Wage hikes and tax relief on the cards in new pay deal

The Government is examining a joint wage rise and tax relief package for workers as part of a new social partnership deal with employers and trade unions.

Finance Minister Michael Noonan said a new partnership arrangement would secure the recovery and give some benefits back to people.

The Government wants to open discussions on what arrangements could be put in place to keep industrial peace and prevent pay claims after the Haddington Road deal expires next year.

But dialogue on any type of tripartite pay deal has yet to begin.

Any new deal would not be a re-establishment of social partnership which “at the end was a failure”, Mr Noonan said yesterday.

“We’re taking the first steps and we think the principal groups are probably interested in dialogue. Whether we can move beyond dialogue into some kind of quasi negotiation where pay and tax relief could be in the one package and there could be a quid pro quo between one and the other, that there would be a new partnership arrangement that would secure the recovery and at the same time give some benefits back to the people.”

Coalition sources admit a new pay deal, beyond satisfying workers demands, would also produce a political dividend for the Government parties ahead of the next general election.

The Government has already signalled it is prepared to reduce income tax and the USC in future budgets and would likely tie the measures into any new wage deal.


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