GOVERNMENT OFFICIALS have maintained there would be technical difficulties in making adjustments to some aspects of the tax system in the current year, union leaders have said.
Speaking after several hours of talks yesterday on a national economic recovery plan, the general secretary of the Irish Congress of Trade Unions (Ictu), David Begg, said the technical difficulties highlighted by Government officials related to the time of the year adjustments could be undertaken.
Unions are seeking a broadening of the tax base, including a new property tax, the introduction of a 48 per cent band, or the raising of the levels of capital taxes to those of income taxes.
They believe that such measures are required as a balance to proposals on cuts in pay for workers.
They claim these measures would show that all sectors of society are contributing to the recovery programme.
Mr Begg said last night that the unions would need to be able to show “some progress immediately” in relation to tax as part of the current talks.
He said that the talks yesterday had also dealt with issues such as the elimination of tax shelters and the raising of the levels of capital taxes.
Mr Begg said officials had pointed out that the rate for capital taxes had been increased from 20 per cent to 22 per cent recently.
However, he said that they had given no guarantees on future changes in taxation.
Mr Begg said that he considered it significant that the terms of the Commission on Taxation had ben changed “to identify appropriate options to raise tax revenue” by the Government.
Unions have said that up to now the commission had a mandate to retain a low-tax environment.
The talks yesterday centred on tax, pensions, mortgages and repossessions of homes, and the unions’ proposal for a State “economic recovery bond” to which the public could subscribe.
Mr Begg said the Government side had given no indication of its proposals for cutting €2 billion in exchequer spending.
He said the issue of possible reductions in the public sector pay bill had not been addressed, and that it had not yet been placed on the schedule.
This means that the issue of pay will not now be dealt with until over the weekend at the earliest.
Talks today are scheduled to deal with the labour market and upskilling.
Mr Begg said that in relation to assisting people with mortgage difficulties, the Government intended to put on a statutory basis an existing voluntary code on arrears and repossessions.
He said that while this was welcome the unions would like to have some mediation built into the process before any case reached the courts.
Mr Begg also said that Government officials had shown some concerns that the introduction of a recovery bond could lead to the displacement of money from the banks.
Meanwhile, the business group Dublin Chambers yesterday said that a survey of members had found that about nine out of 10 companies were freezing or reducing their pay levels.
Dublin Chamber called on the Government to follow suit during the current partnership talks “by addressing the pay differential between the public and private sector”.
Dublin Chambers chief executive Gina Quinn said: “Government must face reality and make the same tough decisions related to pay that are being forced on the private sector.
“Businesses are focusing on their labour costs by freezing or cutting wages in an attempt to remain competitive.
“Hardest hit has been senior executives, with 30 per cent of the companies who responded saying they are cutting top-level salaries by a tenth or more,” she said.
