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News : Irish Economy Last Updated: Feb 4, 2011 - 8:06 AM


Irish General Election 2011: Dublin Chamber calls for “root & branch” public sector reform; Silent on reform of protected private sector
By Michael Hennigan, Founder and Editor of Finfacts
Feb 3, 2011 - 5:17 AM

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Dublin's Ha'penny Bridge

Irish General Election 2011: The Dublin Chamber of Commerce today calls for “root & branch” public sector reform but has nothing to say on the protected private sector, where professions are significantly supported by public funds.

All political parties contesting the election have been asked today to respond to a select number of pro-business measures proposed by the Dublin Chamber of Commerce to help existing enterprise survive and grow, to promote entrepreneurship and to create jobs.

The chamber says the abolition of upward only rent reviews, modernisation of bankruptcy laws, and “root & branch” public sector reform must be part of the next Programme for Government, according to Dublin Chamber.

The reason why there is little momentum for reform in Ireland despite national bankruptcy, is because the dominant vested interest groups from the Left to the Right of the spectrum, have an interest in maintaining the status quo and protecting existing privileges.

The philosopher-economist Adam Smith, the author of the 1776 book, The Wealth of Nations, would have termed it a 'tacit agreement.'  

Of course, public sector reform is long overdue and is proceeding at the speed of a glacier.

However, it's also relevant to repeat the point out that multimillionaire tribunal lawyers are continuing to make hay as public contractors; medical consultants can charge over €200 for a 15-20 minute consultation; an insolvency firm quoted NAMA €800 per hour for an assignment and was allowed hide behind a Victorian veil of secrecy; GPs in Ireland get paid €38.95 to administer the seasonal flu vaccine to patients. In the UK GPs get paid £7.51 (€8.30) for doing the same job and the State health insurer VHI has to hike premiums by as much as 45% to pay for featherbedding.

The National Competitiveness Council says that Irish medical consultants are the highest paid in the OECD area (comprising all the world's developed countries), earning almost double the salaries in countries such as Finland and Norway.

This week, the Oireachtas Public Accounts Committee published a report which shows that public bodies are the largest procurers of legal services in the State with an estimated spend of anything up to €500m.

The Committee said it heard evidence to suggest that the cost of legal services in Ireland is amongst the highest in the developed world and it has been suggested that the State itself is one of the primary drivers of high legal costs.

Overall, the report stated that the likely cost to the State of three public tribunals based on the pattern of costs experienced to date is estimated to be in the range of €336m to €366m.

The Committee also reported that five of the barristers working for the Mahon (Planning) and Moriarty tribunals earned in excess of €5m, with two of them earning almost €10m.

The Committee referred to "three senior counsel at the Moriarty Tribunal being paid €2,500 a day for an extraordinary 304 days in 2008. The Moriarty Tribunal sat in public session for an average of 20 days in each of the past three years. The report advised that there were no specific attendance records for the legal teams maintained at the Morris and Mahon Tribunals. The Moriarty Tribunal records attendance of tribunal legal team members but does not take account of arrival and departure times."

The Committee "was exercised to learn that at the Moriarty Tribunal, an extra €1m has been paid to counsel because of an error in the Department of the Taoiseach, where counsel have been paid a per diem rate of €2,500 instead of €2,250 and where the matter was allowed continue without rectification."

MORIARTY TRIBUNAL

Jerry Healy SC €9,490,181

John Coughlan SC €9,285,628

Jacqueline O’Brien SC €6,707,917

MAHON TRIBUNAL

Desmond O’Neill SC €5,279,311

Patricia Dillon SC €5,591,889

Patrick Quinn SC €4,975,377

PAC - Third Interim Report on the Procurement of Legal Services by Public Bodies - January 2011 (pdf)

This surely encapsulates the failure of Irish governance and the system that allows lawyers as public contractors to become multimillionaires in a small country, while in some cases investigating bribes lower than they themselves are getting paid per day.

One of the tribunal lawyers even claimed the cost of a chocolate bar of Toblerone from the State!

These wealthy people like their political masters, have got their gilt-edged meal-tickets for life while many of the victims of the failed system, remain invisible.

The Dublin Chamber of Commerce said on Wednesday that the measures included in the Chamber’s election manifesto, will be unveiled tonight at its AGM Dinner.

Imelda Reynolds, newly elected president of Dublin Chamber of Commerce, said: 
“The next Government needs a resilient business sector that will assist in rebuilding the economy and create employment. In order to grow and generate employment, business needs leadership in Government to affect change. The perception of Ireland as a so-called ‘Celtic Tiger’ built solely on an overblown construction sector must be changed. The growth of domestic and exporting trading businesses and employment is fundamental to this perception.”

These initiatives, which Dublin Chamber is asking each political party to commit to in the election campaign, include:

  • Reducing the costs faced by business by outlawing upward-only rent review clauses;- reforming the bankruptcy law to encourage entrepreneurship;
     
  • Pushing for the broadening of the Business Expansion Scheme with the European Commission; and
     
  • Requiring NAMA to release property into the market to stimulate economic activity
In respect of root and branch reform of the public sector, the Chamber said required reforms include:- improving productivity in the management and operation of the public sector and the greater use of outsourcing;

- taking a pro-active approach to privatisation; and

- creating an executive Mayor for Dublin, who is responsible for the cost effective delivery of local services.

To assist the next government in delivering on these proposals Dublin Chamber is proposing the establishment of an Enterprise Advisory Council, made up of leading business people, to offer Government practical advice on public policies and projects which will lead to the development of an enterprise focused Programme for Government.

The Chamber has also called for a commitment from the next government to invest in key infrastructure projects to ensure that Dublin is an attractive and competitive location for business. This includes the swift delivery of the DART underground and Metro North, sustained investment in next generation broadband, a second run way at Dublin airport, an upgraded water distribution network, a waste to energy facility in Poolbeg and the delivery of the Grangegorman Campus.

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