Financial Emergency Measures in the Public Interest (No. 2) Bill 2010: Committee and Remaining Stages

Amendment No.a1 not moved.

I move amendment No. 1:

In page 7, between lines 21 and 22, to insert the following subsection:

"(2) The amendment to the National Minimum Wage Act 2000 effected by section 13 does not affect any right, privilege, obligation or liability acquired, accrued or incurred—

(a) under that Act, or

(b) under any contract of employment entered into before the coming into operation of this Act and to which that Act applied.”.

In view of recent events and their impact across the country, including the disturbance caused to the general public by the banks, I propose the inclusion of this amendment in the interests of certainty. The Minister is aware that the law must be as certain as we can make it. The courts, when interpreting matters, look to the intentions of the legislators as evinced through various debates and consider the Interpretation Act. They also consider various schematic or literal approaches. I am taking a very literal approach so that if the amendment is included, it will ensure any right, privilege, obligation or liability acquired, accrued or incurred under the Act or under a contract of employment entered into before the coming into operation of the Act, and to which this Act applies, would be maintained. There would not be an effort by some employers to devise some method or scheme by which they could apply what will be passed later in the Dáil today to current or extant contracts. I am very eager for this to be accededto.

I listened upstairs to the Minister's contribution this morning, as many Deputies listen to the debates. I raised the recitals to the legislation yesterday in the context of the agreement with the EU and IMF. He indicated that this was the Government's proposal. That is peculiar and somebody is at cross-purposes. The Minister for the Environment, Heritage and Local Government, Deputy Gormley, made a reply to Deputy Hogan here on 25 November. The Official Report, 25 November 2010, vol. 723, col. 210 reads:

Deputy John Gormley: The party across the way has indicated it will renegotiate the minimum wage.

Deputy Phil Hogan: Yes, we will.

Deputy John Gormley: That is nonsensical as this was the first demand by Commissioner Ollie Rehn and others. It had to be in the plan.

Deputy Phil Hogan: That is where the Government failed.

Deputy John Gormley: The Deputy's party will not do it.

I know in the cut and thrust of politics things can be said without an awful lot of thought given to them. This was a thoughtful intervention.

I have never come here to raise spurious issues. I sometimes get a bit fed up of this place, to be honest.

I understand that.

There is much drama, theatre and nonsense. I am not into that.

It is an asylum.

I firmly believe in anything I say; I do not speak in the hope the media will pick up on what I say.

That is what Deputy Bannon says as well.

The best I can say is that I am confused if not bemused. I am worried about the recital, which I quoted yesterday. It states, "Whereas the State is availing of financial assistance programmes provided by the European Financial Stabilisation Mechanism and the European Financial Stability Facility and the International Monetary Fund and it is necessary to take the measures in this Act as part of a range of measures provided for in those programmes to address the economic crisis in the State and to restore domestic and international confidence and to prevent a sovereign debt crisis affecting the State;".

Laws are laws and once enacted they circumscribe the ability to act, prescribe the manner in which one must act and contain an obligation to obey. If that is the position, the tram lines are being laid out and it will be difficult to act in a manner other than that set out by the Minister. The rate of the minimum wage does not have any bearing on the Exchequer, will not reduce the national debt by one cent and, as I stated yesterday, the proposed reduction will not create a single new job. It is wholly within the prerogative of the Government to set the rate because the legislation writes out the Labour Court as the court of reference for determining the level at which the minimum wage is set. The Government may still have to take recourse to the Labour Court to identify the factors that will be involved and seek advice.

This is a circular bird in the context of legislation. The amendment proposes a belt and braces approach and brings to mind the old story told down the country that if one puts one's toe in the fire, one might get burned. I do not want to get burned. In light of recent events, it is clear that legislation should be pre-emptive and ensure unintended consequences do not arise. It is a counsel of prudence to pursue the approach I propose.

I am probably the most accommodating committee Chairman in the House. I facilitate everybody and show endless patience. While almost everyone who came before the Joint Committee on Enterprise, Trade and Innovation referred to the minimum wage, no one argued that reducing it would create large numbers of jobs.

