The Government will continue to abide by the Lansdowne Road agreement despite the outcome of Britain’s Brexit referendum, according to public expenditure and reform minister Paschal Donohue. Asked on RTÉ radio whether he could now honour public pay promises, minister Donohoe said: “Yes I can.”

Pressed on the Lansdowne Road deal, which has begun the process of public service pay recovery, the minister said: “It’s affordable because, over a three-year period, it put in place a paced plan of moderate wage restoration that is costed into our financial plans.”

He said the ‘fiscal space’ – the amount of money available to spend after existing government commitments are met – “exists after we have honoured Lansdowne Road.”

But Donohoe warned that the public finances would be more volatile as Brexit becomes a practical reality after 2018. “In the aftermath of that you can expect to see significant change. We do expect the very changed circumstances we’re in to have an effect on the resources we have,” he said.

In a restatement of his existing position, the minister also implied that he saw no prospect of an acceleration in public service pay restoration, again saying that “Lansdowne Road is the only game in town.”

A week before the UK referendum, ICTU’s Public Services Committee wrote to Donohoe demanding the repeal of the Financial Emergency Measures in the Public Interest (FEMPI) act. This is the measure that imposed the pension levy in 2009, and was amended to add pay cuts across the public service the following year.

IMPACT and other unions have recently sought an acceleration in pay restoration because economic growth, and related improvements in the public finances, were significantly stronger than anyone expected when the Lansdowne deal was done. However, IMPACT had always cautioned that an unexpected decision in favour of Brexit would impact on the economy and public finances.

Meanwhile, Minister Donohoe has told an Oireachtas committee that consultations with unions on the Government’s proposed public service pay commission will start within weeks. In a statement that will be welcomed by unions, he said the Government would not necessarily be bound by the findings of such a commission.

IMPACT has said that, while it supports the establishment of a pay commission, public service earnings should ultimately be determined through direct negotiations between unions and government, rather than through commissions or legislation like FEMPI.

The union has published a ‘frequently asked questions’ document on its website, to give members a quick and easy guide to how the process will work.

The scheme, which currently applies to clerical and administrative grades III to VI and related grades, offers staff the prospect of an upgrading if their job roles and responsibilities are found to have increased sufficiently.

IMPACT says the scheme is capable of being applied to more senior administrative and management grades, as well as professional and technical staff. The union will, therefore, be seeking to negotiate the extension of the scheme.

The eight-year suspension of the scheme has led to a significant backlog of existing and potential applications.

Management has agreed to give priority to applications that were in the system at the time the scheme closed, applications which were referred to job evaluation by a third party process (eg the Labour Court), and applications which were referred to job evaluation through the process of regularising long-term acting positions. IMPACT is also seeking to include clerical officers as a priority category.

The CRC board and management unilaterally stopped making payments into the fund last month. Management subsequently issued notice of termination of the contributory pension scheme, which covers almost 150 current and former staff who have over 1,000 years of service between them.

IMPACT says it wants to make its own actuarial assessment of the fund and test the legal validity of the scheme closure. But management has refused it access to the books.

The agency claims the fund is carrying a €2.5 million deficit – less than 7% of its liabilities. But IMPACT believes the scheme is not in deficit to this extent.

IMPACT official Ian McDonnell says the union is willing to negotiate measures to close any deficit that exists. “However, we are not going to accept that management can simply cancel the hard-saved pension provision that its staff have built up without bothering to look for ways of salvaging the scheme. Management’s disproportionate handling of a manageable deficit, and its thoroughly insensitive treatment of staff, are totally inept,” he said.

The union says similar or worse deficits in other schemes have been resolved though engagement with staff representatives. Mr McDonnell said IMPACT was open to discuss measures to correct any deficit and secure a defined benefit pension scheme that protects the investment staff have made in their future.

IMPACT official Barry Cunningham said: “The increase of 860 in the number of SNAs in the 2016-2017 school year is very welcome, but the demands on the service are continuing to outpace the resources available. We are also pleased that the allocations have been published earlier this year, which will reduce the uncertainty that staff, schools and parents have experienced in recent years.”

IMPACT highlighted this and other issues in a recent submission to the minister, which also called for immediate action on the inadequate recruitment of special educational needs organisers, who are responsible for SNA allocations.

The union also demanded a stronger emphasis on the development of the SNA role, including access to continuous professional development. To this end, it called for the rapid implementation of the recommendations of the Joint Oireachtas Committee on Education and Social Protection’s report on the role of the special needs assistant.

See the 2016-2017 allocations here.

The Irish Congress of Trade Unions has responded to an Economic and Social Research Institute report, which said increasing the minimum wage would not help tackle poverty. Congress official Liam Berney reacted to the report, saying the debate on low pay should not be driven by “flawed assumptions and simplistic conjecture, given that low pay is such a serious problem in Ireland.”

Berney said the minimum wage was “not designed to address poverty,” which is best tackled through social protection measures. And he said people in Ireland receive a far lower level of social wage – things like free or cheap healthcare – than their counterparts across the European Union.

Meanwhile, The Vincentian Partnership for Social Justice recently published its 2016 update in its minimum essential standard of living series. The report emphasises the crucial role that in-work social protection supports have in keeping households above the poverty line.

