SIPTU is to propose that all 2 million people in the State's social insurance scheme be given a special £500 pension bond as compensation for inflationary increases, when the ICTU executive meets today. The State's largest union called on the Irish Congress of Trade Unions (ICTU) to seek a special review of the Programme for Prosperity and Fairness after the May figure of 5.2 per cent was announced.
Yesterday, ICTU general secretary Mr Peter Cassells said that the latest figure of 5.5 per cent for June "reinforces the need for a review" and this would be considered today. He said that the executive was likely to endorse a recommendation from ICTU's powerful general purposes committee that negotiations on the December budget "begin immediately" as one of a number of non-inflationary measures that would protect incomes of workers.
How far ICTU's affiliated unions are prepared to go remains to be seen. Amalgamated Transport and General Workers Union leader Mr Mick O'Reilly has called for "a total review" but most other unions appear to be targeting specific measures such as the cost of housing and public transport.
The attraction of the SIPTU proposal is it is simple, would come into play relatively quickly, is targeted at low income groups and is non-inflationary. According to an internal SIPTU discussion document seen by The Irish Times it would cover 1.6 million workers paying PRSI, plus another 425,000 people in receipt of old age pensions, widows pensions, invalidity payments and other welfare benefits.
The pension bonds would be issued by the Exchequer and would attract interest rates equivalent to annual growth in Gross National Product (GNP). Such a measure is covered in the PPF provision that enhanced social welfare supports can be put in place if GNP exceeds 5.6 per cent.
Pensioners could cash the bonds immediately. Other recipients could use them to improve their existing occupational pension scheme, or as a down-payment on a new scheme. SIPTU's national equality officer Ms Rosheen Callender, who is also a member of the ICTU executive confirmed yesterday the union would be calling for Congress to endorse the proposal. She said that over 50 per cent of workers are not in an occupational pension scheme. Only 30 per cent of women workers are in such schemes.
"The bond would give an impetus to new pension arrangements due to come in soon," she said.
She added that it was also aimed at increasing social welfare supports in line with general increases in national income, as reflected in GNP.
SIPTU is proposing that the bonds be introduced at the start of the tax year in April 2001. Even if every pensioner in the State decided to cash in their bond immediately, Ms Callender estimates the cost to the Exchequer at £250 million. But she believes that many of them would opt to defer encashment because of the high interest they would attract.
Without being inflationary she maintains that the bonds would help compensate workers and those on welfare for the loss in living standards due to inflation.
Meanwhile, demands for stronger action to curb profiteering are also likely to emerge from today's meeting. IMPACT general secretary Mr Peter McLoone said yesterday that existing Government inflationary methods did not go far enough.
He expressed disappointment the Government had not moved already to cut bus and train fares, and reduce excise duties.
Mr O'Reilly described the PPF as "a total disaster for Irish workers". He said it was "not acceptable that any trade union leader continue to stand over and actively support such a deal."
The Irish Business and Employers Confederation refrained from comment ahead of today's meeting of the ICTU executive. It is not expected to alter its stance that pay increases are not an option in any general review of the PPF.
But it has not ruled out a joint approach to measures for curbing price increases or compensating workers for inflation through tax and other State initiatives.
