The Budget has put Partnership 2000 back on the rails, as far as the trade unions are concerned. A Budget which takes 80,000 low-paid workers out of the tax net and another 58,000 off the top rate of tax has to be welcomed by the trade unions.
Whether it rehabilitates the Minister for Finance with union leaders is another matter. The most that SIPTU president Mr Jimmy Somers would concede last night was that Mr McCreevy had "gone a long way towards undoing the damage of last year's Budget".
There was strong criticism of the Budget from some unions, such as the ATGWU, MSF and BATU. The ATGWU leader, Mr Mick O'Reilly, said the concessions would mean only a net tax gain of £2 a week for many lowpaid employees. The acting MSF national secretary, Mr Jerry Shanahan, criticised the failure of the Government to increase capital gains tax or review its policy on corporation tax.
BATU general secretary Mr Paddy O'Shaughnessy said building workers would be disappointed there were no new measures to combat the black economy, but he welcomed the extra £45 million to fund local authority and social housing projects. However these predominantly private sector unions did not reflect the general mood last night. "Overall this Budget is going to put Partnership 2000 back on the rails," was the assessment of Impact general secretary Mr Peter McLoone.
His union is particularly pleased that tax credits are being introduced, a measure it has advocated for many years as the most cost-effective way of helping the low-paid.
Mr McLoone also chairs the powerful public service committee of the Irish Congress of Trade Unions. This is expected to begin preparatory talks with the Department of Finance before Christmas on performance-related pay and other issues expected to feature in any successor to Partnership 2000. Such a meeting would have been extremely difficult if trade union concerns about the low-paid had not been addressed. The members of the largest civil service union, the CPSU, are currently balloting on a proposal to withdraw from Partnership 2000, which was fuelled in large part by disappointment at last year's Budget. If Mr McCreevy had not given significant tax concessions to the low-paid this time around, the vote would almost certainly have gone with those within the union demanding withdrawal from social partnership. Now members will probably agree to stay with the national agreement.
The CPSU general secretary, Mr Blair Horan, said the Budget meant an increase of £5.75p a week for someone on £9,000 a year. Last year they only received £3.18p in tax cuts. At the other end of the scale, a PAYE earner on £50,000 would receive £8.14p a week extra this year, compared with £20.19p in 1998.
The weighting of this year's Budget towards the low-paid is even clearer when put in percentage terms. Next April a person on £11,000 a year will receive an increase of 6 per cent in net income, while a person on £50,000 will receive only 1.4 per cent.
There are, of course, disappointments for the trade unions. The Irish Congress of Trade Unions did not persuade Mr McCreevy to link reductions in corporation tax to the implementation of the national minimum wage. There was general disappointment at the miserly £3 a week increase in social welfare and £8 rise in the family income supplement.
Mr Somers was particularly critical of those shortcomings. Both sets of payment are important for the many seasonal, part-time and low-paid workers who are members of SIPTU.
The general secretary of the Irish National Organisation of the Unemployed, Mr Mike Allen, said the failure to increase these payments more not only affected the low-paid, it made it more difficult for the long-term unemployed to enter the workforce.
The failure of Mr McCreevy to introduce more tax breaks for profit-sharing schemes or tax relief to help working parents meet the cost of child care, were other sources of disappointment for the unions, but they can take some comfort from his offer to review the situation.
For all its shortcomings, however, the unions will be well satisfied with this year's Budget. Their success in winning concessions for low and middle-income PAYE earners will enable them to pursue new objectives.
If the problem of trade union recognition can be sorted out, the decks will be cleared for constructing a new type of national agreement to succeed Partnership 2000. To that extent, the ICTU general secretary, Mr Peter Cassells, was right last night when he said: "Today's Budget should be seen as the small start of a new approach to developing Irish society for the new millennium."
The only danger is that some trade union leaders may be too enthusiastic over the Budget. Eaten bread is soon forgotten and members will be pushing soon enough for the things they did not get, such as relief for child care.