Government looking to pay cuts, pensions and reform for savings

 

THE GOVERNMENT yesterday indicated it hoped to achieve the €1.3 billion in savings it is seeking in the public-sector pay bill through a combination of reform, pay cuts and pension changes.

Speaking on behalf of the Government, Minister of State for Science Conor Lenihan outlined where the Government would seek to achieve the cost reductions.

“Clearly we’ll look at reform, cuts and indeed of course naturally enough, some effort to mitigate the extent of the public sector pension bill,” he said.

Mr Lenihan said if the trade unions had “better ideas” about how to save money, the Government was open to hearing such views and seeing whether they could be implemented. However, a Government spokesman said it reserved the right to take a decision in the national interest.

On Friday, Taoiseach Brian Cowen said the Government was prepared to examine whether the €1.3 billion reduction it is seeking in the public-sector pay bill could be generated through reform rather than by pay cuts. In an interview with RTÉ, Mr Lenihan said Mr Cowen had put the €1.3 billion figure “on the table with a view to discussion”.

He added: “The social partners will be meeting with the Government in an intensive session of discussion next week and we hope to look at it in every extent. We’re prepared to listen and hear what views they have in terms of achieving that particular figure.”

Asked if it would be possible to achieve the entire €1.3 billion solely through reform, Mr Lenihan said: “Clearly reform of its own is necessary but obviously we’ll have to look at cuts as well and that’s the stark reality that we face. We have to take €4 billion out of public spending and €1.3 billion of that will come from the public sector.”

Asked if reform, rather than pay cuts, would be a better way for the Government to avoid strikes and protests, Mr Lenihan said: “We’ll have to do both at the end of the day.”

A Government spokesman said the Government was committed to achieving in “the order of magnitude” of a €1.3 billion reduction in the public sector pay bill. He said the unions had indicated alternative ways to achieving the cuts.

“The Government will listen of course while at the same time reserving the right to ultimately take a decision in the national economic interest.”

Public sector unions are to meet Department of Finance officials on Wednesday. Last night the chairman of the public sector committee of Ictu, Peter McLoone, said if unions were to come up with an alternative then everyone would have to contribute. Vice president of the Garda Representative Association Damien McCarthy warned that any effort to reduce Garda pay or allowances would be met with protest.