Price Cuts For Consumers Should be Prioritised, Says O'Connor

The ICTU and SIPTU General President has said the Cabinet should prioritise price cuts for consumers over wage cuts for low paid.

In a controversial statement, Jack O'Connor said if the Cabinet is really interested in creating jobs its time would be better spent prioritising legislation to end upward only commercial rent reviews and banning profit taking at major public events by the tourist industry than in crucifying low paid workers by dismantling wage protection systems.

He also called on the Government to make it clear that the generous VAT reductions to the tourist sector would be withdrawn if these were not passed on to the consumer.

Mr O'Connor said: "The Cabinet should not waste time at tomorrow's meeting working out ways to crucify the lowest paid 20 per cent of the workforce through further cutting their pay. Reducing basic wages and employment rights will make no contribution to job creation, as the Government's own independently commissioned Duffy-Walsh report has established.

"In fact the reverse is true as it will further reduce the capacity of people who have to spend every penny they earn to live from week to week. The latest quarterly figures show a drastic decline in consumption and it makes a nonsense of Government calls for more consumer spending, if this group is targeted again.”

The ICTU and SIPTU General President continued: "The measure would usher in a vicious cycle of dismissals as unscrupulous employers replaced existing staff with lower paid entrants to the labour market, further exacerbating the fear and sense of insecurity that are undermining consumer confidence. It would also undermine decent employers trying to do the right thing by employees.

"The Cabinet members could use their time more constructively by implementing a few simple but important measures which would actually contribute to job creation. These include legislating to end upward only rent reviews before the Dail's summer recess and prohibiting the practice of some hotels, restaurateurs and other service providers of raising prices to coincide with major concerts, sporting and other public events.”

Mr O'Connor concluded: "Finally, the Government should issue a clear statement of intent that it will withdraw the very generous reduction in VAT rates from 13.5 per cent to nine per cent due to come in on July 1st if this is not clearly seen to be passed on to consumers."

(BMcN/KMcA)