The general secretary of the Irish Congress of Trade Unions (Ictu), David Begg, said the Government’s proposals for a pension levy for staff in the public sector were more onerous than workers would bear.
Speaking after leaving Government Buildings in the early hours of this morning he said the difficulty for the trade union movement was that the concentration of the levy on middle and lower income groups was “much heavier than had been expected".
He said the largest concentration of public servants was in the lower and middle income bands and for the Government to generate significant revenue from the pension levy this was where the emphasis had been placed.
He said the Government's proposal was to raise €1.35 billion from the levy which would have been applied according to a complex formula ranging in scope from 3.8 to 9.6 per cent.
However he said the levy proposals would have proved to have been very onerous for those in the low and middle income groups and would have represented “more than the traffic could bear”.
"This would cause such a shock to the system that we would not have been able to sustain it and we would have had the worst of both worlds where we would put out some proposal to our own people who might simply rebel against it and would not really be able to assimilate why it was happening."
“It was a judgment call - we could not do it just today. It was just not possible," he said.
Mr Begg said the process to agree a national economic recovery plan with the Government and other social partners had “run out of road”.
He said that while progress had been made in some areas, this was not sufficient to build a platform on which an overall agreement could have been constructed.
He added there had also been a separate problem of the uncertainty regarding the relationship of the employers’ group Ibec and the Construction Industry Federation to the agremeent overall “because we needed everyone to be involved if there were to be a social solidarity pact”.
He said the combination of all of those issues as well as the fact that the social partners were not able to bring matters to a conclusion in terms of measures to assist those with mortgage arrears and new protections for pension and the lack of time meant that there had to be recognition that “we were not going to be able to pull this off in this time period”.
“I think you have to understand that this was a very bad situation from the beginning and it was a question of us trying to mitigate the worst effects of a bad situation. We do have to recognise that the country is in an appallingly bad state economically, the public finances are in a very bad state as well."
“Any combination of those circumstances was always going to be bad and it would have required a magical formula to bring together some social solidarity pact that you could unite everyone around and gaining the acceptance for the rough and tough measures contained in the proposals."
Mr Begg said the trade union movement would have to wait and see the Government’s decision in relation to public sector pay after the collapse of the talks on a economic recovery plan. He said that it would not be very sensible for him to say anything that might make the atmosphere more difficult.
Asked whether the breakdown of the talks could herald the end of the social partnership process, which has operated for the last 20 years, Mr Begg said: “The challenge of trying to find an accommodation in such difficult circumstances has just eluded us at this time, but we really should not draw down the barrers."
“I think really we need to keep the channels of comunication open. We all live in the same country and we can not walk away”, he said.
Asked about possible industrial action in the public sector, Mr Begg also said that if something was imposed that was always a risk.
Employers' group Ibec said today the Government was right to seek an agreement on economic recovery with the social partners but if this was not achieveable then "it had to govern".
Ibec director general Turlough O’Sullivan said he regretted that it was not possible for the Ictu to sign up for the Government’s plans for adjustments to the public finances.
He said Ibec believed that these adjustments were the minimum required at this point.
“We think a €2 billion beginning is just about the minimum”, he said.
Mr O’Sullivan said he did not believe that the era of social partnership was over.
"We are certainly of a mind that we are part of a ten-year strategy, Towards 2016, and we are there for the long haul," he said.
However he said that all his colleagues were conscious of the state of the economy.
“These are not normal circumstances in which the pursuit of industrial action can bring forth a certain positive result for everybody. This is very negative situation and we have to be conscious of that”.
“On the other hand no trade union leader will ever surrender the requirement to defend the interest of a particular group of workers and I believe our people will act very responsibly in this," he said.
The Impact trade union representing public sector workers said the government and business groups had not offered sufficient concessions in return for the sacrifices workers would have to make.
"It would be very premature to jump to the conclusion that there will be threats of industrial action," an Impact spokesman added.
Chambers Ireland chief executive Ian Talbot expressed disappointment at the failure of the talks saying private sector workers were being left to carry the burden.
“We call on the Government to make the decisions needed to support enterprise, implement the cuts necessary to control expenditure and drive a speedy return to growth in the Irish economy,” he said.
"Ultimately, wealth creation can only come from the private sector. Its 1.8 million employees desperately need to see leadership as they are most exposed to the burden of this downturn in terms of company liquidations, job cuts, pay freezes or reductions and losses on pensions," he added.
