significant reforms.

Cutting spending is not reform. It might lead to reform or it might lead to retrenchment and resentment.  Reform is changing how we do things as well as the things we do. As a country we are a serial economic delinquent – so why would we imagine that an essentially unreformed governance structure would result in us avoiding another mess in a decade or so? The government will say that there must be no going back to the way things were. Government say lots of things, usually failing to implement them. The history of Irish governance is weighed down with reports, memoranda, agendae for change that remain unimplemented. Think of the crying need for electorate of the Seanad- it has taken decades for that to become a real political issue,  decades since the people voted for reform, and there is still no certainty that we will have a reformed electorate for the 2016 election.

Insanity, they say, is doing the same thing again and again expecting a different result. Perhaps doing things in the same way again and again is also insanity. We have not fundamentally reformed how we as a state manage.

Take the 99% issue. This arises from a creature called the Performance Management Development System, where people are evaluated for their work.  There are massive problems with this. First and foremost, it is pointless in the present system. Designed to allow managers to determine who should or should not get promotion or increments, it is a creature of a radically different economic era. Where there are no promotions, and where the crude embargos on recruitment have resulted in people topping out at the top of a scale, there is neither sanction nor reward from the outcome of the evaluations. The system is meaningless, serving only to consume paper and excrete facile headlines. It is therefore treated with the contempt that it deserves.  The reality is that until we provide public sector managers with both the power and the responsibility to run their organizations such meaningless paperwork will proliferate. Power would imply the ability to reward and sanction ; responsibility would imply that at a senior level your on a contract and subject to defined output and quality standards, persistent failure to meet which will, if it is your fault, result in removal. To do this would however be anathema to powerful players.

The most powerful players who would object to this may not be the public sector unions. They would be the loudest but their teeth are mostly drawn. When looking at changing something in the public sector we need to ask not Cui bono but Cui plagalis – not who gains but who loses. Who loses when power is delegated – the central civil service, the micromanagerial mandarins of Merrion street, clustered in the two halves of the department of finance. We may talk about the power of the lawyers lobby but these grey men, let us not forget, showed how powerful they were when they simply refused to allow themselves to be part of the first round of pay cuts, way back when. They rule – not the passing parade of ministers and advisors. They rule but do not manage. We see time and again how ministers enter into office with ideas and ideals, to run into the sands of Sir Humpheryism. Ground down by the endless machinations they eventually get housetrained and become agents of inertia. Mandarins decide in the long term what gets done. Ministers tweak and mouth these decisions. The days of a minister being brave enough to do a Donagh O’Malley and go right against advice to do what they genuinely think is right and proper are long gone.

The simplest, but least effective, way to reduce government spending is how the mandarins have elected to do it – to introduce blanket cuts and blanket embargos. It is much easier to say “everybody (apart from us) down 10%, do the same” than it is to manage. Management means measurement and it means decision-making. Mandarining by contrast means blanket cuts and avoiding the hard, grinding, intellectually challenging issues of devising with staff the appropriate metrics of performance while at the same time keeping things going.  We need ministers who will force mandarins to manage, rather than what we seem to have had, mandarins molding ministers to malleable mediocrities.

This plays to the second issue –the draft troika report. Throughout their hegemony they have stated time and again that a number of key areas remain untackled. Chief amongst these are the power of the medical and legal professions that remain essentially unreformed. Cui bono is clear – cui plagais is also clear, the taxpayer and the  citizen.  Meaningful reform of these areas would cost little in terms of either political or financial cost but would and has run into the sands of mates rates and the complex toxic network of micropolitics. Even the Financial Times, which has generally cheered on this government, has looked askance at this lack of reform, blaming it simply on

It is not just in these areas that we have failed to reform. We suffer daily from a profound lack of joined up thinking. We have vastly overcomplicated delivery of emergency services; we have a patchwork of state, voluntary and charitable health services where people die in the cracks; we have no clarity as to where the third level system is going; we have no evidence of joined up thinking regarding our dearth of language skills; we have decided to run a national water authority alongside existing patchwork county based delivery for 12 years rather than 12 months; we have no clear view on how to deal with the banks beyond hoping that they will go away; we have not learned the lessons of our fixation with credit led real property with this government increasingly seeming to pin its hopes for the future on another boom therein; we have a capital city where quite literally the trams dont join up and so on .  The troika could not reform us ; it is beyond credibility that we will reform ourselves.

