The national pay deal is “utter lunacy” in the light of the dramatic fall in inflation, the Irish Small and Medium Enterprises Association (ISME) said today.
Figures published by the Central Statistics Office today show the annual rate of inflation dropped sharply to 2.5 per cent in November as the cost of mortgage repayments, rents and fuels declined. This compares to an annual rate of inflation of 4 per cent in October.
ISME welcomed the drop but chief executive Mark Fielding said: “The dramatic reduction in inflation confirms, once again, the utter lunacy of a pay deal, which will cost employers 6.5 per cent over the next 21 months, an average of 3.7 per cent annually.
“This agreement threatens the very existence of businesses the length and breadth of the country, at a time when wage reductions are needed in many sectors to guarantee the retention of jobs”.
He said the lack of coherent national economic planning is leading to a reduction in business confidence and a curtailment of investment. The lack of bank credit, cost competitiveness and concerns over the dramatic drop in sterling also represented the biggest threats to the business sector.
“It is therefore imperative that Government plays a positive role in leading from the front by cancelling the recent ill-conceived pay deal and ensure that public services achieve real efficiencies, which can be reflected in better services at lower rates.”
