The shadow boxing might go on for a few days yet but soon the Government will sit down with the trade union representatives of the country’s 385,000 public sector workers to negotiate a new pay deal. The current agreement, called Building Momentum, expires at the end of this year, so the unions will feel entitled to lodge pay claims in the new year. Ministers will want to have a new deal in place by then.
But not at any price. Every 1 per cent increase in public sector pay costs the exchequer about €250 million, so these agreements are expensive. Last autumn, when the unions secured a 6.5 per cent pay increase over last year and this year, with 3 per cent backdated to February 2022, corporation tax revenues were gushing into the State’s coffers; this year, they are undershooting targets. The Government does not have the sort of freedom it might have anticipated, and this month’s crucial corporation tax numbers will certainly have a bearing on the negotiations.
The unions, on the other hand, will seek inflation-busting increases and know that with a general election now in the middle distance, the Government will be desperate to avoid a wave of public sector strikes in the new year. Their members have seen the real value of their incomes squeezed by relentless cost of living rises and although inflation has abated somewhat, prices are still going up.
The best outcome for the country would be a multi-year deal that gives stability and certainty to the Government’s pay bill and a decent boost to public servants’ earnings, particularly those on lower incomes. A deal should also include the flexibility to address specific issues in individual parts of the public service; the case for a Dublin weighting for younger public servants on modest incomes, for example, is worth exploring. But the unions must show flexibility too, especially on work practice issues. The goal of the public service, after all, should be to serve the public, not to maximise the convenience of the service providers.
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The two sides, it seems, are likely to start pretty far apart. But that’s not unusual. There are also late skirmishes on the basis on which the talks will take place – the unions are demanding the ending of the last of the emergency legislation introduced after the financial crash. This looks set to be overcome and the talks will get under way.
An agreement that benefits everyone, that safeguards the public interest but gives workers a fair pay increase, is attainable with patience, goodwill on all sides and a willingness to compromise.
As Minister for Public Expenditure, Paschal Donohoe has said, there are already many uncertainties emerging in the international economy and so there is a value of a stable and affordable deal.
Time to get cracking.