Im thinking of voting to retain the Seanad

Its strange to find oneself on the same side of a political argument as Fianna Fail. That’s now where I find myself with regard to the referendum to abolish the Seanad.

As an exercise in sheer political cynicism this referendum is hard to beat. Conceived by all accounts in a rush of political blood to the head to fill an empty season it sees parties engaging in volte face after volt face, playing ducks and drakes with the constitution for momentary political gain.

Fianna Fail say no to abolition. Having been in power since approximately the Jurassic period, they have over the years stuffed the Seanad with more political dinosaurs than one would find in a box set of Jurassic park but they now profess a desire for reform.

Sinn Fein were in favour of reform but are now against. I think.

Labour were also in favour of reform as late as 2009 producing a good piece on how this could be achieved.

There are many many reasons to abolish the Seanad. Forget the money for a moment – a working democracy requires politicians who can live on the wage, and who are well supported in terms of administrative and other capacity. Nobody seems to know how much it costs nor how much abolition will save.

Most people dont know who is in the Seanad. Just the other day I heard that Susan O’Keeffe, a really excellent journalist whom I had noticed had gone off the media, was in fact a S enator. Who knew. There are many many senators who pass through the chamber without troubling the world as to their existence as to senators. One whom I will not mention I was certain of as having died these many years past.  But many others, notably the university senators, are active. They do their job as legislators in bringing legislation to the floor. It is the government that as a matter of routine votes it down even when agreeing with it. This last year we have seen the following acts brought

  • Business Undertakings (Disclosure of Overpayments) Bill 2012 Ronan Mullen
  • Employment Permits (Amendment) Bill 2012 [Seanad] Fergal Quinn
  • Financial Stability and Reform Bill 2013  – Sean Barrett
  • Food Provenance Bill 2013 – Fergal Quinn
  • Mortgage Credit (Loans and Bonds) Bill 2012 [Seanad] Sean Barrett
  • Protection of Children’s Health from Tobacco Smoke Bill 2012. John Crown
  • Public Health (Availability of Defibrillators) Bill 2013 Fergal Quinn
  • Reporting of Lobbying in Criminal Legal Cases Bill 2011 John Crown
  • Seanad Electoral Reform Bill 2013. John Crown
  • Seanad, Bill 2013 [Seanad] [PMB] – Katherine Zappone and Feargal Quinn
  • Upward Only Rent (Clauses and Reviews) Bill 2013 – Fergal Quinn

Then there are the bakers dozen that the Taoiseach de Jure can appoint. Three words suffice to show how this works – Senator Eoghan Harris. But then there is Katherine Zappone.

It’s a rotten borough – leaving aside the university senators (and successive governments of all hues have refused to implement the 40 y old constitutional amendment to allow all graduates to vote leaving that franchise even more stunted and still the most representative)  and the taoiseachs nominees, they are elected by panels of county coucillors and a hodgepodge of other bodies on “panels”.  See the bottom of the page for a list. A rotten borough however should not in and of itself preclude either the election of good people nor the abandonment of the idea of elections. Reform the electorate is an alternative to abolishing the election.

The main reason though, apart from the fact that abolishing it would concentrate even more power legally as well as factually in the hands of the cabinet (the Dail being as dead a letter as the Seanad when it comes to holding said cabinet to account) , the Government seem not to be convinced. They refuse to put forward the man who thought this up, An Taoiseach, to debate. This is either an arrogant belief that it doesnt merit debate, or a feeling that the grounds given are sufficiently weak that even Michael Martin might shred them.

So, i’m thinking of voting to retain – that way we can at least debate reform having told the government we don’t want to be bounced into this. If the system is irreformable, then fine. But lets try first.

