Dáil Éireann debate -
Thursday, 28 May 1925

Vol. 11 No. 22

COMMITTEE ON FINANCE. - VOTE 4—EXCHEQUER AND AUDIT.

Mr. BLYTHE

I move Vote 4:

Go ndeontar suim ná raghaidh thar £13,295 chun slánuithe na suime is gá chun íoctha an Mhuirir a thiocfidh chun bheith iníoctha i rith na bliana dar críoch an 31adh lá de Mhárta, 1926, chun Tuarastail agus Costaisi Roinn an Árd-Scrúdóra.

That a sum not exceeding £13,295 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1926, for the salaries and expenses of the Department of the Comptroller and Auditor-General.

A question was raised by the Public Accounts Committee in paragraph 31 of their Second Interim Report in regard to the inclusion of the National Insurance Audit in the Exchequer and Audit Department. This is a matter that will be dealt with in the Minute which will be submitted in connection with that Second Interim Report, and I do not propose to offer any observations in connection with it at the present moment.

Once or twice during the year some question was raised of delay in furnishing the Comptroller and Auditor-General's Report. Under the Exchequer and Audit Act of 1866 that Report was due on the 30th of January in each year, but this year it was laid before the House in April. It should be understood, however, that the delay was due to delay by Government Departments in furnishing their Appropriation Accounts? As a matter of fact, the Appropriation Account of the Army was not furnished, I think, until the middle of March last, when it ought to have been ready a considerable time before that, certainly by the end of January. It is hoped that the machinery of Departments will enable them for the future to deal with their financial business in a more expeditious manner to enable them to keep up to date.

With regard to the various sub-heads of the Vote, there are not any very great changes. Last July, I think, the Secretary and Director of Audit was put to the maximum of his scale. He is a very competent and efficient officer; he has most responsible duties to perform, and it was felt that some increase, beyond the scale of salary that he was actually receiving, was required. I think that there is practically no other change except the employment of a boy, an additional messenger being required. It will be noticed that three senior auditors are provided. Various people are provided on scales, and the amounts this year are less than those estimated for last year, where it would seem that they should be greater in view of the fact that increments would be falling due. But last year, when the Estimates were being prepared, the staff had not actually been appointed, and a certain mean point on the scales was taken as that on which the various people would stand. As a matter of fact, they stand lower on the scales than was anticipated last year when the Estimate was being made up and when the men had not actually been appointed.

Very little travelling has been done by the officers of the Exchequer and Audit Department. That is due largely to the fact that most of their work is naturally done in Dublin at headquarters. There will be, perhaps, a certain amount of additional travelling in the future, because when the local store and supply accounts in the Army have been put into the state that we hope they will be put into this year, officers of the Department will travel for the purpose of carrying out local audits. But so far the Army accounts, local supply accounts, and store accounts have been in such a condition that that travelling did not arise. Under the other travelling sub-head there is a much larger sum—that is, under the National Insurance Audit branch. The auditors of that branch deal with the accounts of various approved societies and have to travel to carry out these audits. Certain auditing work is done by the British Comptroller and Auditor-General on our behalf, and that is repaid under sub-head CC. The accounts that they audit are the R.I.C. pensions——

Mr. CONNOR HOGAN

Are these pensions in respect of retirements in consequence of the Treaty?

Mr. BLYTHE

There were other retirements also. There are the ordinary pensions and the pensions that arose out of demobilisation. It would not have been possible to allocate certain R.I.C. men as having been Saorstát R.I.C. men, and certain others as having been Northern Ireland R.I.C. men. The pensions are paid by the British Government, and the amount is allocated between Northern Ireland and the Saorstát, on a basis which is really more or less provisional so far, of 75 per cent. and 25 per cent. The same thing applies in regard to civil servants who had retired before the Treaty; it was not possible to allocate some of the pensions to the Saorstát and some to Northern Ireland. Consequently the entire pensions are paid by the British Government, and recoupment is made by the Saorstát Government and by the Government of Northern Ireland. The auditing of the accounts of those services is done by the British Comptroller and Auditor-General, and we recoup the cost. If we were doing any work for the British, recoupment would be made on the same basis. Certain small items of audit have actually been done for them, but the work involved was so small that the question of any change did not arise.