Notwithstanding the complete opposition of the Labour Party to section 13, which is based on facts rather than feelings, I have proposed this amendment with a view to ensuring that, should the legislation be passed, employers will at least be prevented from undermining the Minister's stated intention to preserve existing contractual positions. The Minister should accept it in the interests of clarity and certitude. While I do not know what is the position regarding the amendment as I am not privy to the advice available to him, parliamentary counsel generally kick to touch amendments of this nature. I was struck almost immediately by the need to insert in the Bill a provision of the type proposed in my amendment. I hope the Minister will accept it.

I support the amendment. The case Deputy Penrose makes has considerable merit. As a case has not been made for reducing the minimum wage, my party will oppose section 13. Notwithstanding its opposition, if the legislation is passed by virtue of the Government exercising its majority, it is important that the measure does not have unforeseen consequences. This is the issue the Deputy's amendment addresses.

Less than 4% of the labour force is on the minimum wage. With almost 1.9 million people at work, the number involved is not significant — the Minister can do the maths. Those on the minimum wage are, by and large, young people and immigrants working in hospitality and the wider service industry. Most of them do not have formal contracts. While the Minister intends that the measure will not apply to existing employees on the minimum wage and will apply only to new staff taken on by employers, that is not what will happen in the real world. Many of those on the minimum wage work behind the counter in shops, serve in bars and restaurants or are employed in similar casual jobs. Some are students and many work part time. My fear is that they will be let go because it will cost €40 per week more to keep them than it would to employ someone else on the new rate.

The rights of existing employees must be protected. Not all employers who employ people on the minimum wage are altruistic. Like all employers they are trying to cut costs. This means Mary may be told she is not needed next week and within three weeks her employer will replace her with another young lady. Given that, under the proposed change in the law, a new employee can be paid €1 an hour less than an existing employee, current employees will be shown the door on some pretext or other.

The effect of the amendment would be to ensure an unforeseen consequence would not arise that would affect the privileges or obligations of employees. Specifically, it would preclude "any contract of employment entered into before the coming into operation" of the legislation from being interfered with in any way.

There is a difference between the theory and practice. While I do not wish to cast aspersions on any group of employers, there is a genuine fear that people on the existing minimum wage will be let go and replaced by others earning the new minimum wage, which is €40 per week less that the current rate. I ask the Minister to address the issues we have raised.

The Minister's officials gave me a briefing on the legislation at which we discussed whether the current minimum wage would be affected by the proposed reduction in the rate. In fairness to the officials, they stressed that it was their understanding that the measure will affect new entrants rather than existing workers. While I accept they made this statement in good faith, the amendment tabled by my colleague, Deputy William Penrose, is necessary because only limited protection is available in practice for very low paid workers.

Who are the people who work on the minimum wage? They are mostly women who are primarily employed as part-time and occasional workers. I do not believe many Members, other than employers, fully understand what it is like to be an employee on the minimum wage. According to the officials, approximately 52,000 workers or 3.4% of the labour force are on the minimum wage. They are largely women and young people of both sexes. They are often women who work weekends in hotels doing functions in the weeks before Christmas. Many of them have been working functions in all the hotels with which Members are familiar for decades. I ask the Minister to think about this.

Many of the women in question are parenting on their own or have husbands who are not working. I refer specifically to those of them who come from Dublin city. If they have a contract, it is often with the company which provides the service rather than with the hotel for which they work. First they must try to have their names included in a list and if they are so fortunate, they must make themselves available should the hotel in which they normally work hold a function. If the functions start next year and run into the new year, what protection will such workers have? How many of them will go to a Rights Commissioner? The contracting companies are structured in a way that offers the minimum obligation to these workers. That is what this is about. It is an whole area of employment contracting activity that has been refined. People are probably most familiar with it in connection with Michael O'Leary but he is not a minimum wage employer. People are aware that in his businesses very often people are not directly employed by the big nameplate but by a contracting company. They may be paid onshore in Ireland or, in some instances, offshore. However, there are no contracts in the minimum wage businesses. Consider a person who does not get a full month's work, for example, a woman doing banquets and functions in a hotel who gets a telephone call a month later. How can this woman refer to the previous rate at which she was employed? It simply does not happen.

