Highest paid in the public sector to take biggest hit
Old-age pension to escape unscathed as other social benefits fall by 4pc
TAOISEACH Brian Cowen was dramatically challenged last night by Fine Gael leader Enda Kenny to push ahead with a major public sector reform plan in this week's Budget.
It has also emerged that public sector pay cuts to be announced on Wednesday are to be tiered, so that higher paid workers will take a bigger hit than lower paid workers.
The Irish Independent, however, understands that the 4pc cut to dole payments is also likely to apply across the board to almost all other social welfare payments -- with the exception of the old age pension.
This means people receiving the carer's allowance and the disability allowance are likely to be affected.
Despite the collapse of the talks on cutting the public sector pay bill by €1.3bn, it's understood the Government and unions had already agreed to a wide range of changes in the operation of public services.
Collapsed
The collapsed deal would have seen:
Redeployment of workers between the civil service and State agencies.
An 8am-to-8pm working day in the health service, without overtime.
Value-for-money and waste reduction plans.
New work practices in the education sector.
Rationalisation of local government agencies.
But union bosses are refusing to sell these changes to their members or cooperate with the reforms because their proposals for unpaid leave were ditched in favour of direct pay cuts.
The attitude of the union leadership has provoked an angry reaction from Fianna Fail backbenchers and opposition parties, who feel these long-overdue reforms should take place in the public interest.
However, Mr Cowen and his Cabinet ministers have stayed relatively quiet on the issue -- although the Taoiseach has admitted reforms are being delivered too slowly.
Minister of State for Labour Affairs Dara Calleary yesterday called for the implementation of the reforms but it was not clear if he was speaking on behalf of the Taoiseach.
Meanwhile, Fine Gael leader Mr Kenny told the Irish Independent he now wants to "challenge" Mr Cowen and his Government to set out clearly in Wednesday's Budget "how they intend to achieve the necessary reforms".
"Fine Gael has for many years been demanding the reforms that will ensure the delivery of efficient and cost-effective public services and we have put forward a series of initiatives to achieve this.
Urgent
"The need for these reforms remains urgent, despite the Government's incompetent mishandling of the talks process over recent weeks. The collapse of these talks has seriously undermined the Taoiseach's authority to deliver what is required," he told this newspaper.
Mr Kenny says that if he was in power, a more efficient Department of the Taoiseach would be "the enforcer of Government policy".
Fine Gael says it has a track record of demanding public sector reform, dating back to Mr Kenny's call seven years ago for benchmarking not to be paid unless there was a definite return for the taxpayer.
And, it appears, Department of Finance officials were impressed with some of the proposals put forward by the unions during the negotiations, which they felt would achieve genuine savings -- but not the €1.3bn required for the Budget.
Officials also felt the unions were wedded to the issue of unpaid leave for public sector workers -- but this had become "politically toxic" due to the backlash from Fianna Fail backbenchers and the public.
Minister Calleary said the changes proposed by the public sector unions would have led to better services and a better working environment -- and that there was nothing to be lost in the Government pursuing that agenda.
"Reform has to be delivered. So they are aims that should be preserved," he said.
But a Government source acknowledged it was unlikely there would be any progress before Christmas, given the breakdown of talks.
Meanwhile, Foreign Affairs Minister Michael Martin revealed the public sector pay cuts -- expected to be 6.75pc on average -- would be implemented on a graded approach.
"Obviously we will be looking at a tiered approach in relation to it," Mr Martin told RTE's 'Week in Politics'.
A tiered paycut means that those on the lowest salaries are likely to be affected the least, with higher wage cuts for better-paid public servants -- as happened with the public sector pension levy last February.
Scepticism
But union leaders again added to the scepticism about any progress on the reform.
Irish Congress of Trade Union (ICTU) general secretary David Begg said the Taoiseach had broken down the social partnership model.
Mr Begg warned union leaders would not have the "licence" to urge their members to reform because their credibility had been "diminished".
"We will not in those circumstances expect the Taoiseach to reverse his decision. It seems to me there will be no relationship of that kind between this Government and this leadership (of the trade union movement)," he said.
Union leaders also warned that public sector pay cuts in the Budget could lead to chaos and unrest.
IMPACT general secretary Peter McLoone said Finance Minister Brian Lenihan had cautioned last year that pay cuts in France could lead to riots -- and he warned that we could expect a similar reaction in Ireland.
Government sources have also flatly denied there was a Cabinet split over the issue of allowing public sector workers to take 12 days of unpaid leave as part of the €1.3bn savings package.
A senior source pointed out that two of the ministers reported as being strongly opposed to the plan -- Health Minister Mary Harney and Foreign Affairs Minister Micheal Martin -- were not even at the Cabinet meeting last Tuesday due to EU summits in Brussels and Greece respectively.
The source also said there had been a collective Cabinet decision taken on the matter -- which was to seek further details from the unions.
- Fionnan Sheahan and Michael Brennan
Irish Independent
