Public sector workers to get €2,000 raise
THE Coalition has stepped up its bid to buy re-election by promising to deliver a pay deal that demands little in return from the country's 290,000 public servants.
State employees are to receive an average of €2,000 each over the next two years - on top of the Universal Social Charge (USC) cuts and tax reductions expected to feature in October's Budget.
Thousands of workers will see a significant reduction in their pension levy as well as pay rises of up to 2.5pc - without having to give anything back in terms of productivity.
The Herald can reveal that Fine Gael made an 11th hour intervention to prevent further income boosts for higher-paid public servants through additional reductions in the deeply unpopular pension levy.
A late decision was also taken to exempt government ministers from what has been dubbed the Lansdowne Road Agreement, which will cost the State €566m over three years.
A source involved in the negotiations described the package, which requires approval from all public sector unions, as a "vote for industrial peace".
But business group Ibec said the deal does not contain specific measures that illustrate that greater productivity and service improvement are on the cards.
Elements of the deal include:
l Pension levy thresholds will be lifted from €15,000 to €24,750 in January.
l A second wave of pension levy reductions will bring the threshold to €28,750 next year.
l Public servants on less than €31,000 will get a pay increase of 1pc to 2.5pc.
l The third phase will see workers on salaries of up to €65,000 receive a pay rise of €1,000.
In terms of the higher-paid workers, the pay deal sets in stone a previous clause in the Haddington Road Agreement to partially restore pay.
Government sources argued that that deal ensures the extension of hours in that agreement will remain, and that there is also an agreement surrounding binding resolution in relation to disputes.
Minister Brendan Howlin said the deal "reinforces the commitment of public servants to the wider reform agenda".
But Ibec said it is concerned about overly-restrictive rules around out-sourcing.
"It sends out a negative signal in terms of the Government's attitude to the role of the private sector in delivering services. It's quite protectionist, actually," said policy chief Fergal O'Brien.
See Dan White: Page 14