The vice-president of the Irish Congress of Trade Unions, Mr Joe O'Toole, has reiterated his warning to the Government that the unions will seek pay rises to compensate for inflation if the Budget fails to protect increases negotiated in the national agreement.
"Inflation is going north, the value of money is going south. We have all the ingredients for a perfect storm this winter if something isn't done," he said. "If the Government does not act, the trade union movement will walk away from this agreement."
Mr O'Toole added that if inflation ran at 5.25 per cent or 5.5 per cent, instead of the 3 per cent on which the national agreement was predicated, workers could be compensated through a 2.5 per cent tax cut or a 5 per cent gross increase in income.
SIPTU general secretary Mr Des Geraghty said inflation could well reach 7 per cent and items such as childcare, foodstuffs, housing, transport and alcohol were being particularly hard hit.
There was "now an unanswerable case to be made for a review of the figures in the Programme for Prosperity and Fairness when the social partners meet next month," he said.
The director of economic affairs at IBEC, Mr Brian Geoghegan, said there was "absolutely no way we will negotiate any pay increases. We are already losing our competitiveness in the euro zone".
Mr Geoghegan supported a call by the Small Firms Association (SFA) for the 1.75 per cent health levy to be abolished. The SFA chairman, Mr Kieran Crowley, said the cost of the measure would be £492 million and could easily be afforded.
IMPACT deputy general secretary Mr Shay Cody accused the Government of "gambling with the social partnership model that has made the Irish economy the envy of Europe".
