Quinn and SIPTU clash over merit of Budget
SIPTU criticism of the Budget drew an angry reaction from the Minister for Finance, Mr Quinn, last night. He was particularly upset at the union's claim that the Government was "sabotaging the partnership approach to the management of the economy".
During his Budget speech, Mr Quinn dwelt at length on the importance of partnership and national pay agreements to economic recovery.
Last night he said that workers were "better off as a result of the Budget and because of pay rises under the Programme for Competitiveness and Work (PCW) and the two previous agreements. Workers are also benefiting from low interest rates and inflation, which is at an historical low."
The average mortgage holder, he said, was £2,000 a year better off because of falling interest rates, compared with the early 1990s.
He was reacting to comments made earlier by SIPTU vice president Mr Jimmy Somers, who accused the Government of "totally reneging on key commitments under the Programme for Competitiveness and Work" in the Budget.
Mr Somers warned that this could mean there would be no new pay deal when the PCW concludes in December.
With the expiry of the PCW coinciding with the Irish presidency of the EU, Mr Quinn is clearly worried at the prospect of another national agreement being put in jeopardy at such a crucial time.
SIPTU, which represents mainly low to middle income PAYE workers, reflects the anger many feel at the minimal tax concessions in the Budget.
The PCW's priorities in relation to personal income tax had not been met, said Mr Somers.
Mr Somers also criticised the Government's failure to remove tax on short term social welfare benefits.
Many SIPTU members are seasonal or part time workers who are hardest hit by this form of taxation.
He gave a guarded welcome to the Budget last Tuesday but when the SIPTU executive met at the weekend attitudes had hardened.
He continued to pay grudging tribute yesterday to social welfare improvements as well as measures to tackle unemployment. But he made it clear that these were insufficient to remove SIPTU's reservations about a new PCW.
As early as last June, doubts were voiced by SIPTU president Mr Eddie Browne and repeated by general secretary Mr Billy Attley three months ago.
The Government increased the PRSI exemption allowance £1,500 a year and the PAYE tax band by £500.
But these concessions were clawed back from all but the lowest paid by the abolition of the £140 PRSI allowance to PAYE workers and the raising of the ceiling on PRSI allowances by £800.
Mr Somers condemned the Govemment's shying away from the National Economic and Social Forum (NESF) proposal that people on Community Employment (CE) schemes should be paid the "going rate" for the job.
The Government can, of course, argue that this NESF proposal was not part of the PCW and the costs of implementation "to the Exchequer would be crippling.
The Minister for Social Welfare and Democratic Left leader, Mr De Rossa, and the Minister for Enterprise and Employment, Mr Richard Bruton, endorsed the NESF recommendations while in opposition, said Mr Somers.
SIPTU's stance is made more worrying given that Mr Browne is now vice president of the Irish Congress of Trade Unions and will lead the negotiations on any successor to the PCW this autumn.
Last week the Taoiseach, Mr Bruton and Mr Quinn went out of their way to pay tribute to the unions for their role in helping economic recovery.
Mr Bruton asked the National Economic and Social Council (NESC) to draw up a discussion document and draft terms of reference for a successor to the PCW.
He even requested the NESC to address Mr Attley's concerns that employers at local level were not observing the partnership approach laid down in the PCW.
Mr Somers's remarks indicate that a lot more may be needed to convince SIPTU that it should sign on for a new national agreement.