Latest public pay hikes ‘pose a challenge’

The latest public pay increases have not been budgeted for and will pose a “significant challenge”, politicians have been told.

Department of Finance secretary general Derek Moran said there are concerns about where the extra cash to fund a promised pay increase will come from.

Public Expenditure and Reform Minister Paschal Donohoe announced this week that his department is to bring forward a €1,000 pay rise to workers who come under the Lansdowne Road deal and earn up to €65,000.

The pay rise had been due to come into force from September, but is being brought forward to April in a bid to stave off industrial unrest.

Mr Donohoe has claimed the €120m needed to fund the wage hikes will come from savings and efficiencies. Mr Moran said the pay rises had not been budgeted for and any changes to the year’s budget would pose a significant challenge. “We haven’t budgeted for this,” he told the Oireachtas finance committee.

Mr Moran outlined how, by the end of each year, there is a tranche of money that is usually handed back from departments. But this is now being “eaten up fairly quickly”, he said.

Ireland is still limited in what it can spend until 2018, under EU debt rules, he said. “We need to get out of that”, and there is “only so much room for manoeuvre”.

Mr Moran said the extra money for the public pay hike could be absorbed, but that the situation may change as the year goes by, the committee was told.

The Government still faces the possibility of industrial action from nurses as well as Asti members.

The Irish Nurses and Midwives Organisation is due to receive proposals from the HSE today around its dispute over staff shortages, recruitment, and retention. Asti is due to begin balloting from Monday.

Separately, Transport Minister Shane Ross came under fire in the Dáil yesterday for his handling of the mounting Bus Éireann crisis.

Fianna Fáil’s Dara Calleary and Robert Troy rounded on Mr Ross and questioned whether he had read a report into the future of the company.

Mr Ross claimed the report which Fianna Fáil had been citing is seven weeks old and a draft report. He said he had met with the chair of Bus Éireann who briefed him on the most up-to-date version of the report before Cabinet on Tuesday.

“The report is not a plan and it was not intended to be a plan. The company is engaging in preparing an actual plan and it will complete that in the coming weeks,” said Mr Ross.

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