'Not credible' to consider public pay deal amid crisis, warn ministers
Serious doubt has been cast over planned pay increases for 300,000 public servants later this year.
Several Fine Gael ministers have said it “would not be credible” to consider it because of the impact of Covid-19 crisis on the Irish economy which has swung into recession.
As government formation talks commence today, members of the government have expressed strong concern over the ability of the next government to be able to stick to the commitment to not increase taxes, cut welfare rates and to enter a new public sector pay deal given the collapse in the public finances.
Speaking to the Irish Examiner, current Cabinet ministers have expressed concern about the credibility to maintain promises made by Taoiseach Leo Varadkar and Paschal Donohoe.
“There is serious concern being expressed by colleagues about our ability to meet a new pay deal when we have a likely €30 billion hole in the public finances, as well as not introducing tax increases or welfare cuts,” said one minister.
“Yes, public servants have done great work over the past few weeks, but they have been paid. Look at the small businesses, the private sector workers who have lost their job. We need to defend them,” another minister said.
It is clear that a divergence of opinion exists between the parties as senior Fianna Fáil sources have insisted the public service “be looked after” in terms of a pay deal, given the effort to address the crisis over the past two months.
“What message would that send if we delayed or axed the new deal after the huge effort the public service have made during this crisis. I can’t see us allowing that,” said a senior Fianna Fáil source.
The current deal, known as the Public Service Stability Agreement (PSSA) runs from 2018 to October and has a cost of €877 million.
It has emerged that initial talks between government and union leaders have taken place before the onset of the pandemic about what a new deal would look like, but nothing since then.
Senior union sources have said they have heard suggestions that the last round of pay increases due in October might not be paid, but any suggestion of such a scenario would “go down very badly.”
“We expect the deal to be honoured and honoured in full. As for a new deal, we stand ready to negotiate,” said one union leader.
Meanwhile, writing in today’s Irish Examiner, Tánaiste Simon Coveney has said the first job in the talks between Fine Gael, Fianna Fáil and the Greens will be to establish trust.
“Our first job will be to build trust. Without strong relationships governments don’t come together. In the next few weeks we will attempt to produce a program for government, with our negotiating partners, than can deliver on all of the challenges above, and more,” he said.
Other parties and independents may choose to join the process too. I’d welcome that, but from today this process moves ahead as time is short, he said.
Ireland needs a government with authority and a strong majority to give the political leadership demanded by our current emergency.
“The challenges that face the next administration are vast, but they are surmountable.
“Rebuilding our society and economy after the trauma of coronavirus, a fundamental shift in pace and ambition on climate action and delivering more for our citizens on health and housing are just a few of the major issues awaiting attention,” he added.
