Written Answers. - Negotiations with Social Partners.
Pat Rabbitte
Question:
40
Mr. Rabbitte
asked the
Minister for Finance
his views on the prospects for another Programme for Economic and Social Progress in view of his meeting with the representatives of ICTU on 15 November 1993, and the failure of the Government to meet the deadline set by the trade unions for a commitment to remove the 1 per cent levy; and if he will make a statement on the matter.
Peadar Clohessy
Question:
54
Mr. Clohessy
asked the
Minister for Finance
if, in respect of discussions being held with the social partners on a new pay round, reports that the Government is contemplating the introduction of a public service pay freeze and tying of private sector wage increases to the rate of inflation are accurate; and if he will make a statement on the matter.
Ivan Yates
Question:
55
Mr. Yates
asked the
Minister for Finance
whether negotiations on a successor to the Programme for Economic and Social Progress will be commencing in 1993 in view of the difficulties of the preliminary discussions to date.
Bernard J. Durkan
Question:
83
Mr. Durkan
asked the
Minister for Finance
whether he has indicated to the social partners his proposals, if any, for the reduction, removal or replacement of the 1 per cent income levy; and if he will make a statement on the matter.
Bernard J. Durkan
Question:
85
Mr. Durkan
asked the
Minister for Finance
when he will abolish the 1 per cent income levy; and if he will make a statement on the matter.
With your permission a Cheann Comhairle, I propose to take Questions Nos. 40, 54, 55, 83 and 85 together.
The position regarding the 1 per cent income levy is that this measure was introduced in the 1993 budget in order to enable us to maintain budgetary discipline as an essential element in overall employment strategy. The alternative of increasing tax rates would have involved reversing the progress in reform of income tax over the last few years. The Government has acknowledged all along that the levy is temporary and that it will be removed at the earliest possible date, subject to the overall budgetary position.
As regards the discussions which have been taking place between the Government and the Irish Congress of Trade Unions about the levy, both sides acknowledged that the phasing out of the levy would have significant implications for the public finances and that these would have to be taken into account in the negotiations on a new National Programme. In the light of this, the Government confirmed that it was their intention to begin to phase out the levy in the 1994 budget and to complete that process not later than in the 1996 budget, without prejudice to its responsibility to take any other measures which might be necessary to maintain firm control of the public finances.
The Government believe that they have moved significantly to meet the concerns expressed by ICTU in terms of stating clearly a starting point for the removal of the income levy and a specific time period over which this would take place.
The Government made clear, as they have to do as Government, the limited scope that exists for tax changes in the years ahead and the consequences of the removal of the 1 per cent levy for the public finances. They believe they could not have acted otherwise, bearing in mind in particular the employment needs of the economy and the numbers of people who unfortunately are unemployed, and the signficant number who are long-term unemployed.
While it has not proved possible to reach agreement with ICTU to date, the Government are available at any time to resolve the situation, provided they can do so in a way that is consistent with their responsibility in terms of employment and the public finances.
As regards negotiations on a newProgramme for Economic and Social Progress, the Government are of the view that a new national programme would be in the best interests of the country and they would be anxious to take part in negotiations towards that end, but not at any price. Negotiations would of course have to be with all the social partners, and the impasse reached with ICTU is a serious obstacle to negotiations. I am not therefore in a position to say whether or not talks will commence in 1993. As far as the Government are concerned, they have as I have said moved significantly to meet the concerns of ICTU. Our door remains open for further discussions, subject to our responsibilities as I have already outlined.
It will be clear from what I have said that there have been no discussions with the social partners on a new pay agreement. If and when such discussions take place, they will have to be driven by the needs of the Exchequer, competitiveness and employment maintenance and creation. Beyond that, I would not wish to comment on the Government's likely position in relation to such discussions.
