THE National Economic and Social Council (NESC) is to call for a strategy of wage moderation in return for tax concessions in the conclusions of a major report on the economy to be published today.
The report will back the reduction of the standard 27 per cent income tax rate to 25 per cent and support reductions in employers' PRSI to boost employment.
In calling for the social partners to negotiate a new national programme to replace the Programme for Competitiveness and Work, the NESC will emphasise the importance of meeting the Maastricht criteria - the rules which states must meet to qualify for the single EU currency.
The report emphasises that wage bargaining must be led by the private sector which is exposed to international competition. As previously reported, the NESC favours closer coordination between public and private sector wage bargaining.
It is sceptical of the idea of wage reductions to compensate businesses hit by sterling weakness if the British currency stays out of monetary union.
Tax reductions should help pay for wage moderation, it says, and it may recommend that a set amount of resources - probably more than half a per cent of national output a year - be committed to reducing taxes each year.
However, the report says resources must also be devoted to improving social welfare payment levels and that minimum payments levels recommended by the Commission on Social Welfare must be met during the term of a new programme.
It recommends a more rigorous approach to linking unemployment payments to the availability to work of the recipient. The NESC addresses what will happen when structural funds from the EU start to fall after 1999 and highlights the need for a long term strategy in areas like tourism to deal with this.
The report looks at other areas of policy including crime, and backs the Minister for Justice's new approach in this area.
The report considers the conclusions of an earlier report written for the NESC, which said that employees needed a greater say in their companies and a stake in their performance. Today's report is not thought to have such firm recommendations.
