The Government should cut 10,000 public sector jobs and reconsider the provisons for the payment of wage increases under the Benchmarking process, the employers' body IBEC advised today.
Mr David Croughan, IBEC's chief economist, said that the Government and the sheletered sectors have not yet made the painful adjustment to the tougher economic climate made by companies competing in foreign markets.
With tax revenues falling behind target in line with the slowdown in activity IBEC called on the Government to cut its wage bill by reducing public sector employment. This could be done, IBEC suggests, by doubling the target of non replacement and voluntary retirement of civil servants from 5,000 to 10,000.
The comments come in IBEC's quarterly review of economic trends oublished today.
But of greatest concern to IBEC is the Government's commitment to benchmarking which was framed in more prosperous times.
Benchmarking would add euro1.1 billion to Government expenditure, excluding the apparently as yet unquantified implications for pensions. If such costs were to be incurred they must be linked very demonstrably to sustained productivity improvements, IBEC said.