Few sparks fly as partners do business

The opening round of the special review of the Programme for Prosperity and Fairness was expected to do little more than allow…

The opening round of the special review of the Programme for Prosperity and Fairness was expected to do little more than allow employers and unions to square up to each other over inflation. Everyone would try to place the blame for the problem elsewhere and adjourn for August in the hope their constituents would be happy with the verbal gymnastics.

In the event, there was remarkably little acrimony and a lot of work done on trying to identify an agenda of common interest. The only sparks flew, predictably, over the proposal by the Irish Congress of Trade Unions that, with Irish business doing so well, employers could well afford to pay more PRSI to finance enhanced childcare and leave facilities.

The outgoing director general of the Irish Business and Employers' Confederation, Mr John Dunne, dismissed the proposal as "totally misdirected and quite unnecessary given Exchequer income flow. It would only serve to push up labour costs and reduce competitiveness".

His successor-designate, Mr Turlough O'Sullivan, described the ICTU proposal as "negative". It would "crucify a lot of businesses, especially smaller ones in exposed sectors".

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The ICTU is unlikely to give up its tax reform agenda that easily but union leaders know they are in for the long haul in negotiations this autumn and are anxious to see more immediate action. Their mood was summed up by the SIPTU general secretary, Mr John McDonnell.

He said moves in areas such as childcare, social welfare and tax relief on gain-sharing schemes might have to wait for the Budget but unions "need action very soon. What impressed workers in the latest set of measures was the clampdown on VHI. Now we need to concentrate on petrol, fuel and public transport costs.

"One of my members told me that 12 months ago he was paying £28 a week getting to work and now he's paying £40. That's the kind of thing workers see as real inflationary pressure. That's why they have to have action directed to that area. We need reductions in duty and State subsidies to reduce bus and rail fares."

What was interesting was the complimentary private reaction of some individual business leaders to Mr McDonnell's remarks. Given that the Irish Business and Employers' Confederation is urging "some reduction in indirect taxes, including VAT and excise duties", as a way of reducing pressure for a pay review, common ground with the unions could emerge relatively quickly.

No one can accuse union leaders of lacking creativity. MSF secretary Mr Jerry Shanahan has been quick to exploit the proposal by the Minister for Finance, Mr McCreevy, that 2001 be a nine-month tax year in order to align the tax and calendar year from 2002 onwards. As he left the plenary Mr Shanahan said he would be calling for the tax-compliant PAYE sector to be given a full year's tax relief for the nine months of 2001 and he suggested it could be funded out of DIRT repayments from the banks and individual investors.

At the end of yesterday's session the mood on all sides seemed to be that business could be done. The acknowledgements by the Taoiseach, Mr Ahern, and the Tanaiste, Ms Harney, that the erosion of living standards for those on low incomes would also have to be addressed allayed fears in the community and voluntary sector that its interests would be lost in the tussle between ICTU and IBEC.

Mr Ahern reminded everyone that the economic success of recent years was based on people "working very hard together to refine social partnership". There was now a framework that allowed unions, business and the other social partners "to break out of a damaging, short-term reaction to complex issues".