Independent reports that the prospect of the Croke Park deal being backed by
public servants has been dealt a major blow due to "paltry" cuts to top
State employees earning over €65,000 a year face cuts of up to 10pc in their
pay, but the highest cut for retired staff is just 5pc. Unions were led to believe that the cuts to the best-paid pensioners, including
former Taoisigh Bertie Ahern and Brian Cowen, would be much deeper.
Brendan Howlin's Department of Public Expenditure and Reform argued that those
on pensions over €32,500 will take cuts that are roughly half the pay cuts being
suffered by staff. This is because their pensions are worth half their final
But former senior politicians, and civil servants like Dermot McCarthy, whose
€713,000 retirement package caused outrage, enjoy much bigger pensions than
current staff will get.
This is because they retired before pensions were hit by cuts to reflect a
previous public sector pay cut, which came into force after February last year.
Unions were promised there would be a substantial cut for the top pensioners.
They believed this would help them sell the new deal to members.
The pension cuts, which will reduce Mr Ahern and Mr Cowen's €150,000-plus
pensions by €7,500, were revealed by government officials on Tuesday night. They
said it would "mirror" the pay cut.
They said the cuts would be in the region of 2pc to 5pc on salaries over
€32,500, with the 5pc cut expected to apply to pensions over €100,000.
The extent of the pension cuts is not mentioned in the final document outlining
the proposed new Croke Park deal, although they are promised.
It says the Government intends to "align" the pension reduction with the pay cut
applied to serving staff. It adds the measure will apply to pensions greater
"Public servants think this minor adjustment to pensions in no way reflects
what's happening on the ground," said CPSU leader, Eoin Ronayne.
"This is not a big hit. It's small beer for people on the big pensions. Our guys
can only look on in envy at people on pensions of €32,500 or more. The measure
is insulting to people on low pay. It is offensive."
He said the only acceptable cut to a pension of over €150,000 would be in the
region of €20,000.
Other union leaders were reluctant to publicly condemn the pension cuts, but
admitted they were "miffed".
"This is an issue of fairness," said a senior source. "Top politicians and civil
servants are taking minimal pain on pre-austerity pension deals. It was clearly
indicated to the negotiators that they would face a big hit, but these are
A key union negotiator also told the Irish Independent they believed the pension
cut at the top would be "much steeper".
General Secretary of the Association of Higher Civil and Public Servants, Dave
Thomas, said he had been contacted by members who want to know exactly what
pension cuts will apply, but the department has not formally issued details.
The union, which traditionally backs national agreements, has recommended a 'no'
vote on the Croke Park deal to members.
It represents over 2,700 higher-paid civil servants who face pay cuts as well as
a three-year increment freeze, as they earn more than €65,000 a year.
The Department of Public Expenditure said the thresholds at which the pension
cuts would apply had not been decided.
It previously introduced a 20pc tax on pensions over €100,000, but those with
multiple pensions avoided the cut if their individual pensions were worth less
Former ministers, including Charlie McCreevy, Dermot Ahern, John O'Donoghue and
Mary Harney, escaped the tax because of the loophole.
The Irish Independent also reports that the number of
people working has risen for the first time in five years.
New figures reveal promising signs in the labour market as the numbers out of
work have dropped and long-term unemployment is also falling.
The latest Central Statistics Office report shows that the numbers working
increased by 1,200 to 1.848 million in the final quarter of 2012.
That's the first annual increase in employment since early 2008.
And the unemployment rate has also fallen and now stands at 14.1pc compared with
a high of 15pc this time last year.
Even more importantly, long-term unemployment is also falling – the numbers out
of work for over a year dropped by nearly 20,000 in the last year to 176,400.
That brings the long-term unemployment rate down from 9.1pc to 8.2pc, the
Quarterly National Household Survey shows.
Over the last year employment fell in the public sector, construction, transport
and industry, but rose in agriculture and fishing and in the information and
The public sector has shed 27,300 people over the last three years, almost 7pc
of its total, compared with 15,400 jobs in the private sector since 2009, or
1.3pc of its total employment.
