Union leader warns public service pay talks will fail if ‘living standards deficit’ is not addressed

In an email to members of the Irish Congress of Trade Unions’ public services committee this afternoon, chief negotiator Kevin Callinan says while figures have not been tabled by either side at the talks, the real-term shortfall between “modest” pay increases in the current agreement and living costs is “substantial and could yet grow”.

He calculates that last year the gap between increases due – if annualised - and inflation was 2.15pc.

Mr Callinan says if inflation averages 7pc this year, “and it could be higher”, the gap would be 6.75pc.

He says Public Expenditure and Reform Minister Michael McGrath wants a deal done before the October Budget, and the committee officers agreed, at the Government’s request, to discuss extending Building Momentum into 2023.

“We have been equally clear that this cannot be a substitute for addressing the 2021-2022 living standards deficit,” says Mr Callinan, who is chairperson of the Public Services Committee (PSC).

“The current talks will fail if this deficit is not adequately addressed.

“We are working in good faith to avoid such an outcome, which would fundamentally destabilise Building Momentum and make impossible an extension of the agreement into 2023.”

Mr Callinan says the talks that have moved into a more intense phase this week are focused on two things.

The first is addressing the deficit between the pay increases set out in the Building Momentum agreement and the current shortfall in living standards caused by “unexpectedly high and persistent inflation”.

He says this led the public services committee to trigger the Building Momentum review clause in March.

The union leader noted that the minister subsequently said the Government was willing to go beyond the pay terms in the deal.

The second key concern, he says, is extending the Building Momentum agreement into 2023. He says the minister indicated that the Government wants certainty over the public service pay bill at a time of “economic and geopolitical volatility”.

He says the minister has said he would prefer to conclude an agreement in advance of October’s Budget.

“The PSC officers have indicated a willingness to try to achieve this, though we have said that the timetable for negotiations and ballots is challenging,” he says.

He says despite speculation, the talks are not discussing wider cost of living measures or tax and benefit changes.

Cost of living measures are under discussion in a separate process involving Ictu, Ibec and the Government in the Labour-Employer Economic Forum.

He says little concrete progress has been made at these talks but Ictu intends to table proposals to see if there is potential to reach agreement on an improved “social wage”.

“The Ictu position is that improvements to the social wage will require increased short-term and medium-term spending in areas like health, education, childcare, housing and public transport,” he says.

“We do not believe that significant cuts in tax are compatible with this, and Congress is not in any negotiations about tax cuts.”