Paschal Donohoe holds talks with trade unions with ‘big challenges’ ahead

Finance Minister Paschal Donohoe says new talks need to be opened with the trade union movement to address future challenges facing the economy, such as Brexit.

“I do believe there is a need for a new form of engagement between Government and the Irish trade union movement,” he said.

Mr Donohoe met yesterday in Dublin with the Irish Congress of Trade Unions.

He said any new agreement and talks with unions will not cover wage issues or annual spending by the Government.

“I was very clear that I believe that the social partnership model of the past, where social partnership played a role in wage setting and where the primary role of government in relation to budgetary policy was shared, are not areas that I will be returning to.”

The new partnership would build on the economic forum which has been meeting over the last two years.

Mr Donohoe said there are now strengthened institutions, such as the Labour Court, to deal with wage issues and separate negotiations on collective work negotiations.

He said the role of setting budgets should remain solely with the Government.

Key challenges ahead, such as Brexit, need to be prepared for, said Mr Donohoe. “I believe that we should have an engagement regarding a specific number of big challenges and the opportunities that our country will have to deal with such as pensions and Brexit, that we find a new form of engagement between government and trade unions to look at the best response back and I invited them to share with the Government ideas about how we can do it.”

A shared response with employers and employees to deal with new challenges is needed, said Mr Donohoe, adding that new talks and pressures would not affect wage demands.

He said an agreement with trade unions would deliver wage growth of between 1.5% and 2% each year.

He said that agreed growth is in line and slightly behind personal consumption increases and behind notional income growth in the economy.

Wage growth is “affordable and sustainable” and would not contribute to any overheating in the economy.

Nonetheless, Mr Donohoe did concede the housing crisis was fuelling pressure on the economy.

“Instead, I believe the pricing pressures and heating pressures that we are seeing are being generated by difficulties that we are seeing in the supply of homes and in the availability of infrastructure elsewhere.”

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