THE Irish Small and Medium Enterprises Association (ISME) and the Chambers of Commerce of Ireland have both called on the Government to make public-sector pay restraint a key element in negotiations on any new national agreement.
The chief executive of ISME, Mr Frank Mulcahy, said tax and PRSl reforms should be targeted at the low-paid and the private sector. The £800 million that has been signalled to be available in tax cuts should be used to abolish employees' PRSI and the income levies.
Such a policy would give significant increases to the low-paid, ISME said. It would also help small Irish firms compete more effectively in the UK export market.
"Spending lobbies have had the upper hand over the past six years," Mr Mulcahy said. "In spite of the commitment to tax reform under the Programme for Economic and Social Progress, and the Programme for Competitiveness and Work the Government has failed to deliver benefits to the low-paid."
The main beneficiaries of pay moderation under national agreements so far have been capital-intensive industries, the Exchequer and the public-sector pay bill, he said. His own organisation represents small to medium-sized firms, many of them labour-intensive with high wage costs.
"If public-sector pay had kept in line with the private sector over the past six years, then the tax burden on each private-sector employee could have been reduced by £2,500."
Referring to the recent report of the National Economic and Social Council on the parameters for negotiating a new national agreement, Mr Mulcahy said the £800 million in tax cuts that seems to be on offer should go to the low-paid and private sector. PRSI should be abolished, at a cost of £500 million, and the remaining £300 million used to abolish income levies.
While seeking a place for ISME at the negotiating table, Mr Mulcahy said his organisation "will fight tooth and nail" to defend the right of employers not to recognise trade unions.
The president of the Chambers of Commerce of Ireland, Mr Tony Prendergast, said that increases in salaries, wages and allowances for Government Departments have been more than double the rate of inflation over the past year.
"The Government must exercise restraint in expenditure, not only as an example for the social partners, but also as a means of making room for tax cuts for individuals and business," he said.