While stating that the Government was determined to do everything in its power to ensure a new national partnership agreement was put in place as quickly as possible, the Minister of State for Finance, Mr Martin Cullen, emphasised the need to develop a new approach on public service pay.
Public service pay constituted a very significant percentage of overall public expenditure, he said. In this context, the National Economic and Social Council (NESC) had highlighted the importance of reforming the current public service pay determination system, particularly given the close association between public service pay and public expenditure, and the link between pay and public service reform generally. It had also highlighted the need for a greater relationship between pay and performance, and it had mentioned the possibility of greater decentralisation of pay management to government departments or agencies.
Mr Cullen said that developments under the Programme for Competitiveness and Work, and more recently, had clearly demonstrated that a new approach to determining public service pay must be developed for the future. "We cannot continue with the system of fixed analogues and rigid internal relativities that has bedevilled us in the past. Private-sector pay systems have become more flexible and responsive to performance at enterprise level.
"Similarly, we need a new approach to public service pay which incorporates greater sectoral flexibility - to deal with the particular operational requirements of each sector - and which supports the modernisation of the public service, so that we continue to deliver good services efficiently to the public. It must, of course, meet the reasonable aspirations of public servants themselves but must also be consistent with an appropriate evolution in public expenditure."
Mr Cullen said success in employment creation during the recent years of partnership had transformed the poverty position. A new partnership agreement would ensure continued progress in reducing poverty in society in line with the aspirations of NESC for a more inclusive society.
On child benefit, he said payments had traditionally provided income support to families while avoiding downsides from an employment incentive perspective. More recently, it had been suggested they could help resolve difficulties in the childcare area. NESC acknowledged considerable complexities and difficulties in attempting to produce a coherent and equitable strategy which would reconcile the key objectives involved.
The government would seek to address the various elements concerned in future budgetary decisions.