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SIPTU president wants promissory note savings used to avoid public pay cuts

Jack O’Connor says using the €1 billion annual savings, and a higher tax rate on high earners, can avoid wide public strikes.

Image: Mark Stedman/Photocall Ireland

THE PRESIDENT of the country’s largest trade union has called for some of the savings from the promissory note deal to set aside for public pay and remove the need for further pay cuts in the public sector.

SIPTU president Jack O’Connor said the government’s goal of cutting €1 billion from the public pay bill by 2015 could be achieved by setting aside the €1 billion annual savings under the promissory note transaction, combined with taxes on high earners.

O’Connor said the government had given itself “a very narrow space in terms of its capacity to move” by trying to find €300 million in savings this year – but the savings from the promissory note, which kick in next year, offered scope for extra discretion in 2014 onwards.

When combined with a new tax rate of 48 per cent on wages over €100,000 – which he said would bring in around €365 million in tax revenue – O’Connor told RTÉ’s Morning Ireland it was possible to avoid industrial disharmony with public workers.

The SIPTU president said it was still his belief, however, that the government would now proceed with plans to unilaterally cut pay in the absence of any agreement with its 292,00 workers, after the collapse of the Croke Park 2 pay deal.

“Workers in the public service could yet find themselves in a situation where they still lose both ways,” he said.

A government that is in the situation our government is in wouldn’t have decided to embark upon this simply because it would be a good idea, or they would change their arm, or to try it on.

I don’t think a government would have given up an agreement, [of] the likes of the Croke Park Agreement – which governments in Western Europe would give their right teeth for – just for the sheer pleasure of having a row with the public service.

Although the European Commission has already staked its claim to the savings – asking for the savings to be put towards closing the Budget deficit – O’Connor said the weight of public opinion was moving away from the pursuit of austerity.

He said the comments of the former head of the IMF mission to Ireland, Ashoka Mody, and event more recent comments from Jose Manuel Barroso indicated that the pursuit of measures to close budget deficits were having a social toll.

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O’Connor also said that industry groups had overstated the effects that a tax increase would have on overseas investment in Ireland.

“I don’t believe for a moment that we’ll have an exodus of international investment from Ireland simply because we impose a reasonable level of tax on very wealthy people,” he said – claiming that most high earners would have expected to face a new tax increase in Budget 2013.

Read: ‘Nothing on the table’ to provoke teachers’ strike, says Minister

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Gavan Reilly

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