SCANDAL - The Million Pound Government
Politicians'pensions are being improved; the wage bill for Ministers alone has topped £1m; it costs over £2,000 a day to put state cars under Ministers; the politics of degeneracy continues. By Gene Kerrigan
While preaching economic resstraint, the politicians have this year been rather quietly adjusting and improving their own pension rights. This improvement adds to an already scandalous structure of pay, pensions, expenses and perks. It is occurring at a time when the population as a whole is being told to make sacrifices in the interest of economic rectitude.
The politicians in Leinster House have two pension scales. One is for Ministers, the other for TDs. Ministers are eligible for pensions after only three years at the job. Depending on status and service the pension ranges from twenty-eight per cent to fifty per cent of salary. No matter what the age of the ex-Minister, no matter how many jobs, no matter how many inncomes he or she has, the "pension" is paid as soon as the Minister leaves office.
The other scale is for TDs. After eight years a TD qualifies for a pension equal to one-fortieth of salary multiiplied by years of service. Thus, a TD with eight years service who loses his or her seat tomorrow will get a pennsion of £3,595 a year for the rest of his or her life. This is paid regardless of the TD's age, number of other jobs or incomes. A TD with twenty years service will get £8,989.
The Contributory Old Age Pension, paid after a lifetime of work and conntributions, this year pays out £2,590.
Not content with this, the politiicians have noted that a TD with only five or six years service is not entitled to a lifelong pension for this sterling work. A politician who, for instance, serves one term and is then turfed out by the electorate as a useless waster will have no money-cushion to fall back on. There are moves afoot to remedy this before the next election.
Last month we acquired a letter from Public Service Minister John Bolland to junior Minister Nuala Fennell, telling her about the' changes. (Fennell says she made no query about her pennsion and got no such letter. We cannot explain this. However, we have confirmed that the information in the lettt. er is accurate.)
Boland's letter first says that Fennell will from December 14 qualify for a Ministerial pension of £3,156 a year. Decem ber 14 is the magic date on which others such as Michael Noonan and Gemma Hussey cross the line into that land where you have a pension for life. Noonan and Hussey will each get £5,033 of a pension should they lose office anytime after December 14. Fennell is 50, Noonan is 42, Hussey is 47.
The figures are not great. You have to have served eight or more years before you get £9,000 a year pension. But £3,156 or £5,033, while being far in excess of what old age pensioners and the unemployed are expected to live on, would make a useful addition to the normal salaries which politicians get. Such amounts would be more than enough, for instance, to payoff the mortgage on a second home in the country, if one so chose.
Not content with such perks, Boland's letter reveals that the pension scheme for ordinary TDs is being adjusted (and this benefit also applies to Ministers). The qualifying date for the TD's pension is being brought down from eight to five years of serrvice. TDs who lose their seats after five, six or seven years will be able- to retrieve their contributions - or opt to receive a pension at age 60. This pension is a rather generous one in comparison with, say, nurses .. Nurses receive an eightieth of salary for every year of service. TDs receive a fortieth.
The improvement of the pension scheme is a minor one, affecting the minority of TDs who are so obviously awful that they get the sack after one outing. That is not the point. The pay, pensions, expenses and perks which the politicians have assigned themmselves are already gross. The "attenndance money" which Dublin TDs get, in addition to their salary, just for turning up at the Dail, is as much as many unemployed people get to live on.
The order for the pension improveement has not yet been signed, but is being drafted. It stems from changes proposed in September 1983, when TI)s were "catching up" on pay rises.
Proinsias de Rossa TD, who has consistently exposed the scandal of Ministerial pensions, describes any moves to improve TDs' pensions as "ridiculous". The length of service required to qualify for a TD's pension "should be extended, if anything," he says. "There's no job I know of where you qualify for a pension after eight years."
Some weeks back, speaking to the Fine Gael faithful in Bray, Gemma Hussey reportedly described teachers' claims for pay increases as "immoral".
