Talks on possible wage hike will test limits of Donohoe’s mantra on ‘cuts of tomorrow’

FINANCE Minister Paschal Donohoe likes mantras. “The unaffordable pay increase of today becomes the savage pay cut of tomorrow” is one of his favourites. It’s a handy one he trots out regularly to keep the unions on their toes without causing grave offence.

But when it comes to capturing votes, there’s a growing sense that he may not be such a killjoy.

Talks are due to take place on Friday on the issue of recent recruits’ pay. Those who joined the public service since 2011 are paid less than their colleagues for a year or two before joining the same pay scale because of recessionary cuts.

Teachers have been at the forefront of the battle to get them on the same footing.

There is a lot of confusion about what these talks mean.

So far, Mr Donohoe hasn’t done anything more than was agreed in the current public sector pay deal that runs to the end of 2020. It commits to examine the issue but says it should not push up costs beyond the €889m set aside for pay rises. Officially, Mr Donohoe’s entourage of press officers and advisers are sticking to the same script.

But last week, one of the unions’ movers and shakers, Tom Geraghty, announced they would be pushing for a reversal of the new entrants’ cuts in the next Budget.

Interestingly, a day later Mr Donohoe was urging employers to give pay rises in the ‘Sunday Independent’, although he also warned that wages were unaffordable before the economic collapse and helped ruin the economy.

The Finance Minister does not have to do anything. He could stick by the clause in the pay deal that rules out pushing up costs, or he could offer a concession only on the basis that savings are made elsewhere.

Crucially, he should not face industrial action as unions have backed the deal.

But some union sources say they detect a sea change in the so-called official side’s attitude to reversing the cuts.

Mr Donohoe is in a shaky Government with an election probably not too far around the corner. This could be an easy win. Fianna Fáil is pushing for it. And at the end of the day, unequal pay is hard to justify and has caused the Government embarrassment. Remember when junior minister Mary Mitchell O’Connor said everyone doing the same job deserves the same pay while standing beside Education Minister Richard Bruton?

If Mr Donohoe decides to up his popularity stakes with new generations of public servants, the likelihood is that the €200m cuts would be phased out rather than eliminated in one fell swoop.

Crucial questions for the State coffers will be the timeframe chosen and the impact on the cost of recruitment. There may be more money sloshing around than last year, but with the cost of pay rises already promised, more hiring, and a variety of potential economic shocks, lining up these talks may test the limits of his mantra about pay rises.