Regional pay differentials and changes to pay parities would go some way to solving the current impasse on public sector pay, according to Mr Philip Lane of the Trinity Economics Department.
Speaking at the annual Kenmare Economic Conference last night, Mr Lane backed up the Government's position that individual public sector pay claims cannot be evaluated in isolation, since the spill-over impact on other public sector groups and the private sector is too large.
According to Mr Lane, a structured approach to public sector pay determination must be re-established.
He added that changes in relative pay parities cannot be achieved through bilateral negotiations with the Government. Rather an entirely new public sector package needs to be negotiated with all the social partners.
This package should include regional pay differences. "Introducing regional pay differentials may be important in filling public sector job vacancies in the Dublin metropolitan area," he said.
He added that the "blue flu" deal with the Garda and the current nursing dispute have placed partnership under serious strain.
"Unfortunately, claims by individual groups of public sector workers, however deserving, cannot be evaluated solely on their merits," Mr Lane said. "The spill-over effects on other public sector pay negotiations and on the private labour market are simply too large for case-by-case settlements. This requires leadership by the heads of public sector unions to ensure that a structured, collective approach is maintained."
Equally, the Government must resist the temptation to place short-term convenience above the long-term importance of maintaining a consistent, disciplined approach to public sector pay determination
On taxation, Mr Lane called for a widening of the tax base, which would allow substantial tax cuts and a significant widening of bands. However, he warned that vested interests usually lobby against new taxes, and powerful business and individuals have a history of getting their way.
He also called for the implementation of a broadly-based property tax. This would not only generate extra revenue but would also cool down the housing market and improve labour market flexibility, by reducing the differential between owner-occupancy and renting.
Imposing user fees for infrastructure (including roads) would also raise revenue and help to relieve congestion. A carbon/environmental tax would again serve the twin goals of raising revenue and improving efficiency.