For the first time in the history of the state we are paying the thirty politicians who comprise the governn. ment over one million pounds a year in wages. The wage bill this year for these thirty - Taoiseach, Tanaiste, Ministers and Ministers for State - is £1,008,710. The wage bill for all 166 politicians in the Dail is in excess of B.4m this year.
The wage bill for the politicians has risen by 4.8% over last year. The preevious year it rose by 15%.
Although politicians' pay is linked to that of other public service workers their very high pay scales ensure that their cumulative percentage increases exceed those of lower-paid employees. Since the present government came into power at the end of 1982 politiicians' pay has outstripped that of other employees by about 4%.
In working out the following figures we have broken down the various rates of pay applying within anyone year and calculated the overall amount paid in that year. Therefore the figures are not crude wage rates but accurate breakdowns of the amounts which the people involved were actually paid.
This year, Garret FitzGerald receives £47,881 from the public purse. In 1984 he received £45,670. In 1983, the first full year of his government, he received £39,646. The percentage increase from 1983 to this year is 20.7%. The same percentage increase applies to Dick Spring and the various Ministers.
In contrast, the average earnings of workers in, for instance, the Transsportable Goods Industries in 1983 was £7,462. This year the figures are estiimated at £8,652. This is an increase of 15.9%. The disparity between the levels of income is striking, but even more so is the fact that the income of that employment sector has increased by 4.8% less than that of the politiicians since this government came into' office.
In brandishing its stringent fiscal policies this government promised often and explicitly that its rectitude would be tempered by compassion for the poorer sections of society. It hasn't worked out that way.
Those on Unemployment Assistance are among the poorest. In 1983 they got £1,433. This year they get £1;655. That is an increase of 15.4% over 1983, which is 5.3% less than the increase in incomes which the politicians ennjoyed.
The statutory minimum wage for agricultural labourers increased by 17.4% between 1983 and now, which is 3.3% behind the politicians, even, though an agricultural labourer gets this year the munificent amount of £5,081.
The public service consists of a multitude of occupations and it is exxtremely difficult to arrive at average earnings which have any meaning. From government and union figures we can tentatively arrive at an inncrease in income between 1983 and 1985 of 16.1%. It is certainly below the increase in income enjoyed by the politicians.
Old Age Pensioners in that period had an increase in income whIch was 4% less than the politicians' increase.
The first years of this decade saw a slowdown in the rate of pay inncreases for top politicians. Although 'TDs' wages moved up, government ministers deferred some increases in 1980. One increase was deferred for six months, another for two months. An increase due to Ministers in June 1981 was deferred for ten months.
Those were difficult days for poliiticians. Although some were earning four and five times the wages of the people whom they represented they were at the same time preaching poliicies of financial stringency. And they were doing so in volatile circumstannces, with power changing hands three times in less than eighteen months. Increases were tactfully deferred.
Once a govern men t had secured a. safe majority the politicians set about "catching up" with workers in the public service, manufacturing indusstries, farm labourers, pensioners and the unemployed.
Increases of 2%, 6%, 5% and 4.75% were rolled into one and in September 1983 the politicians achieved a great leap forward of 18.9%. The "catching up" with the great strides in income which the pensioners and farm labourrers had made ensured that by this year the wage bill for the thirty top politicians alone would top the million mark - and that the increases in their already well-cushioned standards of living would be proportionately greater than those of the poorer-paid, whose position they had promised to protect.
All of this is merely basic pay. It is the hidden extras that make the politician's job worthwhile.
The most costly of these extras is not very well hidden. Without much trouble it is possible to trip over a state car any night of the week on the south side of Dublin, quite often outtside a pub. Each Minister has one, they are also handed out to such luminarie as the Ceann Comhairle of the Dail and the Attorney General. They come complete with two drivers, free petrol and maintenance. Each one costs the taxpayer approximately £56,000 per year to keep on the road.
Such cars are allegedly supplied for security reasons, but this is merely a lie concocted by the politicians during the November 1982 election campaign when they were pressed about the exxtravagance of their modes of transport. The cars are used for domestic chores, personal comfort, electoral pursuits, social pursuits, and occasionally state business. In 1967 Garret FitzGerald suggested that the government create a small pool of cars which would be used strictly when necessary. Garret FitzGerald was elected to the Dail two years later and got his first state car in 1973. While most politicians plump for a Mercedes he prefers a Saab.