 

  • Administrative Panel     7 seats
  • Agricultural Panel         11seats
  • Cultural and Educational Panel   5 seats
  • Industrial and Commercial Panel  9 seats
  •  Labour Panel  11 seats

List of nominating bodies

  • Administrative Panel
    • Association of Municipal Authorities of Ireland
    • Central Remedial Clinic
    • Enable Ireland Disability Services
    • General Council of County Councils
    • Irish Deaf Society
    • Irish Kidney Association
    • Irish Wheelchair Association
    • Multiple Sclerosis Society of Ireland
    • National Association for the Mentally Handicapped of Ireland
    • People with Disabilities in Ireland

Agricultural PanelAgricultural Science Association

  • Central Fisheries Board
  • Dairy Executives’ Association
  • Irish Co-Operative Organisation Society
  • Irish Grain and Feed Association
  • Irish Greyhound Owners and Breeders Federation
  • Irish Thoroughbred Breeders’ Association
  • Munster Agricultural Society Company Ltd
  • National Association of Regional Game Councils
  • National Executive of the Irish live Stock Trade
  • Royal Dublin Society (RDS)

 

  • Cultural and Educational Panel
    • Aontas Múinteoirí Éireann
    • Association of Secondary Teachers Ireland (ASTI)
    • Bantracht na Tuaithe
    • Comhairle na dTréidlia
    • Comhaltas Ceoltóirí Éireann
    • Comhar na Múinteoirí Gaeilge
    • Comhdháil Náisiúnta na Gaeilge
    • Cónaidhm Éireannach na Múinteoirí Ollscoile
    • Conradh na Gaeilge
    • Council of the Bar of Ireland
    • Cumann Gairm-Oideachais in Éirinn
    • Cumann Le Seandacht Átha Cliath
    • Cumann Leabharlann na hÉireann
    • Dental Council of Ireland
    • Drama League of Ireland
    • Gael-Linn Teoranta
    • Gaelscoileanna Teoranta
    • Institute of Community Health Nursing
    • Irish Dental Association
    • Irish Georgian Society
    • Irish National Teachers’ Organisation
    • Irish Playwrights’ and Screenwriters Guild
    • Law Society of Ireland
    • Medical Specialists Limited
    • National Youth Council of Ireland
    • Pharmaceutical Society of Ireland
    • Royal College of Surgeons in Ireland
    • Royal Irish Academy
  • Royal Irish Academy of Music
  • Royal Society of Antiquaries of Ireland
  • Údarás na Gaeltachta

 

  • Industrial and Commercial Panel
    • Association of Advertisers in Ireland
    • Chambers of Commerce of Ireland
    • Chartered Institute of Logistics & Transport in Ireland
    • Construction Industry Federation
    • Cumann Aturnaethe Paitinní agus Trádmharcanna
    • Electrical Industries Federation of Ireland
    • Institute of Advertising Practitioners in Ireland
    • Institute of Bankers in Ireland
    • Institute of Certified Public Accountants in Ireland
    • Institute of Chartered Accountants in Ireland
    • Institute of Industrial Engineers
    • Institute of Professional Auctioneers & Valuers
    • Institution of Engineers of Ireland
    • Insurance Institute of Ireland
    • Irish Architects’ Society
    • Irish Auctioneers and Valuers Institute
    • Irish Business and Employers Confederation
    • Irish Computer Society
    • Irish Country Houses and Restaurants Association
    • Irish Exporters Association
    • Irish Hardware & Building Materials Association
    • Irish Hotel and Catering Institute
    • Irish Hotels Federation
    • Irish Planning Institute
    • Irish Road Haulage Association
    • Irish Tourist Industry Federation
    • Licensed Vintners’ Association
    • Marketing Institute of Ireland
    • Marketing Society Limited
    • National Off-Licence Association
    • Restaurants Association of Ireland
    • Retail, Grocery, Dairy and Allied Trades Association (RGDATA)
    • Royal Institute of the Architects of Ireland
    • Society of the Irish Motor Industry
    • Vintners’ Federation of Ireland
    • Wholesale Produce Ireland

 

  • Labour Panel
    • Irish Conference of Professional and Service Associations
    • Irish Congress of Trade Unions

Getting to the Hartz of the Irish unemployment problem

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Earlier this week I chanced to listen to an interview on the Pat Kenny show. Pat interviewed the Minister for Social Protection, Joan Burton, about reforms and unemployment etc. We have a major problem with unemployment in this country and so any reform is worth looking at if it can assist in solving this issue.

A few things struck me.

First, there was very little discussion of the role of aggregate demand. The minister did note that lots of the unemployed were such consequent to the collapse of the housing bubble. But the ongoing flatlining of the domestic economy was scarcely mentioned.

