THE TAOISEACH has said he will implement the planned €4 billion in spending cuts next year with or without agreement from the social partners.
In talks with farm leaders as part of the social partnership process, Brian Cowen signalled that a third of the overall cuts would come from reductions in the public sector pay bill, a third from social welfare payments and the final third from cuts in services.
The Taoiseach’s comments to farm leaders at Government Buildings came on the eve of crucial talks between the Department of Finance and public sector unions on Government proposals to reduce the public sector pay bill by €1.3 billion next year.
Separately, public sector unions are also to meet today to consider a proposal put forward by the Impact trade union for a one-day national public sector strike on November 24th in protest against any further cuts in pay for the 300,000-plus staff on the State payroll.
Reductions in the public sector pay bill will not necessarily involve cuts in pay. There have been a number of signals from the Government in recent days on how these proposed savings could be generated.
Last Friday, Mr Cowen indicated the Government was prepared to examine whether the €1.3 billion reduction in the public sector pay bill could be produced by means of reform rather than by pay cuts.
On Sunday, Minister of State for Science Conor Lenihan said the Government would look at reform, cuts and “some effort to mitigate the extent of the public sector pension bill”.
Government sources last night said that, at the talks starting today, the unions would be asked to put forward alternative proposals for generating the reductions in the public sector pay bill without cutting pay.
Sources said that alternative proposals put forward by trade unions would be considered and evaluated by the Government, which ultimately would make a judgment on them.
Government sources pointed to comments made by the Taoiseach last Friday in which he said: “The Government will engage fully in discussions over coming weeks and will respond in a considered way to the views put forward by the social partners. However, the Government must take decisions in the context of the forthcoming budget which it believes to be necessary to secure the future of the economy.”
However, some union leaders argued again yesterday that the solution to the problems affecting the public finances had to involve increases in taxation rather than public sector pay cuts.
Blair Horan, general secretary of the Civil Public and Services Union, said that “a part of the solution must be a top rate of tax on high earners and a wealth tax on assets and not pay cuts for lower-paid public servants”.
Mr Cowen and Minister for Social and Family Affairs Mary Hanafin indicated there would be significant reductions in social welfare spending in the forthcoming budget.
They met representatives of the so-called community and voluntary pillar under the social partnership process.
Séamus Boland of Irish Rural Link said the talks centred generally on the economic situation. He said the Taoiseach had again indicated that cuts of up to €4 billion had to be implemented in the budget in December. Mr Boland said Mr Cowen and Ms Hanafin had said that, as part of this process, there would have to be significant reductions in social welfare spending.