Tuesday 19 February 2019

Cowen puts €38,000 pay hike on the line

Fionnan Sheahan and Dara de Faoite

TAOISEACH Brian Cowen yesterday gave his clearest signal yet that he will sacrifice his €38,000 pay rise to strike a note of restraint in the latest pay talks.

In his first public comments on the controversial ministerial wage hikes since becoming Taoiseach, Mr Cowen indicated that the Government salary hikes would be used as a bargaining chip in the ongoing pay negotiations.

The pay rises -- worth €25,000 for most ministers, but €38,000 to Mr Cowen -- were deferred for a year by the Cabinet following months of furore. But the first tranche is due to kick in this September and, over the following two years, the Taoiseach's salary is scheduled to rise to €320,000. The hikes were recommended by a review body on high-level public sector pay.

Appearing to prepare the ground for a symbolic abandonment of the pay hike, Mr Cowen said if all sides in the latest round of pay negotiations came forward with a "responsible approach", the Government might respond in kind.

"I have made it very clear that if we can get to a position where everybody is prepared to come forward with a responsible approach -- that would help us secure as many jobs as possible in the more difficult economic environment we are faced with -- clearly, the Government has a role to play in all of that as well," he said.

"So, we'll deal with that in the context of the negotiations."

Addressing the country's largest public sector union, IMPACT, Mr Cowen said the current pay talks probably "rank among the most challenging we have faced".

"There is no doubt that a new agreement would help to provide stability for the economy at a time when it is needed most. It would convey domestically and internationally -- to investors, to savers, to employers and to consumers -- the strength and confidence of the Irish economy in an uncertain world," he said.

Mr Cowen called on the public and private sectors to "behave responsibly" when it comes to setting income levels. He said pay rises to all workers over the past six years had "significantly outpaced inflation".

The Taoiseach added that any assessment of the value of the social partnership process, or the approach to the current pay negotiations, should take account of the budgetary strategy with which the Government supported agreements.

"For example, looking at the impact of the Sustaining Progress and Towards 2016 together, from end 2002 to 2008, the net income of all workers -- public, private, married, single, with and without children -- significantly outpaced inflation.

"Over the course of Towards 2016 alone, taking into account wage increases, changes in tax credits and bands, enhancements in the family income supplement, the introduction of the early childcare supplement, child benefit increases, and improvements in mortgage interest relief, the vast majority of workers in both the private and public sector fare better than inflation in terms of net income."

Benchmarking

After Mr Cowen's address, delegates at the IMPACT conference again criticised the benchmarking system of pay awards, by which public pay is compared to the private sector. Mr Cowen signalled that he was willing to examine the process, which many in the public sector feel has not benefited them.

"If we can get to a position where there is a basis for agreeing a different approach, or where variations in current practice would be helpful in securing a viable approach to pay determination in the future, the Government will play its part in finalising the terms of an agreement," he said.

IMPACT general secretary Peter McLoone said the current round of social partnership talks was not solely about pay.

"We have no illusions about the challenge all parties face in setting wage growth at a sensible and acceptable level, but the message from this conference is that it will also be necessary in these negotiations to make progress on all issues that matter to working people, particularly protection against exploitation and addressing the imbalances in public service provision," he said.

"Anyway, let's leave the pay bargaining until we are at the negotiating table."

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