Impact general secretary Peter McLoone said today there will be increases in taxation “across the board” in order to deal with the current economic crisis.
Speaking to The Irish Timesthis morning before talks between the Government and unions reconvened at Government Buildings, Mr McLoone said that getting a system that would "spread the burden" was most important.
The trade union is Ireland’s largest public and services trade union representing 55,000 workers.
He also said there was “no reason” the talks should go to the “midnight hour”, to Tuesday’s deadline and that if an agreement could be reached before the end of the weekend, it should be done.
“There is definitely going to be taxation increases across the board. In respect of pay in the private sector, we are satisfied that the recently negotiated [national partnership] agreement provides enough mechanism for companies who want to plead inability to pay."
Mr McLoone warned that wholesale cuts would drive the country's economy into deflation.
"Because without a doubt in the economy there are a lot of companies who still would be in a position to maintain wages or increase wages. Cutting across the board is not the solution to our problems, it will only drive us into a deflation process."
"But what we all have to recognise is that the burden of taxation is going to shift. Our tax base has to be fundamentally restructured. There has been far too much reliance on variables and that won’t work. So yes, we will all have to accept across the economy, that each year over the next number of years, we will each be contributing more. To get a system that is fair and that spreads the burden to those who are best able to bear it, that’s the challenge.”
Asked whether specific changes to the rate of income tax or to the system of tax credits were on the cards, Mr McLoone said he was not sure what the “precise remedy” would be. “But we are strongly of the view that it has to be in the taxation area.”
“There are longer term questions about the budget for 2010 and 2011. That’s where you will address the issues of the tax bands and things like that. It’s a policy matter that we would probably be better off to give a bit more time thinking about. But we do need something of substance right now that demonstrates everybody is going to contribute, and that we can see the evidence.”
“I think the deadline of Tuesday has been set, but in my view we should try to do this as soon as we can. If we can get into discussions and get this finished on Friday or Saturday, or Sunday, then we should do it. There’s no reason in the wide earthly world why we should work up to the midnight hour to some deadline.”
Asked about the mood in the talks when they adjourned last night, Mr McLoone said:
“There’s a sense of relief that we’ve got a framework within which we can negotiate, but you are into unchartered territory, so I think it will be still very challenging to pull some kind of an agreed way forward out of this. What will keep it going, what will sustain it, is recognition that this has to be done.
Mr McLoone agreed that success in the talks would “no doubt” be an affirmation of the partnership process generally.
But he added: “But it would also be a recognition that we are starting in 2009 by agreeing a way of tackling a €2 billion problem, which will better equip us to deal with the remainder of the problems, which is €14 billion for the next four years. So if we stumble at this fence, we won’t be able to get to the next one, we won’t be able to complete the course.”