THE one per cent economic crisis levy on the wages of every worker in the Irish Budget was described as ‘a crude instrument that disregards the principle of ability to pay and will inflict further hardship on those on middle to lower incomes’, by SIPTU General President Jack O’Connor yesterday evening.

‘While we recognise the reality of the scale of the problem in relation to the public finances, the principle applied should have been to ensure that those who benefited most from the Celtic Tiger should have paid the most.

‘Accordingly this levy should have had a threshold and been graduated to ensure that no one on average industrial earnings, or less, should have had to pay anything.

‘This might have exacerbated the revenue deficit because of the high proportion of working people who are only on average industrial earnings or less, but that could have been addressed by increasing tax levels on a graduated basis on higher income earners and adopting a more progressive approach to capital and wealth taxes similar to those that apply in the more progressive and dynamic economies of northern and central Europe.

‘The imposition of the levy on middle and lower income earners is further exacerbated by the failure to increase tax credits and the inadequate increase in the standard tax bands, not to mention increasing excise duty on petrol, which affects those who have to use a car travelling to and from work.’

Meanwhile the Irish Congress of Trade Unions (ICTU) stated that Budget 2009 shows little evidence of social solidarity and will result in working families shouldering the biggest share of the burden of the economic crisis, Congress said today.

According to General Secretary David Begg the imposition of the one per cent levy was arbitrary and indiscriminate and will hit the lower paid disproportionately.

Mr Begg said he believed that the levy would have the effect of virtually ‘wiping out the extra increase negotiated for the lower paid in the recent national pay deal.’

He also condemned the rise in the VAT rate as a further attack on the lowest paid and the most vulnerable.

Mr Begg said it was utterly unreasonable to have applied the levy only to PAYE workers and to have been equitable, it should have applied to all income including business profits.

Mr Begg also said that the Budget had failed the ‘equality test’ insofar as it made no effort to target those millionaires who pay little or no tax.

In addition, he pointed out that the Budget contained some very worrying stealth charges and taxes, including a shocking 50 percent rise in the cost of visiting A&E from 66 euros to 100 euros.

The rise in social welfare of 6.50 euros was inadequate and did not reflect the increased cost of living that this Budget will deliver.

In addition, stealth cuts that reduce the period for which you receive unemployment and the lengthening of the qualifying period will do nothing for the increasing numbers of people who find themselves out of work.

If there was one positive note from the Budget, Mr Begg said, it was the decision to continue to invest in a capital spending programme that would provide valuable infrastructure and help protect jobs.

l Mount Carmel hospital workers have been guaranteed security of employment and the same pay and conditions in a settlement of the outsourcing dispute.

SIPTU has secured an agreement with Mount Carmel hospital on outsourcing catering and laundry jobs that has ‘set a new standard for the sector’.

Union members voted overwhelmingly to accept the deal yesterday.

Under the agreement, brokered by the Labour Relations Commission, the 65 employees affected are:

Guaranteed employment with Aramark on the same terms and conditions as they have enjoyed at Mount Carmel.

In the event that Aramark loses the contract, the workers are guaranteed continuing employment on the same pay and conditions with the successful bidder.

If Mount Carmel decides to employ direct labour once more to carry out these functions, the staff transferring to Aramark will be entitled to revert to their former positions at the hospital on the same terms and conditions as previously.

Their pension scheme is to be improved.

Contributions will increase, with Aramark and employees each contributing five per cent to the scheme.

At present Mount Carmel contributes three per cent and employees four per cent.

The two women workers resident at Mount Carmel will continue to live there.

Any changes in their future status will be the subject of negotiation with SIPTU and resolution on a basis satisfactory to them.

Aramark will offer voluntary severance for up to ten of the workers who do not wish to transfer.

This will be on the basis of three weeks pay per year of service up to a cap of 1.5 of a year’s salary.

Workers transferring to Aramark will receive a good will payment of 250 euros per year of service since September 8th, 2006.

Half will be paid immediately and half on January 1st, 2009.

SIPTU Health Services Branch Organiser Paul Bell, welcomed the outcome of the ballot.

He said: ‘This agreement sets a new benchmark for workers whose jobs are being outsourced.

‘The formula not only protects their terms and conditions but their security of employment.

‘It shows what can be achieved by trade union solidarity.

‘Employers should take note that just because employees might be women, or elderly, does not mean they are fair game for exploitation.

‘I would also like to thank the LRC, our colleagues in SIPTU and the media, who all played an important role in securing justice for our members.’

Meanwhile a massive row has erupted between the Civil and Public Services Union and the country’s biggest bank.

The CPSU trade union says AIB chairman Dermot Gleeson has a ‘brass neck’ for criticising Civil Service reform, saying they were ‘rich coming from a banker at this time’.

Gleeson had claimed ‘a lack of competition and restrictive practices in the Civil Service makes change more difficult’ at an economic conference in Kenmare.

He added there was a ‘strategic hole at the heart of government’ because of the absence of a department in charge of the downsizing of the public service.

He also questioned whether the Civil Service would be designed as it is if the Government were to scrap the present model and start again from scratch.

Last Tuesday night, the CPSU, which represents 13,000 members in the civil and public service, pointed out that an OECD report earlier this year showed Ireland’s public service compares well with other countries in terms of efficiency.

‘The Civil Service has been engaged in ongoing and successful reform over the past decade and will continue to do so,’ said CPSU general secretary Blair Horan.

‘We don’t need Dermot Gleeson to tell us how to do things better. Rather than lecturing civil servants, bankers should apologise to the Irish people for the economic meltdown they have allowed to happen.’

He said it was ‘not without significance’ that bankers chose to focus on Civil Service reform.

‘This is clearly an effort to deflect attention away from their own role in this extraordinary crisis,’ said Gleeson.