Rate of Inflation Now Exceeds Annualised Social Partnership Increases
Sinn Féin Finance spokesperson Caoimhghín Ó Caoláin TD has said that new inflation figures published today mean that most workers will see their increases under Towards 2016 wiped out in record time. Figures released today show that inflation running at 4.5% in August exceeds the annualised increases of 4.4% provided under the new Social Partnership deal. Deputy Ó Caoláin said that these figures demonstrate again the paucity of this pay increase in this deal and called for it to be addressed as a matter of urgency.
The Cavan-Monaghan TD said: "Towards 2016 offered workers an increase of 10% over 27 months, working out at annualised increases of 4.4%. Inflation for August reached 4.5% up from 4.2% in July according to figures published today. Sinn Fein had warned that Towards 2016 represented a poor deal for Irish workers and that increases under the new agreement would be wiped out by inflation. All that is surprising is that it has happened so quickly. Only days after the Irish Congress of Trade Unions ratified the deal figures are published showing that inflation is now exceeding increases proposed under that deal.
"The rising inflation figure is very worrying news for Irish workers, already over-stretched by excessive mortgages as a result of the failure of the government to do anything over the last decade to stop house price escalation. Workers are likely to find themselves unable to meet spiralling energy costs and mortgage interest increases in particular.
"There is no mechanism in Towards 2016 to counter the effect of prolonged and increased inflation. Previous agreements contained such a review clause (it was invoked in 2000 when an unpredicted rise in inflation took place - workers gained an additional pay increase proving the importance of such a clause). Neither does it include an 'ability to pay clause' sought by unions as a counterpoise to the 'inability to pay' clause in order to enable workers to bargain for a fair share of growth in prosperous companies.
"While the deal was agreed this week, with inflation likely to continue at this rate and erode the promised benefits, there is an onus on the government, employers and unions to come together to renegotiate the pay aspect of the deal as a matter of urgency to take into account the impact of inflation."