ISME calls for pay cuts despite monthly inflation

Employers' body ISME has today reiterated its call for the Government introduce public sector wage cuts, despite the economy returning to price inflation.

Official inflation figures showed that average prices increased by 0.4% last month, the first increase in 11 months. Average prices were 5.9% lower in August 2009 compared with August 2008, however.

"The economy will never be in a better position to realign its cost base with that of our competitors," said ISME chief executive Mark Fielding.

"This includes the introduction of pay cuts across the economy. The private sector has already led the way by introducing significant pay cuts in all areas. These public sector reductions are required to reduce current expenditure, particularly with the Exchequer figures in a mess and taxation levels at ‘tipping point’.

"As today’s figures confirm, the State continues to negatively influence the SME cost environment through local charges, including waste, commercial rates and water charges. The reality is that while the private sector continues to pay for the profligacy of the public sector, jobs are being lost and small & medium firms are going to the wall."

"It is now imperative that the Government address the bloated public sector once and for all and start implementing the recommendations of the An Bord Snip report on public sector pay and numbers.

"This is the area of the economy where genuine reform and savings can be made, which when managed properly can result in a more efficient service."