Wednesday 21 August 2019

Public sector pension levy won't be abolished

Donohoe will stand firm in pay talks ahead of next election, unions warned

Finance Minister Paschal Donohoe expects the pension levy to be the main battleground with unions. Picture: Fergal Phillips
Finance Minister Paschal Donohoe expects the pension levy to be the main battleground with unions. Picture: Fergal Phillips

Philip Ryan and Ralph Riegel

The Government will face down any union demands to abolish the pension levy which was imposed on public sector workers during the financial crash, the Sunday Independent has learnt.

Finance Minister Paschal Donohoe will vehemently oppose any changes to pension contributions paid by public sector workers during future pay talks with unions.

Mr Donohoe is understood to believe unions will make the pension levy the main battleground on pay ahead of the next election.

However, a senior government source said the unions would "not win that argument" and would face huge resistance from the Department of Finance if they sought to have the levy abolished.

"That is where they are going to fight the pre-election phase and I know how we are going to be handling that," the source said.

"You simply cannot say you are going to get rid of that pension contribution when two-thirds of private sector workers don't have a pension."

The pension levy, which on average is around 5pc per worker, was introduced in 2009 as an emergency measure after the property market collapsed and the banking system imploded.

The levy has since been converted into a contribution toward public sector pensions and is on average worth around €2,500.

The Public Sector Pay Commission recommended keeping the levy to address the deepening hole in the State's pension pot.

Public sector workers have had significant pay increases over the last three years and will see their salaries rise against next year.

However, the Government has been under pressure from unions since the State's finances have improved.

The Garda Representative Association and Irish Nurses and Midwives Organisation forced the Government to breach the terms of the public sector pay deal and increase pay for their members.

Cabinet ministers are now bracing themselves for further escalations of industrial action by other unions in the coming months as a general election comes closer.

However, they are encouraged by the diversity of the demands from the unions.

"They don't speak in a unified voice on anything other than the levy. Teachers were talking about new entrant pay still but you had all of the other unions talking about different things," a source said.

In recent weeks, teaching unions have called on Education Minister Joe McHugh to address the two-tier pay scale which has seen new entrants paid significantly less than existing teachers.

The Association of Secondary Teachers Ireland has called for a mid-term examination of the public sector pay agreement which does not come up for review until next year.

Organisations representing members of the Defence Forces are also seeking pay increases for soldiers.

Yesterday, a Respect & Loyalty march was organised in Cork city centre, by Defence Forces veterans from Munster - and by Prof Cathal MacSwiney Brugha, grandson of both Terence MacSwiney and Cathal Brugha, along with the Wives and Partners of the Defence Forces (WPDF).

Retired Brigadier General Ger Aherne said it was "a scandal" how Defence Forces members were being treated.

"Army units throughout the country are, by international benchmarking standards, non-operational," he said. "Many have less than 50pc of their leadership strength. Command and control is not possible. Lives will be lost in training accidents and operations. Air Corps helicopter and fixed-wing units are operating at 50pc or less strength. Aircraft are lying idle and not flying due to these shortages."

Lt Col Dan Harvey, a decorated UN veteran, historian and author, said Ireland faces a critical situation about the neglect of the primary bulwark of its democracy.

He pointed out that the Defence Forces have undergone eight reorganisations in 23 years - with the last, in 2012, proving "a complete disaster".

He added: "It was conducted purely on the basis of costs and politics - not one thought about operational effectiveness."

WPDF official Sara Walsh said what had been done to the families of serving Irish soldiers, sailors and aircrew was "shameful." She said more than 30pc of serving members now qualify for social welfare family income supplement.

Sunday Independent

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