TAOISEACH Brian Cowen is expected to discuss the Government's new plan to revitalise the economy and restore the public finances when he meets trade unions and employers tomorrow.
Informed sources said the Taoiseach is also expected to provide a briefing on the deteriorating state of the economy.
However, the issue of the new pay deal for more than 300,000 staff in the public service is not expected to be on the agenda. Union sources said they expected the Government to seek an agreement on an overall approach to tackling economic difficulties.
The Irish Times revealed last month that the Government's new plan would contain a range of tax incentives and grants designed to make Ireland the most attractive place for companies engaged in research and innovation.
The plan will offer additional incentives to the 12.5 per cent corporate tax rate to lure new companies here, encourage existing multinationals to locate their research divisions in the State and encourage the development of small Irish companies in the area.
Government sources say Mr Cowen wants to reorient Government policy so that Ireland will be well-placed to get on the path to recovery when the downturn ends.
The core of the plan will involve an effort to make Ireland an international capital for research and innovation and the location where such advances are brought to commercial development. Greater incentives will be provided to the multinational presence to carry out research and development.
An effort will be made to create an indigenous research and development sector through the provision of supports for start-ups. The Sunday Tribune reported yesterday that the Government would also set tough new spending targets for the next few years to reflect the collapse in tax receipts and limit pension increases to inflation and not the national pay deal.
It also suggested the Government may refocus the National Development Plan to concentrate on labour-intensive schemes such as school-building, housing insulation and energy infrastructure.
Senior trade union sources expect Mr Cowen may use the meeting to stress his desire to use the social partnership process to agree on how best to achieve the plan's objectives. Government and union sources have maintained that the issue of increases for public sector workers next year is not on the agenda for the talks.
More than 300,000 public sector workers are scheduled to receive a 3.5 per cent increase at the end of the current 11-month pay pause next September.
There has been confusion as to the Government's stance on the payment, with mixed messages emerging from Ministers.
Tánaiste Mary Coughlan told the Dáil that the pay deal was not up for negotiation. However, asked about it on RTÉ's Morning Ireland earlier this month, Minister for Finance Brian Lenihan said: "The Government will give leadership on this early in the new year. We can't wait forever on this. Nothing can be ruled out."
Mr Cowen said the Government would not try to change the terms of the pay deal for public servants without discussions under the social partnership process.
In a parliamentary answer last week, Mr Lenihan said if the pay pause were to be extended by another month, there would be an additional saving of about €55 million in 2009. The public sector is expected to be examined by the committee on public expenditure. Sources said the "job for life" in the public service for new entrants could be part of its deliberations.
