Pay increases ‘to cost taxpayers €3bn’

TAXPAYERS will have to cough up €3.26 billion by 2007 just to meet the latest generous pay increases being planned for the country’s civil servants, a top economist has warned.

For the same amount of money, the Government could cut the standard rate of income tax from 20% to 18.5%, or reduce the VAT rate from 21% to 19%.

The recommended average salary rise of 9% for the 260,000 public sector workers at a cost of 1 billion under the benchmarking process is entirely unwarranted, according to Colin Hunt, director of research at Goodbody Stockbrokers.