THE GOVERNMENT has said that it is prepared to invest up to €1 billion in new measures aimed at protecting jobs in vulnerable companies.
The proposal for a new temporary employment subsidy scheme, under which companies could receive payments of up to €200 per employee per week, was presented last night by the Government to trade unions and employers.
The Government proposals will be considered by the executive council of the Irish Congress of Trade Unions at a meeting today. Last night Ictu general secretary David Begg said that there had been a “poverty of ambition on the part of the Government”.
“I can’t say I am happy to be honest because there are different levels of ambition on our side and the side of the Government,” he said, adding that the proposals needed a good bit of reflection at today’s meeting.
Turlough O’Sullivan, of the employers’ group Ibec, said “the Government proposals are capable of being developed and of making a substantial contribution to underpinning employment and supporting enterprise.”
Initially the Government stated that it would invest €250 million in the scheme but in further talks with unions late last night it said that the final amount allocated to its “jobs agenda” could reach €1 billion if the measures proved to be effective.
The new subsidy scheme would be limited to 15 months or until the end of 2010, whichever is the earlier.
The scheme would be open to companies in the manufacturing or international traded services sector but which were not in financial difficulties up to July of last year. However, the Government said that the companies involved “must be judged to be sound, robust and have sustainable business models”.
The Government has also said that it would invest up to €100 million per annum in a new pension insolvency scheme which would seek to assist workers and pensioners in cases of “double insolvency” where both the pension scheme and the company are in financial difficulties.
The Government said that this new scheme would operate on a pilot basis for three years. It said that under this arrangement existing pensioners would be “eligible to a top-up of 100 per cent of their pension promise or €12,000 per annum, whichever is the lesser”.
“Active and deferred scheme members would be eligible for a top-up of 50 per cent of their accrued entitlements or the equivalent of €6,000 per annum, whichever is the lesser.”
The Government said that it would further monitor with the social partners measures that may be needed in the future to assist people with mortgage repayment difficulties.
It has also proposed a new formula to allow workers to pursue pay increases awarded under the social partnership agreement last autumn in profitable companies.
One key element of the proposals is that where a union maintains that a company can afford to meet increases it must provide prima facie evidence to back up its claim. Up to now the company has had to prove inability to pay.
The Government also said that the effectiveness and efficiency of the public service was a matter of “strategic national importance”, given the pressure on public finances.
It said it was committed to a “collaborative approach” to public service reform, which would be based on commitments to flexibility and responsiveness in the context of agreement to reflect best practice in terms of organisation, structure and performance across each sector of the public service “and where change is facilitated on an agreed and timely basis in the context of an agreed approach to industrial relations issues which arise”.
The talks come as the Government awaits publication – expected today – of a report from the International Monetary Fund on the prospects for Irish economic recovery.
Former secretary of the department of finance Dr TK Whitaker said yesterday that pay cuts or shorter earning hours were preferable to the loss of jobs in the current economic crisis.