Second, and flowing from this, much of the debate was on supply side elements. The minister referred time and again to the german (and austrian) experience. When it was noted that these countries were not suffering recession (low aggregate demand) the response was a confused agreement – yes but they have good labour market supply side policies. To my ears this came across as a thinly disguised eulogising of the Hartz reforms.

the Hartz reforms consisted of two elements : a radical shakeup of the state support services, in effect merging and streamlining job agencies, welfare offices, job centers etc and a significant push to force people to take jobs regardless. The first element is surely uncontentious- streamlining and making it easier for people to find any posts that might exist is a good thing. The second however needs debate. It amounted to a significant cut in the payments to the longterm unemployed and a gradual shortening of the period of unemployment benefit.

the premise of the Hartz reforms was that the basic economic environment was, for Germany, benign. There were, it was argued, jobs there for the longterm unemployed BUT the social welfare rates were such as to discourage people taking these.

So what was the effect? A recent IMF paper summarises the finding of research on the issue. While the reforms improved the lot of the employed, it made the situation of the unemployed worse off. It did reduce the longterm unemployment rate by a small amount. Other research supports this overall finding.  Further research suggests that the package of Hartz reforms led to an increased substitution of (especially less skilled) full time work by parttime work. Finally, much of the gain appears to come from increased efficiency in matching – in other words the first part of the reforms, improving communication. Finally, Germany has no minimum wage – the resultant wage moderation and other unique features such as hour banking also matter hugely.

So, if we are going to go down the Hartz lines, lets have an open debate on this. By all means lets see a (labour) minister cut the longterm unemployment payment, in the hope that they will find jobs that are there to be found with the aid of an improved welfare office. But lets not think that this is going to be painless and lets also recall that these reforms worked for Germany in large part by making the domestic economy worker cheaper and more insecure while the economy as a whole powered ahead under an export engine. We need to be very cautious about replicating this in an environment where our exports are….fuzzy.

Thoughts on public sector sickpay

So the labour court has agreed that the government can adjust and cut the sick leave allowances of 300,000 public servants. The old “allowance” was 7 uncertified sick days per a mum and this will now be reduced to the same per 24 months. Also the time on full pay will be cut from 6 to 3 months and same for half pay.
We’re told that the total sick pay bill comes to €500m (out of €14,000m) and that thus this will save €250m. The reforms are welcome but will they in fact save that? It seems to me several issues need to be noted. First, of the total the vast majority was for certified sick days only some €60m being for uncertified sick days. So we might save 30m here IF and only IF people were malingering and taking sikies to which they were not entitled.
Second, when people go from full to 1/2 pay (as they will do now more swiftly) they will in many cases get some social welfare. So while the sick pay element of aome €440m will fall the social welfare bill will rise by an unspecified amount. Some data on that would be nice.
Third, much gloating and pointing has been evident from the usual suspects on this issue. The typical cry is “lookit – all them lazy gits in the public sector on the sick”. One wonders what the comparative figures are for comparable private sector posts? Perhaps 3.5% of the overall budget is not unusual? Or Maybe it is. Comparable data again would be nice.
Fourth we need to compare like with like. A breakdown of this pay bill by sector would help. Defense and policing are inherently physical jobs where the chance of serious injury (and thus sick pay) is significant. Health sector frontline workers face similar issues with the added exposure to all sort of sicknesses. Again, a higher level of sickness than the workforce at large is inevitable.
The changes are welcome but let’s not get carried away either with the levels of sick pay or the savings. Not that that will stop those for whom the public sector represents a bottomless pit of sloth…

Stabilizers

Ok..this is going to annoy everyone I suspect…

One of the things that strikes me about the debate in Ireland is the fundamental misunderstanding that exists about the public sector.

There is a large constituency of people who exhibit tendencies in their discourse that suggests that any wage over zero is too high – these are the die-hards whose discourse is a toxic mixture of ideology jealousy and half remembered catchphrases gleaned from too much Fox News. Small government via starving society of essential services or else making the workers therein so impoverished that they are amenable to bribery works so well in so many places…

There is another large, overlapping but discrete, group who suggest that while of course the government should have a role in the economy it should confine itself to capital and not current spending – far be it from me to suggest that many of these are private sector rent seekers who will cheerfully take the government (taxpayer) cash and spend it on whatever madcap idea has come to mind by a an unholy combination of bureaucrats chasing what they think is going to make ireland rich and vested interests seeking warmer vests, regardless of how low the total ROI will be

Then there is a group, again discrete, who urge us to “scrap croke park” (a football stadium cum conference center and also a totemic 2009 agreement between the government and public sector unions to keep nominal wages uncut in exchange for productivity and other gains), regardless of the fact that such cuts a) will, given higher fiscal multipliers in recessions, exacerbate an already bad domestic demand position, b) will in any case be utterly incapable, the downstream effects of a) ignored, of making a massive dent in the deficit and c) will result in a massive industrial relations mess.

