Government cannot justify pay restoration delay for high earners, Varadkar says

EMBARGOED TO 0001 MONDAY MAY 30 File photo dated 20/03/22 of Tanaiste Leo Varadkar who has said people who argued years before that new hotels should not be built in Dublin were “wrong”, and that more hotels are needed around the country. Issue date: Monday May 30, 2022.

The Government cannot justify delaying the restoration of pre-austerity wage rates for thousands of Ireland’s highest paid public servants, the Tanaiste has insisted.

Leo Varadkar said he realised the move would prove controversial amid the cost-of-living crisis, but he said legal advice received by ministers was “very clear” that an intervention would be hard to defend in the courts.

Wages across public services were cut following the financial crash of 2008 and the vast majority have been restored since legislation was passed in 2017 to reinstate the original pay rates.

The group earning above 150,000 euro, which includes hospital consultants, judges and top-grade civil servants, is the final cohort to receive the pay rise.

People attend a cost of living protest outside Leinster House (PA)

The restoration is due to take effect at the start of July.

Mr Varadkar said the Government considered delaying the restoration but concluded it could not justify “singling out” one group of public sector workers while wages have already been restored to all others.

“That legislation that was used to cut the pay of public servants was a financial emergency provision,” he told RTE’s Morning Ireland programme.

“There is no longer financial emergency, we’ve record levels of employment, public finances are in good order and we would have to go into court and make the arguments that it was right to fully reverse the pay cuts for a school principal or somebody working in the passport office or a Garda inspector but it was OK to single out doctors, and that wouldn’t be right.”

Away from the issue of pre-crash wage restoration, Mr Varadkar also revealed the Government is poised to make a new offer to public sector unions in a bid to break the impasse over current pay rates.

A Government proposal that would have seen a 2.5% pay increase this year, following by a similar rise the following year, was rejected by the unions during talks involving the Workplace Relations Commission (WRC) last week.

Mr Varadkar said the Government intended to re-engage with the negotiations and table a further offer.

He said the proposals would see lower paid workers offered a bigger increase.

Workers above a certain wage threshold would get a smaller increase but the Tanaiste said the difference would be made up by way of tax reforms.

He said the Government package would also involve measures such as reducing childcare costs.

“The economy is very good condition,” he said.

“More people at work than ever before, more people earning more than ever before, record trade numbers.

“We do have financial firepower that we didn’t have in the past and some of that, that not all of it, some of it can go towards public sector pay.”

Tanaiste Leo Varadkar (Niall Carson/PA)

The Tanaiste again defended the Government’s decision not to introduce any further cost-of-living support measures until October’s budget.

“We’d like to move when we think it will be most effective and it is going to be going into the autumn period when energy bills are going to bite even harder than they’re biting now,” he said.

Mr Varadkar said he could not 100% rule out fresh measures before October though he made clear he did not anticipate that.

“We’ve no plans for further intervention until budget day and the budget will happen in the autumn,” he said.

“But you know, as is always the case, I’m reluctant to definitively rule anything out 100%, because this is a rapidly changing situation.

“I think if we were to see, you know, further dramatic escalation to fuel prices, we’d have to give consideration to an intervention then.”