Dáil Éireann Debate, Thursday - 16 June 2022
86. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform if he will report on his negotiations for a new public service stability agreement; and if he will make a statement on the matter. [31505/22]
Amharc ar fhreagraThe Minister is currently involved in very important negotiations for the new public sector pay deal. The current public sector stability agreement is set to conclude at the end of the year. Given we are now at the midway point, will the Minister provide the House with an update on the negotiations for the new public service stability agreement?
I thank Deputy Ryan for the question. Public service pay has been governed by a system of collective agreements since the Croke Park agreement was negotiated in 2010. These collective agreements have helped to ensure public pay is managed in a sustainable, affordable and orderly manner. These agreements have also enabled significant reform of public services and changes to work practices.
The value of public pay agreements to the Government and the taxpayer is ensuring pay costs are managed in a sustainable and orderly way and in a climate of industrial peace. By and large, public pay agreements have delivered on these objectives over the past 12 years.
The current public service agreement is Building Momentum. This agreement is weighted towards those at lower incomes, with headline increases of approximately 5% for the lowest paid public servants. These groups will also benefit more from other measures in the agreement, including the overtime rates and premia payment adjustments. The current agreement is a two-year agreement that is due to expire, as Deputy Ryan has said, at the end of 2022.
As Deputies will be aware, exploratory discussions have taken place between the parties to the agreement following the triggering of the review clause in Building Momentum by public service unions and associations due to the increasing cost of living. These discussions have now moved to a formal phase of discussions, which are being facilitated by the Workplace Relations Commissions.
As the Deputies will appreciate, while these discussions are ongoing it would not be appropriate for me to comment on the detail of those talks, which should remain confidential to the parties. However, inflation and cost-of-living issues are a feature of those discussions.
These are very challenging discussions given the impact high levels of inflation are having on living standards of workers but also because of the uncertainty in the global economic outlook. The aim in these talks will be to strike the right balance and seek to achieve a deal that is fair and affordable to taxpayers generally and public service employees.
An agreement on public service pay could play an important role in underpinning stability, minimising industrial unrest and supporting the continued delivery of reform and quality public services over the period ahead. However, any such agreement would need to reflect the broader economic context and the current fiscal position where significant challenges are emerging.
As the Minister will be aware, ordinary people are really feeling the pressure in the midst of the unprecedented cost-of-living crisis. Workers and families are really struggling. There are increased energy prices, increased food prices, and even increases in the price of housing. Yesterday, an AA survey showed that petrol prices have increased by 11.5% in the past two weeks. Diesel is now 45% more expensive than it was last year. According to the latest residential property price index, property prices nationally rose by 14.2% over the past year. It should be clear that workers need a pay rise. They need a pay rise that accounts for inflation. Anything less will be a cut in real terms. We are aware the wages of public sector workers can help to anchor the wages of those in the private sector. A genuine wage increase would have a positive spillover effect for the wages of those in the private sector. The Tánaiste has recently spoken about making the minimum wage a living wage, which would be most welcome. The Tánaiste referred to 2026. We cannot wait until 2026.
I thank Deputy Ryan. As we stand here today in the Chamber, the officials from my Department are in negotiations with the public services committee of the Irish Congress of Trade Unions to see if new pay arrangements can be agreed. I do not want to say anything that would be unhelpful to that process. I hope it comes to a successful conclusion. We are entering a critical phase in those discussions now.
The aim here is to strike the right balance. We must be fair to public service workers and recognise the impact of inflation on their living standards. We also must recognise the needs of the State generally. We are now in an environment where the global economic outlook is increasingly uncertain. There is no sign, unfortunately and tragically, of the war in Ukraine ending any time soon. Obviously, the inflationary environment is having a direct impact on workers and on the State generally. It is about striking the right balance. I believe we stand a good chance of reaching agreement but this will require goodwill and co-operation from all parties. We will know shortly whether that is possible.
I completely understand where the Minister is coming from and that we must try to manage the public finances in a prudent manner. I get that. We in Sinn Féin get that. We are, however, constantly hearing the talk about the risks of a wage-price spiral. There is a problem in that. The argument has been there was not any evidence for that, and there has been wage growth in some sectors. The Minister will be aware this wage growth has mostly been in the multinational sectors. For many other sectors wage growth has been stagnant for some time. We are going back to like it was in the 1970s. We cannot go back 50 years and use the same model currently. It is not possible. By giving public sector workers a proper pay rise, I believe this will help them to deal with the cost of living and it would help to ease the burden on families. It would help them to cover their increasing costs. At this stage these are ever-increasing costs. We do not need to transport back to the 1970s. We need to move forward, if possible, please.
I have acknowledged publicly the need to go beyond terms of the current agreement. This is why those negotiations are under way today, and it is hoped they will come to a successful conclusion shortly. The backdrop is challenging in a number of respects. I have acknowledged the impact of inflation on the living standards of workers, both public-sector and private sector workers. There is an increasing level of uncertainty about the global economy. We are facing significant fiscal pressures in the State also. We must make sure whatever arrangements we enter into are affordable. It is certainly my objective and my desire to have a public service pay agreement. It is in the interests of all parties because it does afford industrial peace, which is an important ingredient in having a successful economy.
We must watch the competitiveness agenda. We have to make sure we do not make any decisions in this very difficult time that would disadvantage Ireland from a competitiveness point of view. Ultimately, the success of our economic model is that Ireland has been very competitive in attracting inward investment and as a base for Irish companies to export throughout the world.
