The Government must get value for money for public sector pay benchmarking and should seek to postpone and reschedule the payments if they will lead to higher taxes or charges, according to IBEC.
The lobby group believes that Government should reserve the right to postpone the payment of the 75 per cent of the awards still to be made, if they would lead to additional taxes or higher charges.
Already 25 per cent of the payments have been made, with a further 50 per cent due next January and the remainder to paid on June 1st, 2005. IBEC says this timetable should be rescheduled if it was set to lead to higher taxes.
It is also insisting that productivity improvements should be delivered. The returns in terms of improved public services should be "tangible, measurable, transparent and self-financing," according to Mr John McNerney, managing director of Readymix and chairman of IBEC's economics and taxation committee.
IBEC supports the concept of benchmarking, he said, speaking at the launch of its pre-Budget submission yesterday, but there had to be a realisation that the deal was done when economic conditions were different. If a similar agreement was undertaken in the private sector, the timing or implementation would be renegotiated as the economic conditions changed, he said.
"If the Government was a private company it would be gone bankrupt," he said .
The concept of benchmarking public pay is the best system that is available, according to IBEC's director general, Mr Turlough O'Sullivan. The previous system of pay, based on relativities, was poor, he said, and there had been frequent disputes.
IBEC was not calling for benchmarking to be abandoned. However, the €1.1 billion cost was probably more than the economy could now afford. In a similar situation, the private sector would seek to renegotiate the timing of implementation, he added.
The process of verifying that productivity improvements would be delivered in return for the payments would be transparently carried out by independent groups, he said. If the improvements were not delivered then the money should not be paid.
