The warning by the Minister for Finance, Mr Quinn, that public servants must face up to their responsibilities under the Programme for Competitiveness and Work (PCW) underlines the Government's increasing concern about the current wave of industrial unrest. Mr Quinn's warning - delivered at the weekend meeting of EU finance ministers in Verona - was clearly intended as much for his European colleagues as for the trade union movement in this State. But the message was clear and unequivocal: the Government remains firmly committed to the budgetary discipline which has helped Ireland achieve the kind of non inflationary growth that is the envy of most other EU states.
On radio yesterday, the Minister signalled that any government concessions on pay at this juncture would move the economy down a "slippery slope" towards renewed inflationary pressures and economic slowdown. Mr Quinn's evident frustration with the public sector trade unions is understandable: there is a clear danger that the economic gains of recent years, which have put Ireland on course to meet the Maastricht convergence criteria, could be frittered away by excessive pay deals.
The Minister's direct accusation that some of the current wage demands represent a breach of the PCW is also well grounded: he is right to remind the unions that the terms of the PCW must be respected. But in some respects the Government has only itself to blame for the current industrial unrest. The excessively modest tax cuts in the Budget and the failure to launch any structural change of this State's grossly inequitable tax system have fuelled a sense of grievance amongst many workers.
On Mr Quinn's own admission yesterday, middle income groups "felt they got nothing" from the Budget. Some concessions were given to lower paid workers, who are now the focus of the industrial action by the Civil and Public Service Union, but it must be borne in mind that this group is still seeking progress on claims dating back to 1989. That said, public sector workers did get a good deal under the PCW, with an 8 per cent increase over three years and the promise of other productivity related increases. And there is little doubt but that the sense of grievance of many public sector workers is exaggerated. Many enjoy pay and conditions of service which are the envy of most workers in the private sectors, not to mention the security of State employment.
But the current wave of industrial unrest may signify the pent up frustration of many workers about the tax system. The public sector may have gained wage increases but the PAYE burden means that the real impact is marginal for many workers, even in the midst of an unprecedented economic boom. Mr Quinn is now promising very significant tax cuts in next year's Budget in order to mollify the PAYE worker, but this appears unlikely to quell the current industrial conflict in the public sector. The Minister's insistence on continued budgetary discipline is admirable. There is nothing to be gained by caving in to any and every demand from the public sector. But a signal that the Government is, at last, ready to embark on a programme of comprehensive tax reform might help to avert a potentially damaging series of industrial conflicts.