Talks on how much of the Government’s €750m public expenditure pledge will be given over to pay restoration for its staff will begin this afternoon, with the pension levy likely to feature high on the agenda over the coming days.
Today’s engagement is expected to see the two sides lay out their initial positions, with the Government then expected to give unions a more detailed outline of the financial parameters on Thursday afternoon before talks begin in earnest next Tuesday.
Sources indicate that a winding-back of the pension levy, which averages out at about 7%, is likely to be only one part of any proposed agreement which may emerge within the next few weeks. That is because the way the levy was applied — with different percentages applying to different wage earners — means an “equitable” solution may not be possible if the entire restoration is based around it.
In recent days, Tom Geraghty, general secretary of the Public Service Executive Union, moved to temper members’ expectations about what is likely to emerge from these discussions — as well as address criticisms of the restoration process from those who believe public servants are paid too much.
“The spring statement by the Government that there is a maximum of €750m available for 2016 for all increases in public spending, including everything from the purchase of ambulances, more gardaí etc and, of course, public service pay restoration, is of far more concerning significance than the idle musings of economic commentators,” said Mr Geraghty. “It will be difficult to put together a half decent restoration ‘package’, with those sort of financial constraints for 2016.”
Estimates that each of the country’s 290,000 public service workers could be better off to the tune of €800 following discussions would mean €300m would need to be set aside from this process. However, union sources say such a figure is only anecdotal at this stage.
The expectation is that, while unions would like a short engagement, the talks could take all of this month and possibly extend into June. One issue is that while primary school teachers would just about have time to ballot on any proposal before finishing up for the summer, second-level teachers may not be in a position to be balloted until September.
Attending talks in Europe, Finance Minister Michael Noonan told reporters Public Expenditure Minister Brendan Howlin has been allowed “a lot of flexibility” to negotiate.
Mr Noonan said there had been suggestions in the newspapers there “may be a flat-rate approach”. “But it’s incorrect to say that this is the first step in unwinding impositions made on people because we had quite a significant levy on private sector pensions and in the last budget I took steps to remove that completely and there will be no levy on private sector pensions from next year,” said Mr Noonan. “So if part of the approach is the levy on public service pensions, then there is the equivalence approach with the private sector having their impositions removed first.”
Employers group Ibec said any wage increases needed to be in line with some productivity growth.
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