The Programme for Prosperity and Fairness is in crisis but not yet in free-fall. Inflation has broken the psychologically important 5 per cent barrier, effectively eliminating the value of the first 5.5 per cent wage increase under the PPF, but tax cuts still mean a boost in the incomes of PAYE workers.
For the low-paid there is the added consolation of the National Minimum Wage.
And, whether they like it or not, the unions have a much better opportunity to influence key areas of policy affecting living standards through the PPF than outside it. Housing, public transport and childcare provision are just three of the most obvious areas where ICTU now has a significant input.
Trade union leaders, particularly those with large swathes of low-paid workers such as SIPTU, will therefore think long and hard about how best to apply pressure on the Government and employers to protect the tax-pay package in the PPF. Returning to a free-for-all will be the last option.
An alternative being proposed by a long-standing opponent of centralised agreements, the ATGWU's Mr Mick O'Reilly, is the index-linking of the PPF's pay terms. In fairness to Mr O'Reilly, he also advocated such an approach during the PPF talks.
But precisely because the PPF was predicated on low inflation there is no escalator clause. The feeling was that an escalator clause would invite the very problem it was meant to avoid. The result now is that there are no ground rules to deal with inflation. ICTU will receive little sympathy for its plight from the Irish Business and Employers' Confederation.
IBEC's director of economic affairs, Mr Brian Geoghegan, admitted yesterday that inflation could rise further. But he ruled out "any idea of renegotiating pay increases upwards. It will exacerbate the problem, and recognition of this is, in effect, at the root of the analysis which has driven social partnership."
Nor had he much comfort to offer on other measures being proposed by ICTU, such as a reduction in taxes on fuel, or the introduction of price controls. Only in the area of house prices and public transport did he show a willingness to share some common ground with the unions.
Even here IBEC's proposals on housing will not go far enough to satisfy ICTU, while its policy of greater competition in the transport arena goes too far, as far as the CIE unions are concerned.
The president of SIPTU, Mr Des Geraghty, wants a much more proactive approach to the problem than either the employers or the Government have so far shown a stomach for.
"We are not prepared to sit back and let the figures roll on," he said. "Urgent action is needed by everyone." Reductions in fuel duties would cut half a per cent off the rate of inflation. He argues this would most benefit people commuting to work.
While he accepts that competition is the only long-term way to keep prices down, he said price controls can work in the short term and prevent some of the worst excesses of profiteering.
The CPSU general secretary, Mr Blair Horan, who represents more than 10,000 low-paid clerical civil servants, believes price controls would also send out a clear signal that excess profit-taking is unacceptable and encourage greater consumer vigilance.
He said that the PPF must deliver on the projected net increases of 19 per cent in the take-home pay of PAYE workers after inflation is taken into account. That was based on inflation rates of 2.3 to 3 per cent a year, double the present figure.
As far as he is concerned there are three options. Either the Government cuts indirect taxes now, it cuts direct taxes in the December budget, or it accepts that the pay rates agreed in the PPF have to be increased.
The president of ICTU, Mr Joe O'Toole, is suggesting that public service workers, such as his own members in the Irish National Teachers' Organisation, could chase inflation, by the Government agreeing to accelerate the benchmarking process, a new pay review system for the public service.
"The benchmarking body should be immediately established with a view to producing its report within 12 months", he said, "leading to the immediate payment by the Government of the recommendations arising from that report."
It is unlikely that such an approach would win support from private-sector unions, whose members already feel resentful at the series of special pay increases awarded to public-service workers in past agreements.
In the present climate it would also be impossible to contain public-sector pay increases through the benchmarking process. At least Mr O'Toole is displaying his usual imaginative flair in tackling the problem, something lacking on the Government side.
Until now, the success of the economy has ensured that the Government's role in the social partnership process has been largely that of the honest broker and facilitator between the other parties. Most of the fresh thinking has come from the unions and the "fourth pillar", comprising social and voluntary groups.
For the first time the Government may be called upon to find new ways of working a national agreement. So far, as the SIPTU general secretary, Mr John McDonnell, said yesterday, the Government in general and the Department of Finance in particular have shown little talent for anything except complacency.
