Noonan unfazed by collapse of Croke Park

Speaking from US, Finance Minister says no decision yet to impose public sector pay cuts through legislation

Minister for Finance Michael Noonan: “We have to get those savings”. Photograph: David Sleator/The Irish Times

Minister for Finance Michael Noonan: “We have to get those savings”. Photograph: David Sleator/The Irish Times

Mon, Apr 22, 2013, 07:29

Minister for Finance Michael Noonan has said he doesn’t expect any hard, quick decisions on a new plan to cut €300 million from the public sector pay bill after unions voted down the Government’s Croke Park II proposals last week.

Speaking for the first time since the proposals were rejected, Mr Noonan said there would be discussions again with the unions. While it was still policy to seek pay cuts as part of €1 billion in reductions over three years, it had not yet been decided to use legislation to impose these.

“We’ll see – if I make that kind of statement out of America, by the time it gets home it could sound threatening,” said Mr Noonan, speaking yesterday in Washington DC as the World Bank and IMF spring meetings ended.

Mr Noonan’s Cabinet colleague Minister for Health James Reilly said last week that in the absence of the Croke Park deal on the planned pay cuts there would have to be legislation.

The Government had to secure €300 million in pay cuts this year because they were built into this year’s budget figures, said Mr Noonan: “We have to get those savings. We are going to talk about it on Tuesday at Cabinet.”

July deadline
The Minister said there was no urgency to agree an alternative plan as the cuts did not have to be implemented until July. “I would have much preferred obviously if it had went through on the vote because it is much easier to deal with on that basis. The fortunate thing is that the decision was taken in April – it is a good distance to July,” he said.

Asked if across-the-board pay cuts would be imposed, Mr Noonan said Brendan Howlin, the Minister for Public Expenditure and Reform who is overseeing the public sector pay reductions, was “a very prudent minister”.

“He has very good relations with the trade union movement,” he said. “He will lead the discussion in Cabinet on Tuesday.”

Mr Noonan said relations between the Government and trade unions were good. “The general position is one of ongoing dialogue hoping to resolve this,” he said.

The IMF, European Commissioner Olli Rehn and European Central Bank president Mario Draghi had not raised the rejection of the Croke Park deal in their discussions over recent days, the Minister said.

“They trust us to deliver because we have been going well,” said Mr Noonan.

Water charges
The Minister said the Government would ask the troika for permission to delay the introduction of water charges from January 2014 until the following October during its review of Ireland bailout programme. The troika’s tenth review begins today, with officials arriving in Dublin.

“They are normally fairly easy going about those kinds of things,” he said. The delay was due to the technical challenge of rolling out water meters, he said.

Mr Noonan was speaking ahead of figures to be published today showing the 2012 deficit was 7.6 per cent, better than the 8.2 per cent estimate on Budget day and the 8.6 per cent target set by the troika.

He said that even though the cost of Government borrowing continued to fall, he was planning to talk to the ECB about its government-bond buying programme providing an “ultimate backstop” to help Ireland exit the bailout at the end of the year.