PUBLIC SERVICE salaries rose 3.2 per cent in the year up to last June, according to new figures from the Central Statistics Office (CSO), and by as much as 4.7 per cent in the civil service.

Taoiseach Brian Cowen and trade union leaders separately downplayed the significance of the figures because they do not take account of the public sector pay levy. But business groups claimed they destroyed the case against public sector pay cuts.

Mr Cowen said the statistics did not present a correct comparison to what was actually happening.

He said they did not take into account the pay levy averaging 7.5 per cent across the public sector, or the reduction in public service numbers by up to 3,500.

Impact, the country's largest public sector union, said the figures were out of date. It accused the Government of instigating a divide-and-conquer approach to workers by creating a rift between public and private sectors.

According to the CSO, average weekly earnings in the public service - excluding the health service - rose from [euro]942.81 to [euro]973.09 up to June this year.

Pay rose 4.7 per cent in the civil service and 4.3 per cent in defence. While average salaries in the Garda rose slightly by 0.6 per cent, they fell by 3.1 per cent when overtime was taken into consideration.

The CSO also revealed that 2,700 fewer people were working in the public sector in June compared to the previous year.

Mark Fielding, chief executive of the Irish Small and Medium Enterprises Association (Isme), said the pay rise gave the lie to public sector arguments against cuts. "Public sector unions are now in danger of losing any bit of goodwill at all towards them," he said. "We have a situation here where the country is almost bankrupt and we have a public sector blind to that fact and wanting to hold on to what they have - it is just untenable."

Fergal O'Brien, senior economist with employers' organisation Ibec, said that although numbers in the public service had fallen, the pay bill jumped about 2 per cent in the last year compared with an 11 per cent cut in the private sector.

"Obviously there is clear divergence still between what is happening in the public sector in terms of controlling the pay bill versus what's happening in the private sector," he said.

Niall Shanahan, spokesman for Impact, insisted the CSO figures were "historical data" which did not include the hit taken by public workers with the pension and income levies."That's a decline in income." Mr Shanahan accused the Government of trying to drive a wedge between public and private workers to make it easier to impose further wage cuts. "Part of that agenda is to pit public sector workers against private sector worker," he said.

"This year has been dominated by that agenda and it is tearing people apart. Workers and those who lost their jobs are being told there is a premium for those working in the public sector which must be penalised now in order to correct the economic situation."

Mr Shanahan said the union accepted cost-cutting changes needed to be made but said Government will not sit down with them to hammer out alternatives.

Originally published by PAUL CULLEN.

(c) 2009 Irish Times. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.