Public-sector wage demands could cost €1.6bn
Ictu president Kevin Callinan has issued a warning ahead of the public-sector pay talks. Picture: Domnick Walsh/Eye Focus.
Public-sector wage demands could cost the State at least €1.6bn if agreed to by the Government.
The president of the Irish Congress of Trade Unions (Ictu) Kevin Callinan has warned that public-sector pay talks will fail if the Government does not address the gap between pay and current living costs.
While no figures have yet been tabled by either side in the public service talks, Mr Callinan said that if inflation averages 7% this year — and it could be higher — the 2022 gap between annualised Building Momentum pay increases and annualised inflation would be 6.75%.
Such pay increases would cost in the region of €1.6bn and would put pressure on the private sector to offer similar packages.
Leo Varadkar said he is "optimistic" that the talks could be resolved and an agreement in place ahead of the budget, however.
The Tánaiste also indicated that the Government will introduce a significant budget tax package to help ease the burden on middle-income earners.
"The average person working full time now earns over €40,000 a year, the average person in Ireland is going to get a pay increase this year — the vast majority will — and they will lose more than half that pay increase in income tax, PRSI, and USC, and we don’t think that’s fair," he said.
“We don’t want to see people on average incomes of €40,000 or €50,000 a year losing more than half their pay increase in income tax, PRSI, and USC.
While formal budget talks have yet to get under way, one minister suggested that the ratio between tax measures and spending could be altered this year to make greater provisions for a taxation package.
Another minister said that the Government will have to focus on raising personal tax bands in line with inflation, otherwise workers would be effectively taking a pay cut as the cost of living increases.
Meanwhile, a group of Fine Gael senators have put forward a motion calling for a new income tax rate of 30% for people on middle incomes.
Seanad leader Regina Doherty said: “The people earning €30,000, €40,000 and €50,000 a year are paying a hell of a lot of tax, but they’re not getting to appreciate any of the services we’ve introduced in the last couple of years such as the child subsidy scheme, the affordable housing scheme, even housing assistance payment, rent payments, access to Susi grants, and access to free medical cards.”
Ms Doherty said that such earners are going to be the “next vulnerable group who can't actually afford to continue to live the way they would have lived last year or the year before”.