Mr. HEWAT

I do not think that there is much ground for criticism on this Vote. It is mainly a Vote for salaries, and I think we recognise that the responsibilities of the people that are doing this work is very considerable, so that the question of salaries does not very largely arise; that is, considering the responsibility of the Department, members of the staff are not overpaid. But I would like, on this Vote, to raise a matter which I have already raised in connection with the Post Office. I do not know whether the Minister for Posts and Telegraphs answered it or not, because the discussion on his Vote lasted a considerable time, and I may not have been here while he was replying to criticisms. I took the liberty to ask the Minister for Posts, in view of the commercial aspect of his accounts, to express an opinion as to the desirability and the necessity of continuing the bonus system through the whole of the organisation of the State. I would like to ask the Minister for Finance to express his views on this matter, because in this account the bonus amounts to about £4,000 on salaries of about £7,000. As far as the accounts are concerned, this bonus system is entirely confusing. You find in the account a scale for clerks of £60 to £200 for men, and £60 to £150 for women. That is not what they are paid; if you add the bonus the matter wears a completely different aspect.

I maintain that of all branches of the community the last people who should have this bonus continuing are civil servants. After all, the Government and their officials are more responsible—I do not say they are entirely responsible—than any other part of the community for variations in the cost of living, and they have more power over the cost of living than anybody else. Why a person should get a salary plus a bonus I do not know. If the cost of living goes up he suffers nothing, though he does lose something if it goes down. Everyone of us is in some way concerned with the question of the cost of living, and why ninety-nine-hundredths of the community should have to bear the increased cost of living on their shoulders, while civil servants alone are put in a different position, I cannot understand. If the cost of living goes up they are recouped; if it goes down, of course they suffer correspondingly. The whole system is out of date, and some steps ought to be taken to put civil servants on a flat salary, so that they should take their share in the ups and downs in the cost of living figure.

Mr. JOHNSON

The Deputy raised this question the other day, and I think Deputy Davin supported his contention regarding the stabilisation of wages. There is undoubtedly a good deal to be said in favour of Deputy Hewat's point, and there are differences of opinion amongst those who are in receipt of varying salaries under the bonus system. But I am very doubtful as to the proposition that the time has arrived when stabilisation should be made. Is Deputy Hewat, with his experience of commerce and finance, prepared to say that we have now arrived at the stage when the pound sterling will maintain its level, that there will not be fluctuations in the cost of living due to variations in currency; or is he prepared to maintain that prices will be fairly stable from now onwards and that the variations in prices will be less in the future than they have been in the past? We saw from the cost of living returns of the last two or three quarters that there had been considerable increases for one or two quarters, and then a considerable decrease. It may be said, and it is claimed by some, that we have arrived at a stage when prices will be more or less stable round about 80 or 90 or 100 points above 1914, though there is a big margin between 80 and 100, but that we have arrived at the stage when prices will be very much less variable than they were since 1914. I think we have not had sufficient experience to be able to say that prices will be stable. If a change is made in the Civil Service in respect of the bonus system, does Deputy Hewat advocate that the bonus should be absorbed into the pay at a given date, and if so, at what date?

Is it present prices he is going to assume as the basis of stabilisation? The question would have to be discussed very thoroughly, and I think no decision should be arrived at, either now or in the future, without consultation and conference with the people concerned. I think that there should be a proper understanding with the officers of the various Departments before any stabilisation takes place. It is not so simple a proposition as the Deputy may think, and it is not so easily proved as asserted that the time has arrived when there should be an absorption of bonuses into salaries. I think it might even be contended with a good deal of force that the bonus system ought to be a permanent part of the scheme of pay; a good case might be made for that proposition. It is not generally acceptable. Most people think they would rather gamble on the value of their pound, following the example of commerce, and industry, and finance. But until we are satisfied that prices are not going to fluctuate in anything like the degree that they have for the last five or seven years, that we are entering a period of stable prices, I think we ought not to make the change that the Deputy advocates.

