Public Sector wage talks driven by re-election, not reality.
ISME, Thursday 14th May, 2015.
ISME, the Irish Small and Medium Enterprises Association, drew attention to the latest CSO Inflation Figures today (14th May), and stated that the low levels of overall inflation negate the need for pay rises in either the private or public sectors. The Association repeated its concern at the Government’s decision to begin public sector pay talks, despite the fact that the Haddington Road agreement will not end until after this Government’s mandate has expired.
The annual CPI inflation figure is -0.7%, while there was 0% inflation for the month of April. This is the fifth consecutive month of negative inflation.
ISME Chief Executive, Mark Fielding commented, “With prices remaining relatively stable, talks of increasing wages are premature at best, and negligent at worst and will inevitably lead to a wage/price inflationary spiral, with negative effects across the whole economy”.
“Public sector pay hikes will have a knock on effect across the whole economy. SMEs cannot afford pay increases, their prices have continued to reduce, leading to a further drop in margins and profits. They continue to struggle with Tiger legacy issues, such as excessive rents and rates and now they will face further pay pressures because the Government is trying to buy election votes with the public purse.”
The Association called on the Government to:
Ensure that all state imposed business costs are benchmarked internationally.
Reduce public sector costs by addressing the increments, perks and inefficiencies.
Address energy, telecom, transport costs and exorbitant fees of the monopolistic legal profession.
Reduce employer labour taxes to promote job creation.
“It appears that collectively, government and trade unions have learned little from the mistakes that led to the recession. Government parties are returning to auction politics and spending beyond their means, while as a nation we borrow billions to ‘keep the lights on’. An attitude of entitlement, rather than economic prudence, is dictating public policy,” concluded Fielding.