There are now 428,876 people signing on the Live Register – which is over 10,000
less than this time last year.
And on a seasonally adjusted basis, the numbers signing on fell by 1,400 in
Jobs Minister Richard Bruton welcomed the improved figures.
"While the numbers today showing jobs growth in our economy for the first time
in five years are welcome, all in government recognise we have much more to do
to rebuild the shattered economy we inherited two years ago," he said.
The Construction Industry Federation (CIF) said that building jobs rose for the
second quarter in a row at the end of 2012 – the first time this had happened
since the boom.
The numbers were up from 99,600 in mid-2012 to 103,200, which CIF director
general Tom Parlon said showed a "tangible improvement in the fortunes for our
KBC Bank economist Austin Hughes said that the "surprisingly large drop in
unemployment rate reflects emigration, re-entry into education and retirement as
well as a slightly better jobs climate".
The 14.1pc unemployment rate was the lowest since autumn 2010 and is going in a
healthier direction than in many other euro countries.
Business group Ibec said the jobs data was "further evidence that the recovery
is firmly under way".
The Irish National Organisation of the Unemployed warned that though the drop in
long-term unemployment was welcome, there was also a 19,800 increase in the
numbers outside the labour force, suggesting some had become discouraged in the
search for work.
There's been a huge drop in the number of women engaged in "home duties" in the
last year, down from 521,000 at the end of 2011 to 491,000 now.
The pro-Catholic Church Iona Institute warned many of these women were being
forced to work by economic need.
"The sharp increase in the number of women leaving home for the workplace is
almost certainly due to the recession," said Maria Steen.
However, the figures indicate a much sharper rise in the number of women who
described themselves as retired.
Meanwhile, over 130 new jobs were announced for Dublin yesterday.
Guidewire, which provides software to the insurance industry, is creating 75
jobs at its offices in Blanchardstown, Dublin.
Ecocem Ireland, a cement company based at Dublin Port, also plans to create 61
jobs directly and indirectly in a new plant.
The Irish Times reports that
family-owned feed milling business Henry Good was placed in receivership
yesterday, brought down by a historic debt of close to €4 million.
The company, which supplies all kinds of
livestock feed in the domestic market, tried to resolve its cashflow problems by
seeking to cut costs while also trying to bring a new investor on board but such
moves proved too difficult to achieve.
The business, which is based in Kinsale, Co Cork,
and currently employs 50 people, will continue to trade as receivers Kieran
Wallace and David Swinburn of KPMG look to sell the business as a going concern.
Mr Wallace and Mr Swinburn were appointed as
joint receivers yesterday to the company which was established in the Cork town
In a statement, the receivers acknowledged that
“for many months, the directors of Henry Good attempted to restructure the
business, following difficulties with a significant debtor in the summer of
Last August, it emerged that Henry Good was owed
€3.9 million for chicken feed by Cappoquin Poultry in west Waterford, to whom
the Kinsale-based company had been supplying feed for years.
During a High Court hearing where Henry Good
successfully sought to have an interim examiner appointed to Cappoquin Poultry,
the court was told that the company’s debt to Henry Good rose from €346,000 in
December 2010 to €3.9 million in August 2012.
Henry Good had also been a supplier to Cappoquin
Chicken, Cappoquin Poultry’s predecessor which had gone into liquidation in 2008
owing it money.
In a statement issued on behalf of Henry Good
Ltd, the receivers yesterday acknowledged that it was a particularly difficult
day for the directors of the company given the business had been in the family
for over 80 years.
The directors thanked their loyal suppliers,
customers and employees over the years and, together with the receivers,
expressed confidence that a buyer will be found for the business and its assets
as a going concern.
‘Sad day for Kinsale’
Local historian Dermot Ryan said yesterday’s news
was a sad day for the town given the company’s long association with Kinsale,
with the Goods providing employment for generations of local people.
