The controversial Budget proposals to award extra tax relief to two-income families and high income earners is creating major problems in negotiating a successor to Partnership 2000.
Yesterday more than 20 community and voluntary organisations which form the ["]third pillar["] to the talks announced that they were reviewing their attitude towards talks on a new national agreement. They say that the Budget failed to address the needs of the low paid and of welfare recipients.
The Budget has also been criticised by SIPTU's national equality officer Mr Rosheen Callendar as "ill-advised and unfocused". While she welcomed the fact that "a start had been made" in helping married women enter the workforce, she said this could have been done more fairly through increases in the PAYE allowance.
The social partners are due to resume negotiations on Monday and the talks process could face its first major crisis if the Community and Voluntary Pillar decides to withdraw. The unions are also expected to voice strong criticism of the Budget, especially over the failure of the Government to increase PAYE allowances.
Last night, after a meeting of the groups in the third pillar to discuss the Budget, its secretary Mr Mike Allen said that members intended making the Budget the first item on the agenda at Monday's meeting. "We will review our situation when we see what happens there."
He added: "Budget 2000 offers no incentive to low-income earners either in real terms, or in the rewards of moving from welfare to work." For instance, the Government had given away more than £50 million more in tax cuts to high income earners than it had given in child benefit.
Mr Allen also criticised IBEC and the ICTU for saying that the Budget would stabilise the social partnership process. The pillar believed it would have the opposite effect and now "threatens the prospect of securing a new national agreement".
A spokesman for ICTU expressed surprise at Mr Allen's remarks and said that the Government had been put on notice that low pay would have to be addressed in the talks. In a separate development, Ms Rosheen Callender told SIPTU's national women's committee in Galway that the Government's efforts to tackle the low pay and child care problems had been "ill advised and unfocused. It would have been much better to give a substantial increase in the PAYE allowance and perhaps convert it into a straightforward `earned income allowance', thus specifically helping two-earner families". She welcomed "the fact that a start has been made in addressing the burning issue of childcare and the very real disincentives which face married women wishing to combine employment and family responsibilities". Yesterday's developments underline the different priorities of the unions and the third pillar in the talks, as well as the problems which the Budget has created for concluding a successor to Partnership 2000.
While the withdrawal of the third pillar from talks would not prevent the Government from concluding a national pay agreement with the unions and employers, it would represent a serious setback for the social inclusion process.
There is also a possibility that talks will break down before Christmas if no progress is made on pay increases, now rendered all the more vital by the small Budget concessions to the low paid.