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SIPTU General Secretary calls for urgent Government action to reduce burden on low paid workers

Date Released: 16 Oct 2008

SIPTU General Secretary Joe O’Flynn told the Union’s Dublin Regional Conference this afternoon said that the employment levy in the Budget would seriously undermine the positive aspects of the new national agreement and the prospects of workers voting for it. He also proposed that the Government intervene to end the high charges of between 20 per cent and 30 per cent that workers face on occupational pensions.

The imposition of the one per cent levy on all earnings up to €100,000 in the Budget would seriously undermine the value of the new national pay deal for workers, especially for those on the minimum or average industrial wage, many of whom would now be brought into the tax net. “This flies in the face of all our efforts over successive agreements to protect the lower paid and, even at this late stage, should be reversed so that all earnings up to the average industrial wage are removed from the levy.  

“There are other more effective means of meeting Exchequer requirements without hurting the less well off and the working poor. The imposition of the levy is regressive and a crude imposition on the very workers who contributed to creating the most productive elements of the Celtic Tiger economy. If the Government wants to secure a new national agreement on a genuine partnership basis that working people can sign up to, then they will have to take steps to ensure the Budget does not impact, deliberately, or inadvertently, on the most vulnerable people in our society. 

“The National Executive Council yesterday postponed consideration of any recommendation on the pay proposals until after a meeting with the Taoiseach and the Irish Congress of Trade Unions to discuss this matter.  Accordingly, as you are all aware by now, our ballot has been deferred for one week.”

Mr. O’Flynn said there were important advances in the new agreement in respect of employment rights, particularly for agency workers, for the transfer of undertakings in respect of pensions and in relation to the 2001-2004 Acts. But, “Ultimately, it is up to the members collectively to determine whether the proposals are acceptable or otherwise”.

He also expressed concern about the enormous impact the financial crisis was having on pension schemes.  Instead of proposing solutions employers, the Government and their allies in the business media were targeting public sector workers and calling for their pensions to be cut as well.

“It is the old tactic of ‘divide and conquer’, to set worker against worker while the people responsible for this mess sneak quietly off the stage. We must not fall into this trap. We must ensure the blame rests on those responsible, the bankers, the developers and their friends in Government.

“Rather than demanding that nurses or hospital support staff, teachers or community workers, local authority workers or emergency service workers, pick up the tab by seeing their pensions dumbed down we must campaign for the radical reform of private sector pensions to ensure a decent income is available in their retirement to all workers.

“One immediate and cost effective solution I want to propose is a State annuity scheme operated under the auspices of the National Pensions Reserve Fund.

“Presently there are only two main providers of annuity cover in Ireland and they enjoy premiums of 20 to 30 per cent over the actual cost of what it takes to provide a pension.

“If a State annuity scheme was to be established this premium could be reduced to a modest figure for administration and other cost purposes, thus alleviating significant pressure on Defined Benefit Schemes and, in the case of Defined Contribution Schemes, enhancing the value of pensions to employees who are at the mercy of the markets.

“I want to call on the Government to immediately examine this proposal with a view to facilitating its introduction as a matter of urgency and with no less speed than that applied to bailing out the Banks.”





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