Mr. HEWAT

I do not expect the Minister to do anything in this matter without full consideration. I raised the question because I think the time is ripe for the consideration of the continuance of bonuses in the Civil Service after they have been abolished everywhere else. In the case of the Irish railways the wages are all inclusive. Take commercial life. For a very long time during the war, and after the war, owing to the uncertainty of prices the contract system lapsed. The contract system to-day is in full force. I merely bring the matter under the notice of the Minister and the House, and I hope that the Minister will tell me that he will give the matter full consideration.

Mr. JOHNSON

I agree with Deputy Hewat that it would be helpful if the bonus could be indicated against the rate of pay. We see here, for instance: "Senior Auditor, £550 to £700, rising by £20." Unless we are pretty sharp at calculating we do not know what that means in fact. If we knew that £550 meant £750 when bonus is included, it would help us to appreciate the real merits of these figures.

Mr. BLYTHE

With reference to the point raised by Deputy Johnson, there is in existence for the use of accountants in Government offices a ready reckoner showing the amount of bonus on each rate of salary, and Deputies could have that. Under the bonus arrangement scarcely any salary carries bonus much in excess of £200. In certain odd cases it runs to £230 or £240, but generally it does not run much above £200. Probably on £550 it would be something like that. The difficulty about the matter, apart from the fact that there is no certainty that prices are very stable yet, is that the bulk of civil servants have Treaty rights. We could not merge the bonus in salary and deprive them of the possibility of an automatic increase in case the cost of living went up, without their consent. If we were to do it without the express consent of civil servants, we would certainly have to fix an inclusive salary so high that they would run no risk of loss and that any court would be so convinced. It seems to me that to fix it in such a way as not to be upset by the courts, or as would secure the agreement of civil servants, would involve making the salary include not bonus according to a cost of living increase of ninety-five points, but, perhaps, one hundred and fifteen or one hundred and ten points. Certainly if I were to sit down beside a body of civil servants to reach agreement with them for the abolition of bonus, something would have to be given away, and I believe they would certainly have to get a salary fixed that would include bonus at a higher rate than according to ninety-five points. As long as there is the possibility of fluctuation, I do not think it is practicable to get rid of the bonus by having an inclusive salary. If we had had four or five years of very small fluctuations, it might be possible to strike a bargain that would be fair and not expensive to the State, but I believe such a bargain could not be struck at present.

There is the further point that while there is a possibility of variations that are appreciable, there is a good deal of justice in the bonus system. The people who benefit particularly by the bonus system are not those who can be held to have any great responsibility for policy or administration. The higher officers get a comparatively small amount of bonus. It does not generally run to more than a few pounds over two hundred. Those who really benefit are the persons whose basic salary is small. Persons whose basic salary is £91 or under have a bonus calculated at 130 per cent., with a deduction of 1/26 for every five points that the cost of living falls below 130. That means that their bonus is substantial, amounting practically to 100 per cent. Over £91 and below £200, I think the calculation is based not on 130, but 90 per cent. Over £200 it is based on 60 per cent. The scale is detailed in the front of the Estimates. Then there are special cuts for salaries above £500. I think that the maintenance of the bonus system for the present is absolutely dictated by the Treaty rights that civil servants have.

Mr. T.J. O'CONNELL

If the Minister could see his way to put in the ready reckoner instead of this calculation in future Estimates it would be much simpler.

Mr. BLYTHE

The only objection is that the Estimates are published for the year and you might have different rates of bonus during that period. At present it is 95 points. Before the end of the year it may be 90, or it may be 100.

Mr. JOHNSON

The Estimates are made out on the basis of 95 points.

Mr. HEWAT

Might I ask do the Treaty rights apply to persons entering the civil service after the Treaty?

Mr. BLYTHE

No, but of course you would have great difficulties if you made a distinction like that between men sitting side by side in one office. The great bulk of the civil servants have Treaty rights. Those who came in since are often on lower scales, with less leave. Their conditions are not conditions which could be regarded as too favourable, like those arrived at in England in the period after the war. But if we add to these less favourable conditions the abolition of the bonus, we might have friction and lack of harmony which would not be worth the saving.

Vote put and agreed to.