Coalition pay reversal is vote-buying, says FG TD

Government should continue reform of public sector, say two PAC members

Minister for Public Expenditure Brendan Howlin signals an “orderly wind-down” of pay cuts “as opposed to a sudden ending”. Photograph: Gareth Chaney Collins

Minister for Public Expenditure Brendan Howlin signals an “orderly wind-down” of pay cuts “as opposed to a sudden ending”. Photograph: Gareth Chaney Collins

Mon, Aug 11, 2014, 01:00

Two prominent Fine Gael Deputies have strongly criticised comments by Minister for Public Expenditure Brendan Howlin on reverses in public-sector pay cuts, with one saying it looked like the Government was “back to buying votes”.

John Deasy and Eoghan Murphy questioned the basis of a possible change of policy, indicated by the Labour Party Minister in a weekend interview. The TDs, members of the Public Account Committee, argued it was too early and was not warranted.

“If Labour was not at 5 per cent in the polls this would not be considered and every public-sector worker knows it. It looks like we are back to buying votes,” said Mr Deasy, a TD for Waterford.

Mr Murphy, a Deputy for Dublin South East, said he did not think it was wise, and also said it was too early, saying the Government’s priorities should lie in the tax area, where the benefit would be universal and not confined to one sector.

 

Reforming public sector

“While there are still borrowings and debt repayments in the billions [of euro] we need to continue reforming the public sector and reducing the cost of it to the State,” he said.

 

“And we still have a massive, underfunded liability when it comes to public-sector pensions. Any wage improvements in the economy should be delivered through changes in the tax bands and rates that will benefit everyone and not just one sector. The universal social charge was introduced as a solidarity tax and that could be the place to start.”

Mr Howlin said at the weekend that cuts to public-sector pay to 300,000 workers was made under the Financial Emergency in the Public Interests Acts 2013, and signalled he would begin what he described as an “orderly wind- down” rather than a sudden stop to the cuts.

However, the approach is likely to face opposition from Labour’s Coalition partners Fine Gael, and renew tensions between the parties on such issues in the run-up to the October budget, which will now be easily the most benign since 2007.

 

Budgetary leeway

With stronger exchequer figures making more budgetary leeway a certainty, TDs and Senators from the majority Government party have argued for the benefits to be applied more widely. Fine Gael TDs have contended that public-sector workers remain comfortably in the top half of pay rates in the EU notwithstanding the cuts.

 

However, Mr Howlin’s comments have been warmly welcomed in other quarters. The State’s largest public service trade union, Impact, said the comments were “encouraging” but noted the potential benefits would not be “felt today or tomorrow”.

A spokesman said the union had been keen to discuss pay recovery with the Government once the State’s deficit fell below the targets set as part of the EU-IMF bailout and stabilised.

In the interview, Mr Howlin said the Government would have to engage next year with the unions on the orderly winding down of financial emergency measures and who should benefit first.

“We have to have agreement with the public sector unions that it is not going to be a big bang, because that would undo all the good work we have done over three years. There has to be an orderly wind-down, as opposed to a sudden ending,” he said.