Siptu vows to pursue pay increases

Siptu has vowed to press ahead with claims for pay increases in profitable organisations, in spite of reports the Government is to press for tax cuts in exchange for a pay freeze.

Over the weekend, Government sources were quoted as saying senior ministers, including Finance Minister Michael Noonan, were wary of any process which could have an impact on competitiveness. The Sunday Times report said, however, that Taoiseach Enda Kenny “sees merit in easing the demand for pay increases in exchange for concessions on tax”.

Today, in a front-page editorial for Liberty, Siptu’s newspaper, the union’s president, Jack O’Connor, says neither his union nor, as far he knows, any other union are involved in any talks with the Government on such a concept.

“We are pressing ahead with our strategy to win pay increases in profitable employments across the economy in order to begin the work of recovering ground lost over the crisis years,” writes Mr O’Connor.

The Siptu leader said the union has concluded 188 agreements across the manufacturing sector providing for at least an annualised 2%. He also questioned the feasibility of tax cuts, given the debt servicing demands on the State which he put at €8.1bn this year, “and the savage erosion of the social infrastructure, due to the spending cuts which have been inflicted over the last six years”.

“We certainly do not buy into the concept of further cutting public services, upon which the great majority of citizens depend, in order to facilitate tax cuts,” he added. “Tax cuts are often deployed in such a way as to disproportionately benefit the better off. However, tax reductions for people on lower and middle incomes, facilitated by an increased contribution from the wealthy and by economic growth, would actually be quite positive. This is the only approach to tax alleviation that we could consider.”

Mr O’Connor said senior Fine Gael figures had argued that the marginal rate of 41% became applicable too low down the income spectrum, at €32,800 for a single person and €41,800 for a married couple.

“There is merit in this argument,” he said. “However, it does not reflect the full picture. Based on 2011 figures, only 13.27% of income tax units [individuals plus couples], paid at the marginal rate of 41%. A further 40.23% paid at the standard rate while another 45% were exempt altogether. Accordingly, if the resources for relief are applied only with the objective of increasing the level at which the marginal rate becomes effective, the only beneficiaries would be the top 3.27% of taxpayers.”

Mr O’Connor concluded by saying that, in circumstances where the Government honoured its commitment to legislate to give effect to collective bargaining, “we would not rule out the possibility of exploratory discussions, but only on the basis that any outcome would benefit the great majority of our members and citizens generally”.