'No bonanza for public servants' as talks begin on the restoration of pay
THE Government has warned unions that there is no scope for a pay bonanza for 300,000 public servants as talks aimed at restoring pay finally begin.
Trade unions are set to press for the immediate phasing out of the deeply unpopular pension levy as part of several demands being put forward.
But government sources say any restoration of pay must be accompanied by increased productivity in several sectors of the public service.
There will also be a warning that the Government is not prepared to forfeit the economic recovery in return for pay hikes for public servants.
The talks, which are due to last several months, will form the basis for the gradual restoration of the take-home pay of workers such as teachers, nurses and gardai.
One of the first issues up for debate will be the public sector pension levy, which averages 7.5pc on salaries.
SIPTU president Jack O'Connor this week called for the abolition of the pension levy -something which has not been ruled out by government sources.
Speaking yesterday, Tanaiste Joan Burton said the issue of the pension levy is likely to be considered.
The Labour Party leader said she expects the talks to focus predominantly on restoring the pay of low- to middle-income earners.
Business groups have said it is "too early" for public sector pay increases and have warned that the discussions may be influenced by election pressures.
Patricia Callan, the director of the Small Firms Association, said there is "absolutely no grounds, across the board, for pay increases in any sector - public or private".
Speaking ahead of the pay talks which are due to kick off between the Government and public sector unions in Dublin today, Ms Callan said their members have told them "we can never go back to a situation where there are pay increases" for the sake of it.
"They should always be tied to productivity gains. In the context where that is the case, and where inflation is practically zero, there are absolutely no grounds for across the board pay increases," Ms Callan said.
She went on to say that there was "no justification on the basis of inflation or on the basis of pay pressures in terms of the private sector".
Ms Callan also noted that the public sector employer is essentially still borrowing hundreds of millions every month in order to keep the country afloat.
Employers lobby group ISME has called for the Government to postpone the public sector pay talks as they feel it would be best if they were held after the next General Election.