Future increases in the national minimum pay for workers to bring about a planned “living wage” could be put back as the Government concentrates on boosting competitiveness in light of rising international trade tensions.
Minister for Public Expenditure Jack Chambers said that the “nature and scale of increases may be extended over a longer period”.
He said the Government was considering how the overall timing of wage increases should be sequenced.
About 195,000 people earn the minimum wage in the Republic, which from January was set at €13.50 an hour.
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The previous government announced that the national living wage would replace the national minimum wage from 2026. The living wage would be set at 60 per cent of the hourly median wage in any given year.
This is in line with the recommendations of the Low Pay Commission and would be achieved by incremental adjustment to the national minimum wage.
Separately, Mr Chambers also told the This Week programme on RTÉ Radio 1 that the launch of an auto-enrolment scheme designed to provide a pension plan for thousands of workers could be delayed again.
The scheme, which has been under discussion for about 20 years, was scheduled to start in September.
However, Mr Chambers indicated that the launch of the scheme could be pushed back by a few months.
He said the direct commencement date for the scheme was under consideration by Minister for Social Protection Dara Calleary.
He said the Government was committed to introducing a system of pension auto-enrolment.
Under the plan, employees without a pension would be automatically enrolled into a savings scheme, which will be partially funded by businesses.
“I would say that auto-enrolment is going to be absolutely essential to build sustainability for pensions in the long term.” He said Mr Calleary would give an overall update to the Cabinet in the next few weeks.
Mr Chambers added the Government was looking at the overall cumulative impact on costs for businesses and the competitiveness within the Irish economy.
“The number one focus for Government is to protect jobs, to drive competitiveness, and that’s why, separately, we will be establishing a cost of business advisory forum to sustainably manage the overall costs for business.
“Within that, the Government is considering how we sequence the overall timing of the implementation for the minimum wage, and that’s something that will be brought forward to Government shortly.”
Mr Chambers said this meant the work of the Low Pay Commission – which makes recommendations to the Government on rates to apply – would continue.
However, he said, “the nature and scale of the increases may be extended over a slightly longer period”.
Mr Chambers added: “There would still, I expect, be increases, but it would be managed in a more sustainable way that reflects the need within the Irish economy, to preserve jobs, [and] to ensure we manage the overall cost base.”
He also warned that if international trade tensions on the basis of tariffs imposed by the Trump administration escalated to a point that the European Union imposed a tax on digital services, it would mean enormous damage to the Irish and the European economy.
The pause in many tariffs announced last week by US president Donald Trump to allow for talks was welcome, Mr Chambers added, but “there are still all downside risks for the Irish economy and indeed the European economy”.
“When you take Ireland’s position ... we have built the last number of decades of growth and prosperity on the back of international trade. Even any eventual outcome which undermines the current trading relationship represents downside risk.”
The Minister said the State needed to take action to control issues “within our sphere” to strengthen competitiveness within the Irish economy.
