Government and social partners to begin talks

THIS afternoon the Government and social partners should finally begin intense negotiations on how to cut exchequer spending by €2 billion.

Unions and IBEC were last night presented with a framework document listing areas under which the Government wants to make savings. Those areas are thought to include taxation, public service savings, banking and the National Development Plan.

Unions last night indicated they had been successful in securing guarantees on a social solidarity pact which would see all sectors contributing to the savings in accordance with their ability to do so.

This morning the Irish Congress of Trade Unions (ICTU) will brief its executive on the contents of the framework document. It is widely anticipated members will rubberstamp continued participation and it will return to Government Buildings to enter the substantive negotiations this afternoon.

IBEC last night said the document was flexible enough that “given sufficient goodwill and common sense, participants could come out the other side with an agreement”.

However, despite finally clearing the first hurdle, potentially divisive issues still remain for both sides. IBEC has said a broadening of the tax base, as sought by ICTU is “possibly acceptable”.

However, its director general Turlough O’Sullivan said there must be no increase in the burden on personal tax payers or corporate tax payers, the areas where unions need increases.

Furthermore the sides will almost certainly clash on how savings are achieved on the backs of public sector workers. IBEC has sought job losses and pay cuts across the sector something which unions have stringently opposed.

However, some compromise may be reached in this area through cuts to overtime and increases in pension levies of up to 5%.

Also, while IBEC has said it agrees the pain must be shared across all sectors of society, it still insists enterprise must remain able to compete and must not be unduly burdened given its necessity to stem rising unemployment.

Mr Turlough said his organisation was leading by example by taking the hard decisions. He said he had taken a pay cut of 6%, IBEC staff were currently on a pay freeze and wholesale pay cuts might have to be looked at.