The Cabinet's decision yesterday to defer a pay award for top politicians for a year will make no difference to trade union demands for higher pay for workers in next year's pay talks, the Irish Congress of Trades Unions has made clear.
But the move was welcomed by the employers' body, Ibec, which said described it as a "helpful gesture" in advance of the talks.
Following weeks of criticism, Taoiseach Bertie Ahern proposed to the Cabinet yesterday that it should reverse its October decision to accept the Review Body on Higher Remuneration in the Public Sector's September recommendations.
The original pay award, worth up to €38,000 in the case of Mr Ahern and €36,000 to each of his Ministers, was to have been back-dated to mid-September and paid in full by March 2009, Ministers first decided.
Yesterday, however, they decided that the rise would be deferred until September next year, when a 4 per cent increase is to be paid. Half of the rest is to be paid in September 2009 and the rest a year later. There will be no backdated payments.
However, 1,600 other top public officials, including judges, semi-State chief executives, military and Garda officers will all receive their increases backdated to mid-September, Mr Ahern made clear.
Fine Gael leader Enda Kenny said the deferral of the pay rise was "a cynical move by an arrogant and tired Cabinet" and Ministers would have seriously "misjudged the public's opinion on the issue" if they tried "quietly to up their salaries next year".
Explaining the decision in the face of Opposition jeers, the Taoiseach said the Government was "mindful that the November exchequer figures were not as good as hoped".
In addition, the public service pay benchmarking report - which, unlike its predecessor, is expected to offer very little extra to civil servants - was "imminent", he said.
The Cabinet's decision will mean that the Chief Justice, Mr Justice John Murray and top secretaries general, who will each be entitled to €303,000 a year once the report is fully implemented, will earn more than the Taoiseach, whose salary is €271,000.
Irish Congress of Trade Unions general secretary David Begg said yesterday's move was "probably wise from a public perspective but from the point of the trades unions it doesn't change the position very much".
"It will have no implications for the unions' attitude to the upcoming talks," said Mr Begg, copperfastening the view of senior politicians that yesterday's climbdown will be long forgotten by the time social partnership talks open.
In a statement, the Government said the trade unions' position had been misrepresented, pointing out that the unions had been critical of pay trends in the private sector rather than the mechanism for dealing with Cabinet ministers' pay.
"[ Nevertheless], the Government believes that it would be wrong to allow this issue to distract from the matters which should be properly focused upon in those negotiations," the statement said.
The Government also defended the independent review system for senior figures in the public service as "fair and reasonable".
Ibec director general Turlough O'Sullivan described the move as a "meaningful and helpful gesture".
Pleased by the decision, the Minister for Community, Rural and Gaeltacht Affairs, Éamon Ó Cuív last night said it was "the right thing to do" given "that the public's finances were "not as robust - though still strong - as they were when the decision was first made".
Minister for Foreign Affairs Dermot Ahern said the Cabinet had "not been privy" to the November exchequer tax figures when they initially accepted the pay review body's recommendations.
He initially claimed that Ministers had received no pay increases since 2000, and then, during questioning by journalists, said he could not remember having been paid a 7.5 per cent interim increase in 2005.
The one-year pay freeze also applies to the Attorney General, the Ceann Comhairle, the Leas Cheann Comhairle, the Cathaoirleach and Leas Cathaoirleach of the Seanad.