In the shop trade in Dublin there is a very good union which organises shop workers and does a great deal of good work with very good employers. They have been the backbone of employment in the city centre for 100 years or more. However, yet again, shops are changing. I do not know how many Members understand the way big shops are organised now. They are made up mainly of concessions with branded products being sold in each concession. The original group of workers used to work an apprenticeship in shop work and then, if they wished, had employment for life and could move up the ranks and become buyers, managers and so on. That set-up is now gone and within the big stores there are boutiques and concessions where, once again, contracts for labour do not exist and other than in the specialty of men's clothes vast numbers of employees are women, in particular, lone parents. If such a woman has the opportunity to take work in a local shopping centre in or outside Dublin or in any big town, all her hours are contracted and she must be available to work any number of hours she is called to do. The Minister of State and Deputy Penrose are both lawyers and will know this well. It is very difficult to be in that situation. I wish the Minister of State would tell me how in such a situation it is possible for the worker to go to a Rights Commissioner. In effect, there may be a verbal agreement with the employer offering the possibility of 18 hours per week or, if not, whatever hours are available. The result might be 12 hours per week. That is the way it happens — people are called up. It is not quite casual work but the power rests with the employer.

In many Centra-type and garage-type employments certain employers bring in workers from abroad. People will be familiar with this situation. The employers buy a house in a constituency like mine to house people and may even employ a person from the workers' village or home town to be the housekeeper, buying food en masse for the household. Such contracts are negotiated overseas. One will see people from one area, perhaps India, perhaps China, doing all the shop work in 24-7 type shops and garage outlets. What protection do they have? I cannot see they have any because generally speaking the employers who do this, housing the employees and providing a certain amount of food structure and purchasing capacity, will take people who come here for three to six months. Their work may be renewed. The room for exploitation in this situation is very great.

I return to Fianna Fáil and, in particular, the Green Party. Many green voters were young people, who, with women, are most at risk from the measure being introduced. That is the reality. I cannot see that acceptance of this amendment would undermine the structure in any way. At most, it would apply to 52,000 people who are currently on the minimum wage. However, there may be another factor at play — this is what we do not know about the Fianna Fáil plan. It may be the party's plan that labour contracts which were negotiated based on the minimum wage, with €1.50, €2 or €3 added as agreed by a certain number of employers and unions, can now be renegotiated. Deputy Penrose's amendment would give such workers some level of protection. They would at least be able to go to the appropriate forum and make a case that their wage agreement should not be reduced arbitrarily. This is a very reasonable amendment. I would be very shocked if the Green Party does not accept even this very limited and sensible amendment proposed by the Labour Party that would ensure that workers keep their minimum rights. People will remember that.

As Deputy Penrose noted, the briefing by the officials and the Minister of State's speech both state that the measure will not affect existing workers on the minimum wage. The Deputy identified that this is not actually written into the legislation, rather it is an assurance by the Minister and the officials. However, employers could drive a coach and four through that intention with ease.

Bear in mind this is a Government that was not able to increase in the 2010 tax year the taxation of bonuses to a current year basis. Any tax lawyer is able to do as much. I do not believe the Irish courts would be bound by a decision of the United Kingdom courts in which I understand a related legal case was taken. In regard to NAMA and other court actions that have been taken, as far as I can make out our judges have been very conscious of the financial emergency the State faces. The Minister of State made a pathetic defence today, stating he cannot tax the bonuses in question here and now. I do not believe that to be the case in tax law. For example, in the case of a teacher who marks leaving certificate papers, a university lecturer or other person who marks college papers or a lawyer or a doctor who is paid a fee the year after he or she supplied the service, the fees received are generally taxed at the current year's tax rates, especially if the person is in employment as opposed to being self-employed. The Minister of State spoke of a UK High Court judgment being binding in Ireland, in the context of a national emergency where, under the Constitution, judges can take a view of such an emergency and of where public interest overrides practice. At the same time the Minister of State asked us to believe, on his assurances, without anything being written into the legislation such as the Labour Party amendment would supply, that employers will not find a way to break, change or end contracts. The 52,000 people in question are mainly women. This Bill to reduce the minimum wage is about doing down women and young people. It is outrageous that the Green Party would go along with it and fail to accept a reasonable Labour Party amendment. The Minister of State should explain the situation.

