The State's largest public service trade union Impact has welcomed comments from Minister for Public Expenditure Brendan Howlin indiciating that the Government plans to begin talks with unions next year on the reversal of cuts to public sector pay and pensions.
A spokesman for Impact , which represents some 55,000 public sector workers, said the Minister’s comments in an interview with The Irish Independent were “encouraging” but he noted that the potential benefits would not be “felt today or tomorrow”.
He said the union had been keen to discuss pay recovery with the Government once the State’s deficit fell below the targets set as part of the EU-IMF bailout and stabilised.
In May, the then tánaiste Eamon Gilmore told Imapct's national conference that the next time the Government discusses pay with public service unions it will be with a view to increasing, not cutting, wages. He said the country should "look forward" to seeing wages increase and living standards improve.
In the interview published today, Mr Howlin said talks would begin next year on reversing elements of the Financial Emergency Measures in the Public Interest Acts (FEMPI) but that there would not be a sudden restoration that could jeopardise the steps taken to get the public finance back in order.
“Next year, we certainly will have to engage with the unions on the orderly winding down of FEMPI and who should benefit first and how that should be done over time,” Mr Howlin told The Irish Independent.
“We have to have agreement with the public sector unions that it is not going to be a big bang, because that would undo all the good work we have done over three years. There has to be an orderly wind-down, as opposed to a sudden ending.”
Since the economic crisis set in some 300,000 public sector works have been hit with levys on pensions and reductions to their pay. These included the 2009 pension levy, which hit workers with a cut of some 7 per cent, and a 2010 paycut which averaged out at some 6.5 per cent. There were further cuts for workers earning more than €65,000 as part of the Haddington Road Agreement.
A spokesman for the Department of Public Expenditure said planning around any such developments was at a very early stage. He noted that public sector pay was covered by the Haddington Road Agreement, the provisions of which run until June 2016.
Tánaiste and Labour party leader Joan Burton last week said the fact that the economy was growing faster than expected meant the Government would be able to ease austerity measures when it sets the budget for 2015 in October.
Minister for Finance Michael Noonan has said he expects to take considerably less than the long-flagged adjustment of €2 billion out of the economy in the budget, which had been seen as necessary to bring the State's deficit below 3 per cent of GDP next year.
The Coalition has also published a “statement of priorities” for its remaining 21 months in office which included a commitment to publish a tax reform plan “to be delivered over a number of budgets to reduce the 52 per cent tax rate on low- and middle-income earners.”
