Congratulations to everybody ! But we can’t afford a € 1 billion public bonus
It’s hard to imagine the government even considering taking the € 1 billion note for Covid special bonus payments in the public sector.
A claim to the health unions labor tribunal, asking for an additional 10 days of vacation in recognition of their exceptional frontline work during the pandemic, is expected to cost around 370 million euros.
If given the green light, it’s pretty obvious that other frontline public sector workers would expect and demand something similar – pushing the bill up to around € 1 billion.
This would of course do nothing for private sector workers in many of the jobs that have also helped move the country forward.
Public Expenditure Minister Michael McGrath would like Solomon’s wisdom to try to find its way through this one.
The labor court referred the claim to employers – primarily the HSE – and unions to work. But the HSE cannot simply decide to increase spending by that much, even on an ad hoc basis, without getting Cabinet budget approval.
So the government has entered a kind of caucus as it reflects on how it can recognize or reward the tremendous efforts some people put into their jobs during the pandemic.
It will be an open goal for the political opposition, regardless of the government’s decision. They will line up to speak out against the government’s wickedness as they vie for these public sector votes.
The pandemic has already cost the Exchequer tens of billions – and at a time when we still haven’t figured out how we’re going to pay for all of these loans, it seems a little crazy.
Yet who can argue with the thousands of people who in many cases (but not all) have done so much to take care of the people and move the country forward.
When it comes to a financial reward, it’s not always about whether it is deserved or not, but rather whether it is affordable. Health unions have pointed out that places like Northern Ireland, Scotland, Denmark and France have paid special bonuses.
France has a debt to GDP ratio of 98pc. Denmark was only 33% in 2019.
In the UK, with its debt-to-GDP ratio of 106%, only the regions of Scotland, Northern Ireland and Wales have said they will make a payment. England declined.
In Ireland our debt to GDP ratio is officially around 58pc – but everyone knows our GDP figure is inflated by multinational steroids.
Even the NTMA, which manages the debt, prefers to use GNI * as a guide – which reduces the artificial influence of multinationals.
On this basis, our debt is around 115pc of GNI * – and it continues.
If the principle of a recognition payment is recognized, and it has been recognized in a way by the government, then how much should be paid?
In Northern Ireland, healthcare workers were to be paid £ 500 each. But it was taxable and prorated for part-time workers.
They ended up accidentally overpaying some people and then looking to get some of the money back. Not a good approach.
In France, healthcare workers received different payments. Some received € 1,500 while those who do not deal directly with Covid patients received € 500. These payments were tax-free and the bill to the French state was around 1.3 billion euros.
The payments were additions to a wage deal negotiated during the pandemic, which saw healthcare wage increases of around 1.5% to 2%, and which will cost the French treasury $ 7.5 billion. euros per year.
In Germany, health workers received a pay rise rather than a recognition payment.
In Ukraine, where ambulance teams have been reduced due to Covid, staff have had to work 16-hour shifts. Low wages in this sector are a real problem, and the government has announced pay increases of 300% for those who work directly with Covid-19 patients.
The healthcare industry is made up of so many different jobs everywhere, with different pay scales, terms and conditions.
Take nursing in Ireland, where the average salary is around € 38,362. On the basis of a five-day week, ten days of vacation would be equivalent to remuneration of € 1,475 per nurse on average.
Perhaps the most shocking thing about the € 1 billion Covid bonus payment bill for the public sector would be how it compares to the private sector. Supermarket chains skimmed it off during the pandemic, while relying on the risks taken by all of their staff.
Bus drivers and anyone else providing services deemed essential found themselves in rather difficult situations. So far, these employers have hardly indicated that any special payments will be made.
Ironically, some companies have thrived and made huge profits during the pandemic, in industries such as technology and pharmaceuticals.
Here, well-paid and highly skilled workers would have seen their incomes intact and may well be in a strong position to negotiate wage increases in a tightening labor market and rising costs.
Given that tens of thousands of people have lost their jobs in this pandemic, I’m sure they would have a hard time seeing public sector workers – whose jobs have always been fully secured – receiving a pay rise and a bonus.
Instead of 10 days off for civil servants, why not have two more statutory holidays in the next 12 months? Now it looks like the government could at least do one anyway.
It would cost public and private sector employers. It would be open to everyone except essential and hospitality workers who could be paid at a public holiday rate for work. It would also be a boost for the hospitality industry, which has been hit so hard.
Not enough, I hear you say.
OK. So how much is enough?
Banks should contribute to the Mica plan
Banks will find themselves in a tough spot when they meet with Finance Minister Paschal Donohoe to discuss how they can contribute to the Mica compensation scheme.
About 4,000 homes are affected by bad blocks, and many will need to be rebuilt through a state program that could cost nearly € 2 billion.
But if your house collapses around you, you still have to pay the mortgage. How destructive is this to the soul?
The banks are sitting on about 4,000 mortgage securities whose value has collapsed. Should the state pay the full cost of upgrading this security?
Housing Minister Darragh O’Brien doesn’t think so and wants banks to be part of the solution. They are in a delicate situation. The government cannot tell them to cancel some of the loans. Yet they could benefit from the state regime.
The banks will say that if people fail to repay and the houses are foreclosed, they will take a huge hit on the loan. It would not be as important as the reputational blow they would suffer on repossessing a home under these circumstances.
The banks therefore need the state system to deliver, but it will not be easy to find a mechanism by which they can play their role in the system.
Given that two of the banks are majority state-owned, this will be an interesting conversation. Anything they agree to do will end up being voluntary.
Expect a modest contribution that will have as much substance as the blocks that fail to hold people’s homes upright.
Avolon brings electricity to the aviation industry
Aircraft leasing group Avolon surprised many with two statements last week.
One was from a senior executive, who said the group would not need to order from a manufacturer for five years.
The other came from CEO Domhnall Slattery, who said Avolon is getting into electric air taxis by placing a $ 2 billion order for these new small planes that are still in development.
Manufactured by Vertical Aerospace in the UK, the new electric vertical take-off and landing aircraft will be sold to a Brazilian airline at low cost.
It’s good to see an industry player leveraging new technology in this area, and Avolon to take a stake in the manufacturer as it prepares to enter the New York Stock Exchange via a use vehicle. special.
One can only assume that the purchase contracts contain many clauses concerning the aircraft meeting the performance criteria. At present, the new aircraft has a range of 120 miles and carries just five passengers.
They won’t face Boeing just yet. But it all has to start somewhere.
According to Vertical Aerospace’s website, the company expects to have a net worth of $ 2.2 billion when listed (based on a multiple of 0.5 x 2026 revenue or 1, 3 x EBITDA 2026).
It’s a big price to shoot for if the technology can fix it – but right now, big industry players are hooking up on the concept via preliminary orders for the new aircraft.,