Government is poised to improve the offer in public sector wage negotiations, says Public Expenditure Secretary Michael McGrath

Public Expenditure Secretary Michael McGrath has indicated the government is ready to increase its €1.2 billion salary offer amid talks over a review of the public sector collective bargaining agreement.

peak up Tomorrow Irelandthe minister said the government will not chase inflation and “we also need the unions to meet”.

Unions rejected a government offer that would mean pay rises worth 7 percent for public employees this year and next.

The previous bid presented by the government would cost an additional €1.2 billion, bringing the total cost of the Building Momentum agreement to €2.3 billion.

Secretary McGrath’s comments come as public sector union leaders are due to meet tomorrow to discuss their strategy after warning they will hold industrial action votes next month.

The strike threat came after talks at the Workplace Relations Commission last month over a review of the current Building Momentum agreement broke down.

Secretary McGrath said the government was ready to be “as flexible as possible”.

“And there is a willingness on the part of the government to improve what is on offer,” he said.

“But we also need the unions that we meet. We will be guided by the Workplace Relations Commission when they believe the terms for resuming these discussions are right.”

He said the government is ready to discuss the timeline for pay rises and the possibility of lump sum payments for low-income earners, and would definitely avoid a situation where there would be industrial action.

“I’m sure unions want to avoid that, too,” he said.

“The best way to avoid that is through discussion and negotiation and both parties have to make an effort, that’s the reality. When people with fixed positions enter into negotiations, nothing is ever agreed.”

He said the government had made what it felt was a good offer of a 7 percent pay rise over two years. This includes a 1 percent increase that was paid in February this year and a further 1 percent increase due in October under the existing contract.

“We are ready to be as flexible as possible, but we will not chase inflation and we will not set wage increases that try to match existing levels of inflation,” he said.

“Because we know what the lesson of this policy is. The lesson is: it leads to embedding inflation in the system. It leads to second- and third-round effects and makes inflation even harder to control. Therefore any deal must be affordable and sustainable and it must recognize that the government cannot fully offset the impact of inflation through pay alone as we have other levers that we will use in connection with the budget in a few weeks time.”

What we are striving for here are sustainable pay improvements in the medium to long term

He said claims by senior Siptu official John King yesterday that the government had refused to resume talks with the WRC and that it had breached the wage agreement were “simply not true”.

“The government has continued to engage with the WRC since the talks we had last month ended unsuccessfully,” he said.

“And these talks with the WRC have continued into the last week and the government has signaled its willingness to resume negotiations.”

He said there are restrictions but “we want to achieve new wage regulations”. “We recognize that Building Momentum, the current collective bargaining agreement, was agreed at a time when inflation was at a completely different level than it is today,” he said. “And that’s why we’re ready to improve the terms of Building Momentum, and I think the sooner we can do that the better.”

He said the government would also like to have a collective agreement in 2023 to have certainty on public wage bills, which account for about a third of current spending.

“We recognize that the living standards of government employees are under real pressure, as are of course people on fixed incomes and workers in the private sector,” he added.

He pointed out that he has a duty to ensure that public service pay remains affordable, not just this year and next, but well into the future.

“Because we have really high inflation now,” he said. “It won’t last forever, but what we’re trying to do here is make commitments to improve pay that we can sustain over the medium to long term.” Government is poised to improve the offer in public sector wage negotiations, says Public Expenditure Secretary Michael McGrath

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