McCreevy warns delegates on pay claims


The Minister for Finance, Mr McCreevy, warned that there could be no moving away from the terms of Partnership 2000 as failure to deliver on pay moderation would undermine the whole basis of national partnership and threaten the progress that had been made.

The Minister said that while the bulk of local bargaining claims under the Programme for Competitiveness and Work (PCW) had now been settled, it was essential that the remaining PCW local bargaining cases be resolved within the accepted cost parameters. Failure to deliver on pay moderation would threaten the areas of job creation, competitiveness and social inclusion.

In managing the public finances, control of public service pay was a vital element, with pay accounting for around half of current expenditure, he said. Pay settlements in the public service had to be in accordance with the terms of the national pay agreement. National partnership had worked.

In his opinion, the Minister said, the partnership approach had played a central role in economic success and no one wished to see that success put at risk.

The parties to Partnership 2000 recognised that problems could arise as much in periods of strong economic growth as in periods of recession, Mr McCreevy said.

"Let us not undo all our good work by fooling ourselves into believing that we can reward ourselves with large increases in pay and still expect to enjoy the benefits of strong growth. This strikes me as a clear example of wanting to have one's cake and eat it," the Minister said.

The performance of the Irish economy in the 1990s had simply been incredible and at times had defied all logic and confounded most economists. Taxation was an issue which was to the forefront of most people's minds in the lead up to Budget day.

"I have clearly signalled that the taxation package this year will be aimed at the low to middle-income earners in particular, by delivering further tax reliefs on an appropriate scale and by increased spending for social inclusion," the Minister said.

A principle aim of the 1999 Budget must also be the maintenance of low inflation and ensuring a "soft landing" from the current exceptionally high rates of economic growth.

Ways would be examined of raising revenue, Mr McCreevy said, aimed at supplementing the revenue yield from the business sector to ensure that it would continue to contribute an appropriate share of overall tax revenue.

The Minister of State for Science Technology and Commerce, Mr Noel Treacy, said the outlook for the future looked promising with further strong growth expected. We could not afford to become complacent, he said.

If growth was not kept to sustainable levels, the inevitable outcome would be the emergence of adverse economic conditions, he said.

Mr Tom Kitt, Minister of State for Labour, Trade and Consumer Affairs, told delegates that Ireland's prospects looked very good. However, it would be foolish to imagine that they did not have real problems now and would not face even greater ones. What was important was that they did not squander the opportunities that they now had to ensure a sound fiscal basis for the economy and the maximum level of social integration and inclusion.

Minister of State at the Department of Finance, Mr Martin Cullen, said that it was his aim to ensure that in this changing Ireland, government at every level would be both willing and able to respond to the needs of ordinary people and would be clearly accountable to them for the decisions that they made.

Mr Noel Heaslip, North Kerry, speaking on a motion calling for bigger tax allowances and concessions to be given to lower-paid workers, warned that if the economy slowed down, it would be the lower-paid workers who would feel the effects. The lower-paid workers were the back-bone of the economic success.

Mr Gene O'Carroll, Sligo-Leitrim, speaking on urban and rural renewal schemes said that many rural communities had all but disappeared. They wanted the chance to bring young people back to the west of Ireland. Ms Ann Lait, Wicklow, called for the Minister to exempt retirement pensions from income tax. Pensions were funded by individuals out of their money which was already taxed. Pension funds were giving a poor return in this economy.

"Is it fair that we should ask them to pay twice?" she asked.

Ms Mary Kirwan, Laois-Offaly, speaking on public pay settlements, said that people were being channelled into courses for which they had no skills.