THE DEPARTMENT of Finance has estimated that inflation will average out at about 4.5 per cent for the year, according to trade union sources.
Trade union sources say in that a presentation made as part of the talks yesterday the Department of Finance estimated that the inflation level would fall towards the end of the year, bringing down the average rate. However, the Department of Finance said last night that it was estimating an inflation level of 4.3 per cent.
Trade unions contested the basis on which the Department of Finance produced its inflation estimates. The Irish Congress of Trade Unions has predicted that inflation for the year will be about 4.8 per cent. New inflation figures for August are due out this week.
Forecasts for inflation are a crucial factor in reaching an agreement on pay increases for the duration of any national deal. Unions have claimed that under the most recent agreement workers lost out financially due to higher-than-anticipated inflation levels.
The Department of Finance declined to comment on its economic presentation to the talks.
Separately it is understood that the Commission for Energy Regulation forecast that there could be a double-digit rise in electricity prices at the end of the year.
However union sources said the commission had indicated that a €300 million contribution being made by the ESB towards offsetting the coming increase could cushion the rise by about 8 per cent.
Meanwhile employers have warned that future investment by multinational companies would be lost if they were forced by law to recognise trade unions.
Speaking on his way into the talks yesterday, Ibec director general Turlough O'Sullivan said the current position - whereby companies are not obliged to negotiate with unions - was "the only competitive advantage we have".
"We have a huge constituency of multinational companies and we need to hold on to it. It is the only competitive advantage we have.
"If we give that away we are effectively saying goodbye to new investment in that sector so we will not be agreeing to anything significant," he said.
Mr O'Sullivan said that Ibec had consistently maintained that in the current talks it could not concede anything remotely approaching statutory union recognition.
Earlier, entering Government Buildings, the chairman of the private sector committee of the Irish Congress of Trade Unions said that legislation on collective bargaining rights in non-union companies could be "a deal-breaker" in the current talks.
Jerry Shanahan of the trade union Unite said that this was a "critical issue".
He said that there had been a process in place in relation to collective bargaining but this had been rendered inoperable by the Supreme Court in a court challenge brought by Ryanair.
He said that the issue had been part of previous agreements and a replacement would have to be found.
"We cannot continue without a legislative framework for collective bargaining," he said.
He said that unless the Government tabled proposals on the issue at some stage this week he would not be hopeful of success in the talks.
The pay talks will resume today with a presentation by the Department of Enterprise and Employment on employment rights compliance legislation.
The talks are currently dealing with non-pay issues with pay likely to feature towards the end of the week.
The talks are expected to run until the weekend.
Meanwhile, when asked yesterday whether the any new deal would contain specific provisions for the low paid as sought by unions and opposed by employers, Tánaiste Mary Coughlan said: "What we have said on a number of occasions is that we would like some meeting of minds between both sides on this issue.
"I have always been of the view that the role of the social partners has been huge in our economic success and I would like to see them within our economic recovery
"The Taoiseach has indicated he is there to support, but there is a reality there, there's a financial reality there and we have to deal with that as well.
"But I think what we'd like to see is that between now and the end of the week, that we would have a coming together, we did a lot of work up to the bank holiday weekend and I hope we can build on that," she said.