The Government is to meet senior trade union leaders today to discuss Partnership 2000. Union leaders sought the meeting because of their concerns over tax reform, inflation and EMU.
Union recognition is not on the agenda for today's meeting, but it is expected to feature significantly in the discussions. Trade union leaders are predicting that the meeting will be a "tough" one, in which they will make clear their concern that this Government is not fully committed to meeting obligations entered into by its predecessor, when Partnership 2000 was signed.
Union leaders will be saying that the Budget failed to deliver the sort of increases in personal allowances and tax bands for lower-income groups they anticipated when they sold the deal to members. They will also warn the Government that further pay demands could be made, if inflation takes off because of EMU, or "overheating" in the economy.
This is the first time since the present generation of national agreements began in 1987 that a Government has been elected that has no members who were involved in negotiating the agreement in force. The only members of the present Cabinet involved in negotiating previous agreements are the Taoiseach, Mr Ahern, and the Minister for Public Enterprise, Ms O'Rourke.
The meeting was sought by the general secretary of the Irish Congress of Trade Unions, Mr Peter Cassells, 13 days ago. In his letter he expressed concern "that the benefits of the record levels of growth in the Irish economy are not being shared fairly among all our people".
It will be attended on the Government side by the Taoiseach, the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney and the Minister for Finance, Mr McCreevy.
Besides Mr Cassells, the ICTU delegation will include the president, Mr Edmund Browne, treasurer, Mr Billy Attley, and members of the general purposes committee. The new president of SIPTU, Mr Jimmy Somers, is also expected to be there.
Mr Somers is a member of the Government's High-Level Group on trade union recognition. Yesterday, he said that the issue of union recognition would be raised because of the tension it was causing, not only for his own union in the Ryanair dispute, but throughout the movement.
The general secretary of IMPACT, Mr Peter McLoone, said yesterday that "trade union recognition is the biggest banana skin out there", in terms of upsetting Partnership 2000, because of the general atmosphere of distrust that now exists.
The December Budget had been a major disappointment. "Mr McCreevy's statements in defence of it suggested that Partnership 2000 was a deal done with the previous government and his electoral mandate will take precedence. A lot of us went on the record at the time the deal was going through that tax cuts would benefit people at the lower end most," Mr McLoone said.
The Budget had not even achieved its own objectives. It was now clear that there would be more people paying tax at the top rate by the end of 1998 than there were in 1997.
Given fears over inflation, the impact of EMU and union recognition, Mr McLoone said that, "At this stage it takes very little to turn people sour, especially if they think the Government is only interested in Partnership 2000 to keep workers in line."
The general secretary of the Irish National Teachers Organisation, Senator Joe O'Toole, described today's meeting as crucial. "It's as much about relationships as issues. We have to be clear where we all stand.
"Are we all working together, or is this Government going off in another direction? We need answers that go beyond `Yea' or `Nay'. "
The Government is expected to outline what is doing to contain inflation, including the problem of spiralling house prices.