TENSIONS between the Government and the trade union movement over a new national wage deal have heightened, with both sides predicting difficulties in reaching agreement.
Sources close to the Minister for Finance, Mr Quinn, last night moved to counter comments by him that he would not be "terribly optimistic" about a successor to the Programme for Competitiveness and Work (PCW). They said that the Minister's remarks made during yesterday's Finance and General Affair's Committee's consideration of the Finance Bill, should not be taken out of context.
Government sources underlined the desirability of securing another deal with the social partners, but said that this would have to be negotiated against the background of meeting the Maastricht requirements for European Monetary Union (EMU).
Mr Quinn's comments were response to the Fianna Fail spokesman on finance, Mr Charlie McCreevy, who asked why there was so much "union unease", especially over tax rates, in the private sector.
"I do think this concept is not going to go away, and it is probably going to be high on the agenda of the negotiations of a future agreement, if there is to be a future agreement, and I would not be terribly optimistic about that at all", Mr Quinn said.
The general secretary of the Irish Congress of Trade Unions, Mr Peter Cassells, identified tax reform as essential to any future arrangement between the social partners. The Minister had made "mistake" in the 1996 Budget.
"He did have the opportunity" to give real tax reform to PAYE workers. What he gave, he spread too thinly. It was a mistake to hold over the money until next year in the hope that it will help in an election. He has not built the bridge between the current programme and a new programme", Mr Cassells added.
His ICTU colleague, Ms Patricia O'Donovan, said that Congress had raised two issues which were "critical to any future programme": social partnership at the level of the firm and the question of minimum standards for part time and contract workers.
The belief that workers are not getting fair tax relief and the perception that the PCW is too inflexible will be among the main grievances to be aired when the unions meet on September 26th to decide whether to enter talks on a new programme.
Meanwhile, Fianna Fail's deputy leader, Ms Mary O'Rourke, said that she had believed for some time that the "reluctant noises" emanating from both sides were a "ritual dance" to precede a renewed agreement. However, she now took the view that these misgivings were "real".
The leader of the Progressive Democrats, Ms Mary Harney, said that she was not surprised that the Minister for Finance was pessimistic about successor to the PCW. He had been tinkering at the edges of taxation system and was "a million miles away from implementing the sort of radical change that thousands of taxpayers are cry out for".
The current spate of unrest among public sector workers is expected to intensify if nurses vote for industrial action in pursuit of their pay claim.