Public sector employees should grab the new pay offer from the Government with both hands. The 10.25 per cent increase over two and a half years is ahead of likely inflation and will match or exceed likely increases in the private sector.
The outcome had looked broadly predicable for some weeks as a middle ground between what the Government had initially offered and what the trade unions had sought. There is always an element of performance in such negotiations and the public might well wonder whether all the drama and late nights were entirely justified.
At a time when all employers are struggling to attract staff and inflation, while easing, remains a factor, the offer on the table looks reasonable. In this context, and in the light of wider economic uncertainties, public sector employees are unlikely to get wider support were they decide to reject the deal. There are – correctly – more generous terms for lower paid employees. Additional locally negotiated payments are available under the deal – it is essential that these do not accrue automatically but reflect increased productivity. And due to the increments structure, many public servants will receive higher percentage increases in pay than the basic terms.
Facing into a general election and with an exchequer flush with cash, Minister for Public Expenditure Paschal Donohoe did not have a particularly strong hand to play in the talks. He was correct to resist union demands for a 12.5 per cent rise over 2½ years, but did give significant ground from the State’s original offer.
The deal points towards significant further increases in State spending; not only will pay be rising but employment is also set to increase in many areas. To date, much of the extra cost of this expansion has been met by soaring corporate tax receipts. This may not come to a sudden halt, but the likely gradual tightening of the budget position will, sooner or later, inevitably raise the question of how to pay for a bigger State. In this context, the public is entitled to expect better services in return for higher pay.