The Government and the Irish Congress of Trade Unions have agreed to establish procedures to examine ways "of underpinning moderate wage increases with significant tax reform weighted in favour of lower and middle incomes".
The agreement came at what one participant described as a "frank" meeting in Government Buildings yesterday between senior trade unionists and, on the Government side, the Taoiseach Mr Ahern, the Tanaiste Ms Harney and the Minister for Finance, Mr McCreevy. A joint statement afterwards included a commitment to reward pay moderation with further tax reforms for low and middle income groups. One specific commitment given was that a report from the Working Group on Tax Credits would receive early consideration. A switch to tax credits would particularly benefit those on low income.
Another commitment was that the Government would shortly convene a meeting with the ICTU and the Irish Business and Employers' Confederation on the implications of EMU. The meeting would discuss the implications for competitiveness, employment and inflation, including house prices.
It would also discuss how best to develop profit-sharing schemes and employee shareholding.
Both sides committed themselves to developing partnership at company level and, with the employer organisations, accelerating progress "on the equality agenda - including child care - and to modernise our industrial relations system, including finalising the work of the High-Level Group on Trade Union Recognition."
Leaving the meeting, Ms Harney defended the tax strategy adopted in the Budget but said that the Government had agreed to work with the ICTU to weight further tax cuts towards the lower paid.
She also urged Ryanair to avail of the opportunity of Labour Court intervention in its recognition dispute with SIPTU to bring it to an end.
The general secretary of the ICTU, Mr Peter Cassells, said afterwards that both sides had acknowledged there were tensions developing in Partnership 2000. They had put in train procedures to tackle the problem. "Obviously we are not going to resolve them all in one meeting like today's", he added.
Another senior trade unionist described it as a "getting to know you" meeting. Both sides knew where they stood and it now remained to see if they could do business.