GOVERNMENT PLANS:TAOISEACH BRIAN Cowen has confirmed the Government will proceed with public sector pay cuts in the budget next week without the agreement of the unions after the collapse of negotiations.
Mr Cowen said it had been made clear that no deal had been agreed. The unions’ proposals, which included workers taking 12 days’ unpaid leave, had provided no certainty that the necessary savings could be achieved.
“That particular proposal was inadequate for our circumstances and we made that clear,” he said.
Mr Cowen said “exhaustive” discussions had been conducted in good faith and there was great disappointment on all sides that it had not been possible to agree a way forward. “What we now have to proceed with is reducing, by way of a pay cut in a proportionate fashion, the public service pay and pensions bill.”
Mr Cowen was speaking at Government Buildings, where he was flanked by Tánaiste and Minister for Enterprise Mary Coughlan and Minister for Finance Brian Lenihan. Government chief whip Pat Carey was also in attendance.
He said the unpaid leave proposal came from the trade unions and was considered by the Government, which had reserved its position on the matter.
“Unfortunately what occurred during the week was the suggestion that a deal had been done. Clearly that was not the case.”
The Taoiseach said Mr Lenihan would now proceed with a budget that would include an adjustment of €4 billion in Government spending, including a €1.3 billion reduction from the public sector pay and pensions side of the exchequer account.
“We have a reality that we have to confront, that we have to face . . . We have to proceed with that requirement. It’s an imperative.” Unfortunately no area of expenditure was immune from consideration, he said. “All areas will be affected.”
Mr Cowen said it was right and responsible for the Government, as an employer of 315,000 people, to conduct discussions and try to find agreement.
“That was the source of some criticism, it seems to me, during this week. I want to say very clearly I’m strongly of the conviction it is the duty of the State as employer to engage,” he said.
“I make no apology whatever to anyone for trying to find an agreed way forward.”
He rejected accusations that the breakdown of the talks was a “PR disaster” for the Government.
Mr Cowen said the Government had made it clear for some time that the public finance position was unsustainable. Tax revenues had fallen sharply back to 2003 levels, which meant a deficit in the region of €22 billion this year. “To bridge this gap, we are borrowing over €400 million per week. This cannot continue,” he said.
Speaking later last night at the annual Cairde Fáil dinner of party supporters at Citywest, Mr Cowen said that despite the Government’s best efforts, it had not been possible to strike a deal with the public sector unions.
Rejecting the criticism that “going the extra mile” was a sign of weakness, he expressed the hope that progress could be made at some other time in the future.
Looking ahead to next week’s budget, the Taoiseach said: “At a time when the cost of living is decreasing, we have a once-off opportunity to make a structural adjustment in wages and welfare payments while making least impact on real standards of living.
“The burden of adjustment will be borne by everyone and the Government will attempt to be as fair as possible in all aspects of the budget and we will lead from the front in that respect.
“Obviously, as well as achieving reductions in spending, we have to look at initiatives that will focus on those areas of the economy that can develop and grow jobs and the Minister for Finance will be outlining those initiatives. We know that we have less room to manoeuvre than before, but this budget will be about investing in the future as well as reducing spending for the coming year.”
Mr Cowen said people expected governments to take the necessary decisions to make their lives better, even if they initially had unpopular consequences.
“As any employer facing a difficult year would do, it was right and responsible to sit down with staff representatives and see if reductions can be achieved by consensus and agreement,” he said.