Leaving aside the cars allocated to the hangers-on and has-beens, we have calculated the cost to the taxpayer for cars for the fifteen cabinet ministers this year at £840,000. That is, to move these fifteen people around the place on any average day costs us £2,301. No amount of government business is §' transacted on anyone day which re- ~ quires £2,301 worth of road transport.
Ministers of State lost their state ~ cars due to public disquiet after one ~ too many state cars was photographed ~ sitting outside a pub. Instead, the mini-' Q ministers these days get cash expenses. An example of the kind of thing they can claim expenses for is given in a government handout which details mini-minister Ted Nealon's movements last Monday. To Leitrim at llam to "open;' a Day Centre. On to Sligo for 2.30pm to another Day Centre. Both Centres could open quite efficiently without a government presence - but both happen to be in Nealon's constiituency.
The previous day we saw an example of the "government service" to which state cars are put, with Dick Spring "opening" the Kerry Way Walk. Dick's Kerry seat is not as safe as it used to be.
Measures brought in by this governnment ensure that in any normal emmployment, cars provided for employees are credited as benefit-in-kind and that benefit is taxed. This does not apply to politicians.
Those who are temporarily out of office do not get state cars' (unless they are ex-Ministers for Justice or ex-Taoiseachs). Instead, they get pennsions, to top up their wages.
Fianna Fail's David Andrews reecently defended these pensions in an article in the Sunday Tribune, claiming that they are not really pensions but perks for brilliant people who would desert public service and make their fortunes in the private sector if they did not receive these little backhanders. Andrews is aged 49. During the 1970s he held two minor government posts for a total of five years for which he was well paid and in which he was driven around like a lord. He receives £ 1 7,726 this year as a TD. He is also a practising barrister, a job which is worth a bob or two. He also receives £3,904 a year as a "pension" for his government service in the 1970s. This "pension" is more than an old age pensioner gets, it is more than twice the amount a person on unemployyment assistance gets to live on.
Another politician turned barrister-cum-pensioner is Michael 0 'Leary. O'Leary is also 49. His contribution to government service was somewhat more substantial than that of Andrews, but again he was well paid for it. On top of his £17,726 for being a TD (and 'd in addition to his barristering) he gets a "pension" of £7,356. This is four and a half times the income of someone on unemployment assistance.
When Martin O'Donoghue lost his Dail seat in 1982 he was quoted in the Irish Press as saying that he would not bother standing for the Senate as he couldn't live on the £8,000 a year wages (it is now £10,000). For his brief stewardship of economic affairs (in a period during which, most econoomists agree, the economy slid downhill at an astonishing rate) he now receives a "pension" of £4,976, precisely three times the income of someone on unemmployment assistance. He also works as a consultant and as a professor in TCD. He teaches economics. Dr O'Donoghue is 52.
Charlie Haughey gets £13,613 of a "pension", for fear he might run away to the private sector. This brings his income from the taxpayer this year to £31,339. He is also allocated £181,215 to help with the expenses of being leader of the opposition. (FitzGerald. and Spring get £50,740 and £21,746 respectively to help them meet the ex-' penses of their onerous positions.)
The man who is above politics, Paddy Hillery, gets £65,245 for being President (plus room and board, state car etc), plus £6,568 as a "pension" for past endeavours.
Unlike everyone else in the counntry, the politicians have a "special relationship" with the revenue commmissioners." A portion of their Dail salaries is tax-free. This is to help them with expenses for such pursuits as sending wreaths to constituents' funeerals, buying raffle tickets, phoning civil servants· to complain about connstituents' overdue drainage grants, and similar chores necessary to ingratiate themselves with the electorate.
