Impact chief rejects tax cuts as alternative to pay increases

The president of the country’s largest public service trade union has rejected tax cuts as an alternative to pay increases.

Speaking at the opening of the trade union Impact’s biennial conference in Killarney Kevin O’Malley said focussing solely on tax cuts would leave taxpayers subsidising low-paying but profitable employers, and would mean more cuts in public services.

He said income restoration was now Impact’s first priority after six years in which living standards had been “battered” for all but a small elite.

“You cannot restore living standards without restoring incomes, and that means pay,” he said.

Mr O'Malley rejected the argument that income recovery could happen simply by cutting taxes. He said Ireland already took in less tax income than most EU countries.

“Employers’ organisations are telling us that pay must stay static while taxes fall. I’ll translate that argument for you. It means working people must trade any sort of income recovery for worse public services, while profitable businesses and their shareholders make no contribution at all.

“It means profitable companies can continue to have their low-pay business model subsidised by taxpayers through the benefit system, which is fast becoming a safety net, not for citizens who are down on their luck, but for profitable corporations running on the exploitation of minimum wage and zero-hours contracts. That is not acceptable to us and it should not be acceptable to the politicians who run the country,” he said.

Mr O’Malley said that the question of pay restoration and who should be first in the queue had been debated ata number ofunion conferences over recent weeks.

He said it was important to state that there was no conflict between the public and private sectors.

“ We remember that in 2009-2010, politicians and business organisations - cheered on by commentators and most of the media - successfully drove a wedge between workers in different sectors.”

“The result was declining incomes for all. As soon as public service pay was cut, the minimum wage was attacked; then the wage-setting mechanisms in low paid sectors; then voluntary sector - and some private sector - employers cut their pay rates, pointing to the public service as an example. “

“I don’t think unions handled the public-private issue too well. In the dismay and confusion of the time, we fell into a trap. That isn’t going to happen this time.”

Mr O’Malley said that analysis carred out by Impact had shown that virtually all workers had suffered reduced incomes over recnet years but that this had happened in different ways.

“That means income recovery has to happen for all workers across the economy - public, private, voluntary and community - even if it has to happen in different ways.”