PUBLIC SERVANTS face a pay cut of between 5 and 6 per cent in next Wednesday’s budget following the collapse of negotiations on the issue between the Government and unions, Taoiseach Brian Cowen indicated last night.
Mr Cowen said the Government would press ahead with pay cuts of €1.3 billion across the public service after it rejected a trade union proposal for savings to be made through staff taking unpaid leave. He was speaking at a press conference at Government Buildings, flanked by Minister for Finance Brian Lenihan and Tánaiste Mary Coughlan.
Mr Cowen was asked later, on RTÉ's Six One News, if public servants could now expect pay cuts of about 5 to 6 per cent. "It's a budgetary matter that now will have to be put into the figures by Brian Lenihan . . . We would have to see a reduction of that kind of area coming forward," he replied.
The decision to reject the unpaid leave proposal came after strong opposition at Cabinet to acceptance of the plan from Mr Lenihan and the two Green Party Ministers, John Gormley and Eamon Ryan. A number of Fianna Fáil backbenchers also raised objections.
The decision was made after the Taoiseach spoke to Mr Lenihan and Mr Gormley following earlier consultations with Cabinet colleagues.
Public sector union leaders had been working out the details of the proposal with Government officials up to yesterday. The Irish Congress of Trade Unions (Ictu) reacted to the Government’s decision to terminate discussions on the proposal “with astonishment and deep regret”.
Mr Cowen said the union proposal did not provide an acceptable alternative to pay cuts. It had been rejected because there was no certainty about the basis on which necessary savings would be made in 2011 and afterwards.
“We now have to proceed to implement our plan to reduce the public service pay and pensions bill by €1.3 billion next year compared with 2009,” he said. He gave a strong hint later that the reduction in the bill applied to pay and would not apply to public service pensions.
Labour Party leader Eamon Gilmore said last night the opportunity to secure long-term reforms of the public service had been lost.
He said the Government had been in a position where it had the support of the two main Opposition parties to achieve €1.3 billion in savings from the public service pay bill, and union members had been willing to play their part and make their fair contribution.
“The Government has blown them [the unions] out of the negotiating room, and to be honest I think it’ll be very difficult to get them back in there again. They have gone for the short-term fix. I believe it is stupid, I believe it is short-sighted, and I believe it is another example of an incompetent Government,” said Mr Gilmore.
Fine Gael’s deputy finance spokesman Kieran O’Donnell said the Government had handled the talks in a “grossly incompetent” manner. “Five days out from probably the most important budget in the history of this State and we have the Taoiseach and this Government taking this country to the financial abyss,” he said.
Under the unpaid leave proposal put forward by unions, public sector workers would have agreed to take 12 days’ unpaid leave next year and would then later come up with a separate proposal to cover 2011.
According to estimates, the unpaid leave deal would have entailed public service staff earning €50,000 having 4.6 per cent of their income deducted next year. For workers earning more than this amount the cut would have been equivalent to up to 7 per cent of income.
Ictu general secretary David Begg said the Government had missed the best opportunity it had to conclude a deal. He said public sector workers would not accept change being forced upon them when they were being told to take pay cuts.
“I think it is a most profound decision, and I think we will regret that for a long time to come. I think there was a great opportunity to make huge change,” he said.
“Clearly we have been played off the pitch now by the Government; we have no possibility of achieving that kind of social solidarity in the budget so it looks as though we will find ourselves in a position of pretty serious opposition to the Government in relation to this budget.”
Union leaders had earlier confirmed that they had reached a draft transformation agreement with Government officials for the health services following marathon talks overnight.
