New wage deal ‘hinges on budget’

A BAD budget could fatally damage the prospects of reaching a new national wage deal, Irish Congress of Trade Unions president, Joe O’Toole, said last night.

"The forthcoming budget on December 4 is an opportunity to take a positive step towards a national deal but a bad budget could scupper it," Senator O'Toole said.

He was commenting on a meeting between trade union leaders, Taoiseach Bertie Ahern and Finance Minister Charlie McCreevy earlier yesterday. He said despite pessimism, a new partnership deal was still all to play for and if the budget on December 4 addressed workers' concerns, there could be a deal.

The ICTU delegation spent 90 minutes with Mr Ahern discussing last week's Book of Estimates and its impact on the budget in two weeks' time. ICTU general secretary David Begg said the delegation set out their priorities for a new partnership deal and for the budget.

During the discussions, the Taoiseach stressed his commitment to the ongoing partnership process but also highlighted the serious state of the country's finances. Mr Begg said the Government had indicated its willingness to work with the unions to see whether compromises could be reached on key issues.

"We'll have to wait until the budget now to see if we get any results," the ICTU general secretary said.

Mr Begg said he asked the Government to reconsider the first-time home buyers' grant and its possible temporary re-instatement until other supports could be put in place to help young home buyers.

But he stressed the first-time grant was not the only housing issue in a sector which was now seen as crucial to young working people and their parents.

The ICTU leader said there were real concerns about property speculators able to control the land supply, especially in the Dublin area. "They acquire options on development land and drip-feed it on to the market in a way that suits them to keep the price of houses up," Mr Begg said.

The current wage agreement, which also covers other social issues, is entering its final months. The so-called Programme for Prosperity and Fairness was the latest in a series of deals stretching back to 1987, credited by many economists with helping the country's economic re-generation.

During the summer the employers' organisation IBEC began to seriously question the merits of continuing the process. Their hard-line stance, and the lack of funds for government incentives such as tax breaks and welfare increases, have raised serious doubts about prospects of success.