Today's meeting of the National Economic and Social Council has been postponed for a fortnight because of serious disagreements between the social partners on elements of the final draft of its report on a new national pay agreement.
According to informed sources, the two main areas of difficulty relate to the proposed levels of social welfare and a mechanism for determining wage bargaining. On welfare, it is understood that employer representatives and the Departments of Finance and Social Welfare have serious reservations about conceding increases of up to 16.4 per cent, as proposed in the existing text.
Bodies in the voluntary and community sector, such as the Conference of Religious of Ireland, are arguing that welfare rates should be brought up to 50 per cent of the average household income. The Government Departments would prefer to keep to the lower guidelines in the recommendations of the 1986 Commission on Social Welfare.
On pay, employers are understood to be arguing that any increases conceded to the unions must be paid for with increased productivity. Unions, on the other hand, are arguing that there should be national pay increases topped up with the extra rewards that result from increased productivity.
Yesterday, IBEC's director, Mr Brian Geoghegan, who is a member of the NESC, said the present text was "a working document and not by any means an agreed document". He said IBEC "was arguing for competitive pay increases in line with what is required to maintain the competitiveness of the economy".
However, another NESC member, INOU general secretary Mr Mike Allen, said the social welfare propositions of the report were "absolutely crucial to nonworking people". He added that "everyone on NESC is a participant in the national anti-poverty strategy which recognises the importance of tackling the problem of relative poverty".
Essentially, this meant that NESC members who objected to the report's proposals on welfare were saying they accepted the need to do something in principle, but were not prepared to pay for it, Mr Allen said. SIPTU vice-president Mr Des Geraghty said the report provided a basis for working towards a more balanced society, based on sustainable improvements. It allowed for the management of the economy "so that pay rises go hand-in-hand with a decent social wage and we get away from the boom-bust pattern of the past".
He did not see the two-week referral to allow experts to try to formulate an acceptable text in the areas of social welfare and pay as a major problem. He said it would not interfere with the timetable for talks on a successor to Partnership 2000.
There is no doubt that the leaking of the NESC text makes it more difficult for employers and Government departments to argue against social welfare increases and pay rises when the report itself indicates that there is considerable scope for concessions without endangering Ireland's overall economic performance. It now remains to be seen if a final text can be agreed by the time of the next meeting on October 22nd.
Nuala Haughey adds:
The Minister for Social, Community and Family Affairs has said the draft report's recommendations for higher living standards for workers and increases of up to 16 per cent in social welfare payments would feed into the new partnership agreement negotiations.
Commenting on the draft report's social welfare proposals, Mr Ahern said any minister would look for as much of an increase as he could get.
The Government had, in the last two Budgets, delivered social welfare increases ahead of average incomes, as well as a 14 per cent increase in pensions.
"We are looking at new targets and obviously you have to balance between increasing social welfare as much as you can but at the same time ensuring that there's no disincentives to work in the system between social welfare and paid employment," Mr Ahern told RTE radio's News at One.
Asked about the report's proposal that a new benchmark for social welfare should be 50 per cent of the average income threshold, Mr Ahern said this was currently being discussed in his Department and would also be on the table when discussions with the social partners took place.