Politics

Tuesday 29 July 2014

FG warns Burton over her demand for wage increases

Niall O'Connor and Ralph Riegel

Published 06/03/2014|02:30

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Minister for Social Protection Joan Burton
Minister for Social Protection Joan Burton

FINE GAEL has sent a warning shot to Social Protection Minister Joan Burton over her consistent demand for wage increases.

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Ms Burton has been accused of going on a "solo run" by the party after she called for the introduction of a so-called 'living wage'.

While the Labour politician has made similar calls in the past, Fine Gael figures were left annoyed at her latest demand to see a hike in the minimum wage.

Jobs Minister Richard Bruton, in particular, is adamant that the Government must focus on tax reforms and fears that any hike in the minimum wage could pose a barrier to job creation.

He stressed yesterday that Ireland also had to be very cautious about anything that would add to employment costs as the economic recovery gathers pace, and pointed to the fact that workers' incomes up to €32,800 were taxed at the marginal rate.

Any money earned above that point is taxed at 52c out of every euro, between income tax, Universal Social Charge (USC) and PRSI rates combined.

"I have said consistently that the low rate at which people hit the high rate of tax in Ireland is a barrier to job creation," Mr Bruton said yesterday.

"I think all parties in Government want to see a change in that area," he added.

However, Fine Gael sources last night insisted that Mr Bruton was one of a number of party figures who were staunchly opposed to Ms Burton's calls for wage increases.

"Look, of course we want to put money back in people's pockets, but there are many ways we can do that, for example through raising the income tax threshold," said a senior source. "Raising the minimum wage flies straight in the face of our attempts at trying to create more inward investment and job creation. Joan (Burton) is going on a solo run on this one."

A 'living wage' system operates in London and aims to ensure that workers can afford to cover basic needs such as housing, clothing and food.

Ms Burton used her speech on the Programme for Government to call for a "gradual phasing in" of wage hikes.

She said a living wage scheme could begin on a voluntary basis, allowing employers to "buy in".

"A living wage would be higher than the minimum wage, and would provide the income necessary to meet basic needs, including housing and healthcare, on top of items such as food and heating," Ms Burton said.

The issue is likely to become more contentious between the coalition partners as the parameters of Budget 2015 are drawn.

Irish Independent

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