The Government wants to introduce a performance-related pay structure in the public service within a year. Its determination to make fundamental changes in existing systems was emphasised by a spokesman last night, after the Taoiseach had identified the move as a key part of a new national agreement.
Yesterday Mr Ahern began the groundwork for an accord to follow Partnership 2000 by asking the National Economic and Social Council to develop a strategy to form the basis of such an agreement. He also asked the NESC to consider a longer-term vision of the State around which the Government and social partners could build a framework for the next decade and beyond.
The NESC, which traditionally provides the framework document for national agreements, will conduct its work in the context of the globalisation of the world economy, increased European integration and the need to ensure sustainable growth and social inclusion.
The Government plans to open discussions immediately with the Irish Congress of Trade Unions and its public services committee on a new agreement.
It is also attempting to conclude the Programme for Competitiveness and Work, which nominally ended in March 1997 but under the terms of which nurses and others continue to advance wage claims.
"We must avoid returning to the inward-looking policies of the 1970s and we must continue to focus on the fact that Ireland can only prosper if we keep the competitive edge that we have developed over the last 11 years," Mr Ahern told the first meeting of the new NESC yesterday.
Amid concerns about the growth of the public service pay bill, Mr Ahern stressed the need to restructure the pay deal. He wanted a new emphasis on "performance management" and on how public pay could be more closely linked to performance. "Events since the summer have made that task even more urgent," he said.
That message was echoed by the Minister for Finance, Mr McCreevy, who warned of the inflationary pressures of wage rises which, he said, could mean smaller tax cuts in the Budget.
"Much depends on whether we give in to some or all of the demands on us," he said. "But we have to avoid a cocktail that will blow all our success apart."
Mr McCreevy also warned that sights must be adjusted to become more realistic. "Large-scale and widespread tax cuts carry too serious inflationary risks for the follow-on to Partnership 2000," he said.
It is understood the Department of Finance will be signing off on all the outstanding claims under the PCW next week and that the move towards the next national agreement will form part of the preamble to the Budget.
Mr Ahern emphasised the need to provide an adequate physical and communications infrastructure, given the likely fall-off in EU assistance. Further improvements had to be achieved in the educational system including the promotion of lifelong learning as well as dealing with the problems of early school-leaving and educational disadvantage.