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May 2017

Pay talks update – end of week one (III)

This week we learned from the Department of Public Expenditure and Reform’s (DPER) ‘fiscal space’ presentation, that there would be €550 million of fiscal space in 2018, but that just €200 million would be left after existing commitments are met.

Fiscal space is the amount of money government has available to spend – on investment, tax cuts, extra staff, pay adjustments, or whatever – in any given year.

The pressure eases in the following years, with €1 billion expected to be available to spend in each of the following three years, 2019 – 2021, but there will also be other calls on this money such as demands for additional public service staffing in key areas like education and health.

A key issue is that the fiscal space available next year is quite small which will pose a major challenge to any frontloading of payments that the union side may seek.

Continuing to unwind FEMPI will not only boost incomes and return what public servants lost during the economic crisis but it will also bring a value to the state in terms of underpinning economic stability in the face of external challenges like Brexit.

A substantial pay deal that is affordable and sustainable remains the goal.

In the meantime, today’s agenda includes discussions on performance management.


Date: Friday, 26 May 17