Finally, we have the public sector unions, now moderatly cowed but who have over the years taken advantage of the supine and spineless political system to extract massive rent. Most public sector union leaders in Ireland have beards, for some reason.

I spoke recently to a representative of the first/third group, who urged me to brace for a 40% pay cut “like the private sector has had” via the immenent (wished for?) scrapping of the agreement. Hmmmm. Not quite true… Here is a graph of public/private sector average hourly wages and total employment over the last while. One of the things we want, those of us who dont deem all public servants inherent spongers (or is that the people on welfare? cant ever remember) is that government act to stabilize and smooth out the economic cycle. You dont have to be an unreconstructed keynesian (or even Paul Krugman) to think that smoother cycles are perhaps preferable to more jagged ones.

Both Public and Private wages have remained remarkably constant, or it would be remarkable if we didnt recognize that nominal wage rigidity (the empirical fact that people usually dont get/take/accept reductions in nominal wage packets) is the norm even in distressed sectors.   We also see that the government employment total has declined slowly – taken together this is what we would WANT to see, that government act to keep its injection into the economy smooth. Of course this is not, for the more thinking and conscious, a problem (for the reflexive “small government is good and therefore smaller is better so zero must be optimal” merchants this is a heresy) and acts to ensure that the government is doing its job.  The adjustment in ireland has been in the fall in private sector employment. But it has not been in private sector wages.

The problem in Ireland lies in the fact that there is a significant wedge beween public and private wages. Normal economics would suggest that , all other things being equal, having a permanent defined benefit pensionable job would allow people to take lower wages than those in comparable employment who have less security of tenure and less certain pension. But the opposite is the case here, as over decades governments bought industrial peace and election by generous wage increases.

A significant part of the wedge in pay (lets table the pension issue and how much that would cost to fund) can be explained by on average higher qualifications and greater experience in the public sector. While the government have announced new lower pay scales and less generous pensions for new public sector entrants , it is not clear that they can or should or will do anything for those (like me) who are already in the system. Amongst other things while there has been significant forbearance in relation to industrial relations cutting nominal pay would result in this evaporating. There would be legal difficulty and the certainty of challenges in moving existing pensioners or even those with a reasonable expectation of their pension entitlements to a less generous system, and at least in the university and internationally tradable sectors of the public sector we would face an accelerated brain drain.  And yes, there is one of those – right now it is hard to hire lecturers in Ireland, paying at the bottom of the scale which overlaps with the UK pay scales. It might come as a shock to UK academics but their prospects are positively rosy in comparison to here.  And of course removing several billions at one fell swoop from the pay bill will not magic jobs up for the unemployed but will instead add to their numbers (larger negative shock multipliers are so nasty), while also adding to the hole in the (state owned, supported and money absorbing ) banks from foolish mortgage lending.

Its a mess – there are no simple solutions and no lack of simplistic ones.

What if Ireland Defaults?

Well, if you want to know the answer to that question you will have to buy my new book, which contains a bunch of essays.

Contributors include:

  • Nobel Laureate Joseph Stiglitz
  • Constantin Gurdgiev, Megan Greene, Seamus Coffey and  Stephen Kinsella
  • Peter Mathews TD
  • Senator Sean Barrett
  • businessman and political activist Declan Ganley
  • politics lecturer and journalist Elaine Byrne
  • Sam Roberts, urban affairs correspondent for the New York Times
  • Huginn Thorsteinsson, philosopher and adviser to the Icelandic Minister of Economic Affairs and the Icelandic Minister of Fisheries and Agriculture
  • John Walsh, editor of Business & Finance
  • Peter Brown, director of the Irish Institute of Financial Trading
  • Karl Deeter, director of Irish Mortgage Brokers

Aimed at the general reader and published by Orpen Press it is available from all good bookstores and from Amazon.  An ebook/kindle version should be available by 6/April/12