Fine Gael and the Labour Party have today published separate policy documents proposing cuts in the public sector pay bill and the adoption of measures to stimulate job creation.
In documents published this morning, Fine Gael pledged to cut the public sector pay bill by €1.7 billion through a combination of pay cuts and 10,000 redundancies. It also proposed a ‘jobs budget’, which it said would take 50,000 people off the Live Register in 2010.
Publishing its own proposals, Labour proposed a full-year financial ‘adjustment’ of €5.8 billion and the establishment of a €1.15 billion job creation fund to drive economic recovery.
Fine Gael finance spokesman and deputy leader Richard Bruton said the party’s plan was driven “by a determination to get people off dole queues and back to work, to improve our competitiveness and to correct the fiscal crisis in a fair and balanced manner”.
He said the proposals would take 50,000 people off the Live Register in 2010 and 175,000 by 2013.
This is based on a combination of the impact of a major cut in PRSI on employment, the roll-out of the party’s €18 billion stimulus plan and targeted employment initiatives. In addition, the party would reverse the recent Vat increase and introduce a short-term reduction in the 13.5 per cent rate to 10 per cent.
“Fine Gael also faces up to the challenge of correcting the crisis in our national finances by making tough choices to generate a net deficit reduction of € 4 billion whilst allowing for the above pro jobs proposal,” Mr Bruton said.
He said the €4 billion reduction was comprised of a €1.7 billion reduction in the public sector pay bill through pay cuts and redundancies (€1.2 billion in payroll cuts and €500 million in redundancies); a €1.1 billion reduction in current spending programmes; a €0.4 billion reduction in social welfare costs (net of job activation measures); broadening of the tax base (€0.4 billion) a transfer of capital spending to the stimulation plan (€0.5 billion).
Key elements of the Labour Party's plan include enterprise supports, including PRSI scheme for new jobs, an additional 60,000 training and work experience placements and the “fast-tracking of labour-intensive capital projects”.
It also proposed a negotiated agreement to secure savings in the public sector wage bill, based on securing reforms and savings, and on ensuring a more efficient public service.
The document also includes an ‘industrial peace’ proposal, under which the trade union movement would give a commitment that if such actions were taken, there would be no strikes and a guarantee of industrial peace.
The party also proposed a statutory home guarantee for those facing difficulties meeting mortgage repayments.
Labour Party leader Eamon Gilmore said the €1.15 billion jobs fund would be allocated by a ministerial task force. He said the Jobs and Recovery: Labour's Proposals for a Fair Budgetdocument was "far more than a simply pre-budget statement: it is a programme for jobs and economic recovery".
He said a negotiated reduction of €1.3 billion in the pay bill should be based on reforms to ensure a more effective public service for the future and pay caps for those on the highest salaries.
Mr Gilmore said revenue could be enhanced through a carbon levy, targeting tax exiles and introducing a third rate of tax at 48 per cent for individuals with income of over €100,000.
“The problem in the public finances has to be faced up to now, it can’t be postponed…but it most be done in a way aimed at getting people back to work,” he said.
In addition, Labour would make savings of 17 per cent in tender prices on capital spending, Mr Gilmore said.
Labour’s finance spokeswoman Joan Burton called for a Cabinet-level jobs task force outside the normal estimates process.
Ms Burton said Government had predicted employment levels would fall by 75,000 next year. “We don’t feel that that is something that we should concede,” she said.