The "special" arrangement which TDs have for their tax is something which developed over several years. The TDs were allowed an increasing percentage of tax-free income to commpensate them for "expenses", although they have an enviable expenses struccture built in to the job. In 1983 this percentage rose to 50%. There it has staved, being 50% of the salary they then enjoyed, £13,802. So, of their current salaries no less than £6,901 is tax free. Since this would be taxed in most cases at 60% it represents a gain to the TDs of, £4,104. Therefore, their pay this year of £17,726 is the equivalent of £21,866.
Ministers get this tax allowance on that part of their wages which they get for being a TD. They get an addiitional tax allowance on the ministerial part of their wages, but the extent of this is kept secret.
There are also subsidies for food, free post, free secretarial assistance (not just for Dail duties but for elecctoral support).
One worker paying £5,000 a year , in tax can support three people on unemployment assistance. But it takes 20'l workers paying £5,00b a year each to pay the wages of just thirty Government Ministers. Another 168 v.;orkers must each pay £5,000 a year to 'provide free transport for the fiffteen cabinet ministers.
The fact that the politicians take five months holidays, work an average eighty-seven days a year (the rest of the time spent doing constituency work is for electoral purposes and is not part of a politician's official work), that there is a backlog of legislation, that the crippling of the economy can be traced directly to the policies of these same' politicians - all of this makes the high salaries even more questionable. But central to all of this is the fact that since this government came to power politicians' wages have increased at a rate beyond the inncreases given even to the poorest in society.
In the face of economic chaos there have been no radical or imaginative proposals, merely calls for "sacrifices":
And there have been sacrifices aplenty, in wage freezes, wage cuts, redundanncies. In one sector, the politicians, there have been no sacrifices. On the contrary, the gap between their living standards and' those of the people whom they represent has grown in the lifetime of this government.
Over the past few years, faced with public annoyance at their behaviour, the' politicians have responded with homilies against "cynicism" and have called for trust. Probably the most naked display of cynicism came during the 1983 Euro election campaign, at a Fianna Fail press conference. Charles Haughey was asked in the simplest terms if FiannaFail would support moves within the European parliament to halt the abuse of expenses. Would Fianna Fail support measures to' ennsure 'that MEPs could not claim ariy more expenses than they actually, inncurred? Haughey said no, they wouldn't, and his front benchers nodded their heads in agreement. No other Irish party has said different. '
Political commentators are agreed that whatever the divisions within the present government there is no chance of the government falling before Deecember. That is when the Ministers, after three years service, 'qualify for their backhanders and we get another generation of "pensioners" to support well into the next century. '
SElECTED INCOME LEVELS UNDER THE PRESENT GOVERNMENT
1983 (£) 1984 (£) 1985 (£) Per Day 1985
Garret FitzGerald 39,646 45,670 47,881 £131.18
Dick Spring 33,073 38,099 39,946 £109.44
Charlie Haughey 25,964 29,858 31,399 £ 86.02
John Boland 31,103 35,829 37,566 £102.92
Georqe Birrninqharn 23,872 27,499 28,835 £ 79.00
Average worker in the 7,462 8,371 8,652 £ 23.7'0
Transportable Goods Sector
Receiving Unemployment 1,727 1,873 1,995 £ 5.46
Benefit
Receiving Unemployment 1,433 1,554 1,655 £ 4.53
Assistance
Contributory OAP 2,219 2,427 2,590 £ 7.09
Non-Contr ibutorv OAP 1,899 2,077 2,217 £ 6.07
Farm Labourer 4,325 4,835 5,081 £ 13.92
Paddy Hillery - - 71,813 £196.74
Neil Blaney - 44,409 £121.66
Michael O'Leary 25,082 £ 68.71
Average TD 14,672 16,901 17,726 £ 48.56
NOTE: Figures for average workers are hooelesslv compromised bv differentials between industries and between males and females. The average figure given is at best an indication, drawn from various sources, for comparison. Figures for politicians underestimate real income as some have other incomes from their
reel jobs and the various expenses which they receive and on which thev make a profit are not included. They also get "attendance monev " for turning up for work, in addition to wages. Figures for politicians are wages received, allowing for changing wage rates.
Sources: Departments of Public Service, Labour, Agriculture, CSO, LGPSU, ITGWU. •