Trade union leaders and the Opposition yesterday criticised Government calls for workers to exercise wage restraint just weeks after Ministers accepted large pay increases for themselves.
With talks on a new national pay agreement due to begin in the new year, Irish Congress of Trade Unions (Ictu) general secretary David Begg said the Government's stance was not credible and would not carry weight with union members.
In an address to the social partners yesterday, Minister for Finance Brian Cowen said "a realistic approach" to wage demands was essential if competitiveness and living standards were to be maintained.
He said that in preparing for new pay talks, it was "important that expectations are kept in line with the economic realities we face".
Taoiseach Bertie Ahern told the same meeting that in recent months the economic outlook had changed. Forecasts for economic growth had been lowered due to a combination of domestic and external factors.
Mr Ahern defended the recent pay increases for Ministers and top public servants which will see his own salary increase by €38,000. Trade unions would understand that the pay increases had been proposed by an independent mechanism, he said.
He added that implementing pay awards for the public service under the existing Towards 2016 national agreement would cost €1.7 billion.
However, Mr Begg said that having accepted its own increases in recent weeks, the Government could not credibly ask for wage restraint. "It is not a message that will carry much weight."
It would have been more prudent if the Government had decided not to accept the pay award to Ministers, at least for the time being, he said.
Eoin Ronayne, deputy general secretary of the Civil Public and Services Union, said that while pay restraint might be fine for people on high salaries, for his members earning €23,000 and upwards, belt-tightening was not an option.
Although the union recognised that the climate was difficult, the recent pay awards for the top levels in the public service had raised expectations regarding the outcome of the forthcoming bench- marking report and the next pay round negotiations, he said.
Siptu president Jack O'Connor said the recent pay review for senior staff showed that people at top levels in business were awarding themselves "multiples of pay increases at the expense of the people at the bottom".
The director general of employers' group Ibec, Turlough O'Sullivan, said that the Government and the social partners had to do everything possible to control inflationary pressures in the economy. "Our pay and non-pay costs must be brought back into line with trends in our trading partners," he said.
Fine Gael enterprise spokesman Leo Varadkar said "wage restraint should begin at home and the Taoiseach and his Ministers should lead by example and refuse to accept the recent pay award".
The current 27-month pay deal, negotiated as part of the Towards 2016 national agreement, is due to expire in the spring. Mr Ahern said talks on a new pay agreement would begin in February.
Mr Cowen said that he had projected in the pre-budget outlook that there would be a moderation in the growth rate from 4.75 per cent this year to 3.25 in 2008.
"I expect GDP growth to revert to its trend rate of around 4 per cent by 2010, but this is predicated on us taking the right decisions now and the external picture not worsening," he said.