The general secretary of the Irish Congress of Trade Unions (Ictu), David Begg has warned that pay cuts in the public sector would drive the country “deeper into deflation”.
He said that he has been “alarmed” by some of the public discourse about cuts in the public sector and asked “what is the point of adding more people to the dole queue”.
In an interview on RTÉ radio today Mr Begg said: “If the Government was to cut back seriously on wages in the public sector, from our point of view you couldn’t expect any other employer in the economy would do otherwise so you would have a compounding effect and deepen this deflationary spiral.”
“It would be the wholly wrong thing to do”.
Mr Begg said that Ictu recognised the growth in public expenditure has to be reviewed and he said he would be “open” to whatever discussions are necessary on that issue.
He added that although solving the public finances is an important problem it is not going to solve the problems of the Irish economy as a whole.
He said: “It is not going to solve the problems of the Waterford glasses, of the Dells, of the pension problems, that we have.
“We have a huge range of issues that we have to tackle,” Mr Begg added.
In an interview in yesterday's Irish Times, Minister for Finance Brian Lenihan warned decisions on public sector cuts were imminent.
The Minister said the Government would have to make a decision on the State's payroll costs "within a matter of weeks" if it was to address the estimated €11 billion deficit Mr Lenihan expects this year between tax revenues and public expenditure.
"The Government must immediately make adjustments to expenditure in this year," said Mr Lenihan.
"Of course the bulk of deficit will have to be funded through borrowing this year but the State must embark on a credible path now.
"That involves in the first instance looking at our payroll costs for this year and making decisions on that and associated expenditure issues within a matter of weeks."
Mr Lenihan is to produce an emergency plan to cut €2 billion off this year’s spending as agreed in the October budget, while €4 billion will have to be cut off the projected spend for both 2010 and 2011.
The State's largest union, Siptu, warned that any cuts in the public sector would be met with "stout resistance".
Responding to Mr Lenihan’s comments, Siptu general president Jack O’Connor said: “The scale of the figures presented by the Department of Finance yesterday are truly horrendous, and they have enormous implications for our society and our economy.
“We believe that the unilateral imposition of cuts in rates of pay will meet with stout resistance from trade union members generally. If the Government sets about it in that way we in Siptu , and I believe everyone else in the trade union movement as well, will do everything we possibly can to mobilise such resistance.”
“The only way to successfully tackle the issues confronting us with any prospect of success is on the basis of all sectors of society contributing, and with those best able to do so, contributing the most,” Mr O'Connor added.