Government sources: Public pay demands ‘must be realistic’

Public sector unions demanding €1.4bn in pay restoration “must be realistic” or risk jeopardising the public finances, Government sources have warned.

Public Expenditure and Reform Minister Paschal Donohoe has told ministers they face hard spending choices because of the cost of special pay deals granted to public servants this year.

Speaking to the Irish Examiner, senior Government sources were keen to downplay the chances of such demands being met, insisting the work of the Public Service Pay Commission, due to report next month, will determine what is doable.

“We have a lot of pressures on the purses this year and pay obviously is a key one. Demands have to be reasonable and realistic. But the Government will not be held hostage,” said one senior source last night.

A spokesman for Mr Donohoe told the Irish Examiner: “The issue of public service pay is currently under consideration by the Public Service Pay Commission. 

In line with their mandate, the Public Service Pay Commission will produce a report within this quarter. 

"This report will form the basis for public service pay negotiations. Any pay settlement emitting from these negotiations must be affordable and sustainable.”

Addressing the Public Service Executive Union conference in Galway yesterday, its president, Maria Ryan, said that in forthcoming talks on a successor to the Lansdowne Road agreement, public service unions would seek a deal to “break the back” of the cuts imposed under financial emergency legislation.

The union said it is going to seek restoration of what has been taken from public servants since 2009.

General secretary Tom Geraghty said about €1.4bn is outstanding, equating to an average of a 10% reduction in affected workers’ income.

“The emergency is over and the justification for pay cuts imposed upon public servants is now gone,” he said.

While not expecting the return of the monies in one go, he said it is time for all parties to negotiate a fair outcome. “Public servants are reasonable, we do not expect it all in one fell swoop.”

Mr Geraghty said the union will always be cognisant of available funds but that it wants to see an end to Fempi (Financial Emergency Measures in the Public Interest) legislation, which permitted the previous two governments to cut public service pay.

Mr Geraghty said the governments ran out of money because of decisions taken on fiscal policy that saw the tax base narrow and become dependent on property transaction taxes.

The recession was not, he said, the fault of public servants but the fault of public policy — and public servants paid a huge price nonetheless.

Mr Geraghty said it was not in the interests of public servants to make an unsustainable deal and the union will be responsible in any negotiations.

Mr Donohoe has delivered a stark warning that the cost of meeting the public sector pay demands will be be “very difficult”.

“The commission will have regard to the state of the national finances,” he said.

“I expect the commission to report by May or even before then. They are going to be very difficult discussions and negotiations.”

The amount being sought by the Public Service Executive Union is double what is being given in pay rises under the Lansdowne Road agreement.

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