McGrath to sign off on €2bn public pay deal before Budget

FINANCE Minister Michael McGrath is set to sign off on a €2bn public sector pay deal ahead of the Budget, the Irish Mail on Sunday has learned.

The current public service pay agreement, Building Momentum, is due to expire at the end of the year.

Talks on a successor agreement will take place later this month and come in the wake of demands from unions to rise pay levels in line with cost-of-living and inflation increases.

Last year’s public sector deal cost the taxpayer €1.36bn, of which €393m was carried over to 2024.

Senior Government sources this weekend said Mr McGrath aims to conclude the talks ahead of the Budget on October 10.

And they indicated the Coalition – anxious to avoid the spectre of strikes in what could be an election year – will agree to a total bill of around €2bn for next year.

A source told the MoS:

‘The public sector unions will be smiling from ear to ear. Michael McGrath is not going to have public sector strikes six months before an election.

‘It will be a significant bill coming in just before the Budget. [Public Expenditure Minister] Paschal [Donohoe] is going to have to open his purse. When you add in the carry-over from last year’s increase, you won’t get out of those negotiations for less than €2bn.’ Public sector unions have warned the Coalition cost-of-living must be addressed in this year’s pay talks.

Kevin Callinan, general secretary of Fórsa, the country’s largest public sector union, told the Irish Congress of Trade Unions (ICTU) congress earlier this year the Government needs to ‘make good the shortfall in pay against inflation’. He said last year’s Building Momentum review didn’t fully compensate for the rate of inflation, which averaged 8% over 2022.