ERSI Warns Over Public Sector Jobs

A major economic research institute has warned that some 40,000 public sector jobs could go if Ireland's recovery is hindered.

In an update to its May 2009 Recovery Scenarios for Ireland, published today, the Economic and Social Research Institute (ERSI) recommends the Government implements a series of austerity budgets in the period 2011 to 2014 in order to recover €7½ billion over a four year period.

In order to achieve this, the ERSI said cuts in current expenditure on goods and services would involve a cut in public service employment of approximately 40,000, to be largely achieved through "natural wastage". This would bring total public service employment back to 2006 levels by the end of 2014. The institute also said no further cuts in public service wage rates were assumed for 2011 and subsequent years.

On Monday, an early summary of the report was released wherein the ERSI said they predicted two medium-term scenarios for the economy.

In the institute's High Growth scenario, they predicted a vigorous recovery over the period 2012 to 2015, which would see output per head restored to its 2007 level by 2015.

In the less optimistic Low Growth scenario the recovery in output, while significant, would be much lower, resulting in substantial continuing unemployment and a higher structural budget deficit.

Also contained within the report is an expectation for the introduction of water charges in 2013 and 2014, which the ERSI said would deliver an additional €500 million in revenue on an annual basis, along with an extension of the pension age to 66 to save expenditure and raise tax revenue.

(DW/BMcC)