Public pay deal ‘will bring rates increase’

THE Chambers of Commerce of Ireland (CCI) says €220m benchmarking payments to local authority employees across the country will be paid for by greater rates and charges for businesses.

It says that because the Government is not funding the pay rises to council workers directly, local authorities will have to find the money themselves and this will mean higher rates.

The CCI says this will inevitably lead to jobs losses as companies will not be able to continue to pay higher charges.

CCI chief executive John Dunne said yesterday that he had no problem with benchmarking, but it was unacceptable for the Government to leave it to local authorities to find the money to pay for the increases.

He warned that businesses might not pay salary increases to their employees under the Sustaining Progress agreement if they had to pay higher charges.

"It is absurd that employees of local authorities have prior claims on the income of employees in firms in their area," he said.

Mr Dunne said businesses were already being forced to pay exorbitant rates by local authorities without any increase in services. A new report by the CCI said that rate increases so far this year have been of the order of 23% and that this year councils will take in €835m from rate charges.

The CCI said that €1 out of every €4 in local authority spending comes from commercial rates.

"Business doesn't mind paying its fair share but if you have €835m being funded by only 8% of property owners, that is not fair," Mr Dunne added.

The CCI called on the Government to reintroduce domestic rate charges for all property, including State buildings.

Property charges for homeowners were scrapped in 1978, while agricultural land was exempt from paying rates in 1984.

The CCI report said that in some local authority areas rate payers, who make up only 8% of all land owners, were contributing €1 out of every €2 spent.

It also wants commercial rates to be capped next year at 3% the projected level of inflation. Mr Dunne added that businesses were not asking for special treatment but believed that rates should be applied equally to all property owners.