Government to attempt to restart Croke Park talks

The Government is to make another effort to reach agreement with unions on cuts to the public service pay and pensions bill.

Cabinet has agreed to ask the chief executive of the Labour Relations Commission to make contact with the parties in the coming days to establish if there is a basis for a negotiated agreement.

Speaking in the Dáil, Taoiseach Enda Kenny said the Government expected a response from unions within two weeks.

The Government has reaffirmed its requirement for €300m of pay and pension savings in 2013, and €1bn by 2015.

The Croke Park II proposals were rejected by unions last week.

IBEC has welcomed the Government's decision to involve the LRC chief executive in the efforts to reach agreement on cuts in the public service pay bill.

Speaking on RTÉ's News at One, IBEC Director of Industrial Relations and Human Resource Services Brendan McGinty said the savings have to be found within the cost of the public service.

He said the Government needs to set out the cuts needed to make up the €1bn savings.

"The reality is that we are borrowing over €1bn a month to fund our public services. We already have a very high marginal tax rate of 52%, which is well above the OECD average of 36%, and we need to address that", he said.

Earlier, SIPTU President Jack O'Connor proposed that €1bn worth of savings could be achieved through the proceeds of the promissory note deal and increasing taxes on the wealthy.

In an editorial in a SIPTU magazine, Mr O'Connor said that his formula could be the basis for negotiating an agreement on securing savings from the public sector pay bill in two phases.

Mr O'Connor noted that the promissory note deal would save €1bn in 2014 and just over €1bn in 2015.

Deputy Chief Executive of Chambers Ireland Sean Murphy said Mr O'Connor is talking about spending money the country does not have.

Speaking on RTÉ's Today with Pat Kenny, Mr Murphy described the suggestion as "surreal" given Ireland still has one of the largest deficits in the EU.

He said: "We're borrowing €1.25bn a month and the Troika is in town for the next two weeks kicking the tyres and discussing what are we doing."

Mr Murphy said: "The promissory note deal was about helping us as a State to meet our commitments and those commitments are social welfare, pensions, public service pay, front-line services, the health sector, the health budget."

He said: "We're borrowing too much and that is the fundamental issue and this discussion is in many ways about arguing about money we don't have."

Speaking on the same programme, General Secretary of the Civil Public and Services Union Eoin Ronayne described Mr O'Connor's proposal as a "helpful interjection".

Mr Ronayne said: "What Jack is saying, and what Congress has been saying for a long time, is its now time to refloat the economy by an investment stimulus package and cutting €300m this year out of public servants pay, at the lower end, those who spend money, is not likely to help stimulate any economy."

He believes proper use of this funding, along with a "significant off balance sheet stimulus programme" and additional taxation of the wealthy could lessen the requirement for a cut in public service pay and pensions.

Mr O'Connor said that it could be used to fund job creation, alleviate hardship for working families and protect public services.

He said this coordinated approach could form the basis for negotiating a settlement on public service pay in two phases.

An interim term would apply until the end of 2013 to secure this year's €300m saving.

The SIPTU president said this would avoid what he calls an "unnecessary and mutually destructive confrontation".

Meanwhile, Minister for Finance Michael Noonan has said if there is spare cash after next year's budget, it will be used to grow the economy and create jobs.

On his way into Cabinet this morning, Mr Noonan said there is the possibility of "spare capacity" next year.

But he said the Government has to stick to the targets and cannot go on a "spending spree".

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