Ministers tell unions to 'face reality' over pay

 

CABINET MINISTERS have told public sector unions that they will have to face the reality of the Government’s financial difficulties in the current talks over plans to cut the public sector pay bill by up to €1.3 billion.

Speaking publicly yesterday for the first time since unions announced plans for a national public sector strike on November 24th, Minister for Finance Brian Lenihan said the stark reality was that: “We don’t have the funds to fund what the public service unions expect and they are going to have to address that reality with us.

“If they choose to deny that reality, if they choose to embark on industrial action, for example, all that will happen is further damage to the economy for the people of this country,” he said.

Mr Lenihan said that while the Government was committed to engaging in intensive talks with trade unions to see if a “common national way forward” could be found, it had also made it clear that if it could not reach agreement, it would “have to take whatever decisions are required in the national interest”.

Separately, Minister for the Environment John Gormley asked public service unions: “Do we take cuts, or is it a case of having your cheques bounce because we’ve nearly got to that stage?”

Meanwhile at the talks between unions and the Department of Finance, it emerged the Government will save about €300 million in a full year arising from the moratorium on recruitment in the public service and initiatives such as the incentivised early retirement and career break schemes aimed at reducing the numbers on the State’s payroll.

The Government’s side in the talks has insisted that such savings cannot be taken into account in relation to the €1.3 billion reduction in the public sector pay bill it is seeking for 2010. Trade unions have said there was a need for the Government “to put up in lights” the amount already contributed by public servants through the pension levy, pay rises foregone and operating with fewer staff as a result of the moratorium.

At the talks, unions also urged the Government to produce its vision for the size and scale of the public sector in 2014 at the end of its economic recovery period. Union leaders argued the talks should not just concentrate on the pay bill for next year but rather cover the period up to 2014.

Speaking to reporters yesterday, Mr Lenihan said he did not believe proposals put forward by some union leaders that taxes should be raised as an alternative to cutting the public pay bill made sense.

“They want to tax everyone else to have higher salaries for themselves. That’s what they are telling the public.”

Mr Lenihan said the marginal rate of tax is 53 per cent and that if the Government was to increase it further to raise an extra €1 billion “everyone or every couple earning over €100,000 would pay tax at a marginal rate of 63 per cent”.

Speaking on Newstalk radio, Mr Gormley said: “We already have a type of civil war in this country between the private and public sectors and I don’t want to exacerbate that any further . . . and I would say to people who are representing the public sector, do we take cuts, or is it a case of having your cheques bounce, because we’ve nearly got to that stage.

“And those people who believe that it’s impossible . . . that we could continue to borrow that amount of money and not face dire consequences down the road are not living in the real world I’m afraid.” The executive committee of the Association of Higher Civil and Public Servants, which represents over 3,000 senior civil servants and managers in the commercial and non-commercial State sector yesterday urged members to vote in favour of taking part in the planned one-day strike on November 24th.

In a separate development, the union Impact told the Health Service Executive that its members were “outraged” at a letter sent to all health service employees on Wednesday, which they said was an attempt to blame staff “for the shortcomings in the public health service, and to question their constitutional right to union membership . . .”