While all increases in the national minimum wage are welcome, it said lifting households out of poverty requires a focus on social protection measures first and foremost.

The new programme for Government promises to “reduce poverty levels by increasing the minimum wage to €10.50 per hour over the next five years.” But, according to the ESRI, the link between low pay and household poverty may not exist in the way Government thinks it does.

Most workers who earn the national minimum wage, an ESRI report explains, live in households that earn at or above the national median for household income. Just 8% of low paid workers live in households that are at risk of poverty. Increasing their pay does nothing, or very little, to raise other households out of poverty.

ESRI says poverty is predominantly a product of unemployment, not low-pay. Raising the national minimum wage at the cost of reducing benefits, as has been proposed in the UK, takes money from those who need it most and gives a little extra to those who could go without it.

Minimum wage policies do not have an effect on households where nobody is at work.

IMPACT says the proposals would threaten service provision as library budgets come under increasing pressure. The decision to ballot followed a meeting of branch and library representatives last month.

The ballots, which are being conducted by local IMPACT branches, close at noon this Friday (1^st July), with a national result due to be declared the following Monday. The local authorities affected are Carlow, Cavan, Cork City, Cork County, Kilkenny, Laois, Leitrim, Longford, Monaghan, Offaly, Roscommon, Sligo and Westmeath.

IMPACT says the proposals, drawn up by a Dublin-based planning group, took little account of local needs and failed to include a cost-benefit analysis. The union says neither staff nor local elected representatives have been properly consulted on the initiative, which has no statutory basis and could herald the end of local decision-making on library services.

There are also concerns over the impact of the proposals on staffing and career structures, and the possible relocation of staff across county boundaries.

IMPACT has accepted HSE proposals for transitional arrangements for the appointment of general managers in community healthcare organisations (CHOs). The CHOs are the new bodies responsible for delivering primary and community health care services.

IMPACT made its agreement conditional on the HSE’s acceptance that the proposal was temporary and subject to further discussions on staffing structures below ‘heads of service’ level. These talks will take place in a newly-established consultative forum.

The agreement means that temporary general manager posts can now be filled on a case-by-case basis.

The WRC discussions are continuing this week.

The trade union-funded Nevin Institute has questioned the public consensus on taxation in two myth-busting blog posts. Its director Tom Healy says the problem with budget day is that “the questions are predetermined,” with the Government deciding how to use so-called ‘fiscal space’ as though it were picking from a menu of options.

The entire focus is on tax cuts versus spending increases, and only ever in relation to the marginal 1% surplus available. As Healy puts it: “Heaven forbid anyone should mention tax increases or seek to reframe the entire discussion”

Every year, on budget day, we miss an opportunity to ask the really pertinent questions. “How well do we spend what we spend and what level of overall spending?” Or what is needed to provide the level of public services we want? The whole budgetary process is built on a false foundation of faux ‘common-sense’ thinking that rules out radical, root-and-branch change as a matter of course.

It is with this in mind that Healy systematically attacks some of the ‘common-sense’ beliefs widely held on tax:

Myth 1: We all pay too much tax. The reality: “For single persons, on the average, the Republic of Ireland had the second lowest rate of taxation on income among EU member states for which the OECD provided information”.

Myth 2: Ireland is not competitive when it comes to income tax, especially on average and above average incomes. The reality: “The average effective tax rate moves up sharply from just over 20% for a single person in the Republic of Ireland earning €34,178 per annum to just over 36% at an income of €68,356.

“At 36%, the Republic of Ireland is about mid-ways on the OECD comparison. Many successful and high-productivity countries such as Germany, Belgium, the Netherlands, Finland and Sweden have higher rates of taxation on income”.

Myth 3: The way to win the hearts of lower paid workers is to give them tax cuts. The reality: “At 3.7% of gross income, relatively low paid workers in the Republic of Ireland pay very little tax on income”. In other words, there is little room for further cuts.”

Myth 4: Ireland has the most progressive tax system in the world. The reality: “No account of taken of indirect taxes when making this claim.”

Myth 5: The recession crucified us all with high taxes. Now is the time for payback so we can get back to where we were. The reality: “The great recession of 2008-2010, and the accompanying fiscal crisis in Ireland, did lead to various tax-increasing measures but these were greatly outweighed by spending cuts. However, the tax raising measures neutralised some of the damage done through untimely and unnecessary personal income tax cuts in the period 1998-2007.”

Myth 6: Everyone else is cutting taxes, so should we. The reality: “Average tax rates have been remarkably stable in most countries, except the Republic of Ireland where rates fell during the years of the boom after 2001 and increased during the fiscal crisis following 2008. Average tax rates remain below those in comparator English-speaking countries.”

Myth 7: High tax rates will drive investors and highly skilled workers away. The reality: “The main problem with this line of argument is that it tends to focus on cash income after tax deductions. When regard is had to the social wage, as well as the cost of living defined broadly to include the cost of renting or buying a home, then the picture is more complex.”

Healy concludes: “The Republic of Ireland is a low-tax country no matter what way you measure it.” It is important to remember, however, that “this is undoubtedly linked to the fact that the Republic of Ireland has a relatively poor social wage.”

Read Tom Healy’s blog posts here and here.