“Tom Good set up the mill in Kinsale in the 1920s
on the site of the old RIC barracks, where the car park is now, and he continued
there until the 1950s when a fire destroyed the building,” said Mr Ryan, a
former mayor of Kinsale. “But he rebuilt the mill and it continued to thrive.
“It’s a sad day for Kinsale because the Goods and
Kinsale are synonymous.
“They provided good employment over the years for
many families in the town, not just directly in the mill but also to hauliers
and so forth. Hopefully a buyer can be found and the jobs maintained.”
The Irish Times also reports
that State energy group the ESB will divest its 50 per cent stake in two
international power stations to fulfil a Government order to dispose of
Last October, the Government called on the energy
provider to dispose of €400 million in non-strategic generating assets by 2014.
The funds raised are to be paid to the exchequer as a “special dividend”.
Yesterday the ESB said it would sell its 50 per
cent stake in both the UK-based Marchwood Power and Spanish power station
In a statement, the energy provider said both
power stations “have been good investments for ESB”.
A spokeswoman for the ESB declined to comment on
how much the sale of its stake in the stations might generate, but it is
understood that Marchwood Power has a value of about €500 million, while Bizkaia
Energia cost €690 million to develop.
The ESB jointly owns – with Scottish Southern
Energy (SSE) – Marchwood Power, a 840MW power station in Marchwood, near
Southampton. It was constructed in 2007 and started commercial operations in
late 2009. In 2011 the station paid a dividend of €7.4 million to the ESB, down
from €17.6 million in 2010.
Bizkaia Energia, jointly owned with Osaka Gas of
Japan, runs a 755MW power station in Amorebieta, near Bilbao in the Basque
Region of northern Spain. The plant was the first internationally owned
Independent Power Producer in Spain, and has been in commercial operation since
The station paid the ESB a dividend of €7.4
million in 2011.
At the time of investing in Bizkaia Energia in
2003, then ESB chief executive Pádraig McManus said the international business
The Irish Examiner reports
that Justice Minister Alan Shatter is trying to eliminate abuses of bankruptcy
laws in other countries through proposals for modernising EU-wide insolvency
legislation. Irish property developers have attracted widespread
criticism over the past few years for availing of much more lenient bankruptcy
laws in the UK in what has been described as “bankruptcy tourism”.
Mr Shatter said he had arranged that the initial discussion on the proposed
regulation took place at the informal Justice and Home Affairs Council meeting
of EU justice ministers held in Dublin Castle on Jan 17 and 18.
“I emphasised the importance of a more uniform approach across the EU in regard
to the establishment of the centre of main interest so as to combat potential
abuses which have given rise to allegations of ‘bankruptcy tourism’,” said Mr
Shatter in response to a Dáil question tabled by Sinn Féin’s Pearse Doherty.
Central to the EU proposals will be tightening up on guidelines on what is known
as the centre of main interest. This will impose a higher burden of proof on
people who want to apply for bankruptcy that they have moved their business
interests and families to that country for a requisite time before they can
Steve Thatcher, a UK lawyer and bankruptcy specialist who has dealt with Irish
clients, says the most effective way for Mr Shatter to eliminate bankruptcy
tourism would be to implement personal insolvency legislation in this country
“instead of drip-feeding it in”.
Moreover, it is highly unlikely that the UK minister for justice will change
existing legislation because of Irish people seeking bankruptcy protection in
that jurisdiction, said Mr Thatcher.
However, Mr Doherty said there has to be an urgent tightening up of EU-wide
legislation. “This is something that has been going on for some time and the
minister needs to crack down hard on it,” he said.
“For example, we have all heard of the Nama developers who’ve been able to
declare themselves bankrupt outside of the State, to avoid this State coming
after their assets.
“We cannot have a situation where those who can afford it can avail of more
lenient bankruptcy regimes, while the ordinary person is left waiting at home,
in this instance for a personal insolvency bill that we’re not even sure will
assist people. Bankruptcy laws need to be fair to the individual and the state
and they need to be declared in the state that person is resident.”
out our subscription service, Finfacts Premium
, at a low annual charge of €25 - - if
you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to
support the service.