Cabinet likely to consider living wage plans by summer – Tánaiste
The Tánaiste has said he expects to bring proposals to Government before the summer recess on how Ireland can adopt a living wage.
Mr Varadkar said the Irish Government will be among the early movers in adopting a national, mandatory living wage.
He said he intends to honour the Programme for Government commitment to do so, in pre-prepared remarks for this evening’s National University of Ireland and the International Labour Organisation Edward Phelan Lecture 2022.
The Minister for Enterprise, Trade and Employment said he had just received the report of the Low Pay Commission on the best approach to establishing a living wage.
He indicated that his preferred option for calculating it would be to set it as a percentage of the median wage as this approach is simpler and provides certainty.
Mr Varadkar said he is very conscious that businesses have endured the pandemic for two years and are now facing increased costs due to the Ukraine war, so the reforms would have to be phased in appropriately.
One option, he added, would be to adopt the strategy of the UK where a targeted future living wage rate was set five years in advance to give employers time to plan and prepare.
The Tanaiste also said the Labour Employer Economic Forum will convene tomorrow and the issue of the rising cost of living will be firmly on the agenda
Mr Varadkar said he believes there should be pay rises and increases in pensions and welfare.
But he added that it would be a mistake to think pay rises will solve the problem of inflation, as they won’t bring down prices and could actually contribute to inflation and make the situation worse.
Instead, Mr Varadkar said a comprehensive anti-inflation strategy is needed to reduce the cost of living.
He said Central Banks must “do their bit” and added that it would be better if they reigned in quantitative easing at an appropriate pace, rather than increasing interest rates at this time.
Within the country he also said there should be pay increases, but also pay moderation, productivity and industrial peace.
The income tax burden on middle-income earners should continue to come down, he said, with the case for the indexation of tax bands now stronger than ever.
He also suggested that the cost of services influenced by Government can be reduced and that increased subsidies in childcare next year should be used to reduce costs considerably for parents.
Lower charges for healthcare, public transport and higher education could also be targeted, he claimed.
Strengthened competition and consumer protection laws could also be used, and a reduction in the cost of insurance should also be sought, Mr Varadkar said.
He also said accelerating the transition away from heating buildings with fossil fuels would help, as would the scaling up of social housing construction which would free up private rented properties.