I could discuss other employments in which the minimum wage applies. I will not even get into the issue of domestic house workers who, by and large and be they Irish or foreign, do not have contracts. They may have implied contracts, but they generally do not have active contracts that could be challenged before a Rights Commissioner. One sees the odd test case, but that is it. Even then, voluntary organisations or the Bar's pro bono scheme are required to test those cases, since individuals on the minimum wage are not empowered or do not have the resources to pursue them. This legislation has ethical and moral dimensions that the Government has failed to address.

Under subsections 13(a)(4)(d)(i) and (ii), the proposed order on the minimum wage can be changed to have regard to the likely effect that it will have on levels of employment and unemployment and the cost of living. The reference used to be to inflation. The change in wording to “cost of living” implies that deflation and decreases in the cost of living are to be included. This subsection takes the legs out from under whatever protection the officials believe the 52,000 workers currently on the minimum wage have. Deputy Penrose’s amendment seeks to provide a small floor of protection. Lawyers might be arguing his proposed section versus subsection (ii). Despite the fact the Green Party gave the green light to the reduction in the minimum wage, it is astonishing that the party would not at least try to enforce the protection for women and young people on the minimum wage from those employers who will be unscrupulous in exploiting this provision.

I support the thrust of what the amendment is trying to do. I hope it will achieve Deputy Penrose's intention, that is, to try to protect some people on the current minimum wage. Like Deputy Burton, I am concerned that employers will find a coach and four to go through this unless there is a change of mind at Government level to protect people on the minimum wage. Sinn Féin wants a belt and braces approach to protecting the current minimum wage. The amendment tries to protect some people in that category, so let us try to bag it while it lasts.

While I appreciate the sentiment of what the Labour Party is trying to achieve, one must ask whether implied contracts as opposed to written contracts are worth the paper on which they are written. Where do people in the catering and hotels sectors who look after occasional weddings stand? They do not have contracts, so what is implied in their case? These are the types of gaping hole in the legislation with which the Government must deal. Something firm must be put in place. The types of worker involved have been alluded to by a number of Deputies. I agree that the workers are invariably women, younger people and, in some cases, older people. In my constituency, people who cater for weddings increasingly tend to be older women who have returned to try to scrape together a few bob to keep their households going. They will not be protected under the Government's provision or Deputy Penrose's amendment. They will probably fall between all of the gaps.

This week, the newspapers reported on an employment issue in Dundalk. A woman fired by an employer told him she wanted process, to which he replied in unrosy language that he does not do "f'ing process". This is just one case that has come to light and we all know other cases exist. It is clear what employers with this instinct will do when they get their hands on the Bill after it becomes an Act. While Deputy Gogarty was in the Chamber yesterday, I mentioned how the Green Party was a different party when it was sitting on this side of the House a few years ago and that it would strenuously oppose this Bill if it was still on these benches. This shows how contaminating going into government can be, particularly with Fianna Fáil. We have seen the outcome for other parties and I suspect the Green Party is heading down the same road as the Progressive Democrats. Perhaps it will last for much longer as a party, since its members disagree with what is being done in this Bill and will stay together and try to keep the show on the road.

The budget attacks people on the minimum wage. It not only reduces their wages, but also attacks them by levying the universal social charge. If the Bill is passed, I will remember this principle for a long time after I leave the House. There is still time for people on the backbenches and for Green Party Members to examine this provision and call it unfair, unjust, scandalous and unsupportable. Even at this 11th and a half hour, I hope they will see some sort of wisdom.

I do not know whether to start with the bit I agree with or the bit with which I disagree. I will start with the latter. Given the attempt by Deputy Burton's party leader to grab the rural vote by doing a U-turn on the stag hunting legislation and now his attempt to try to grab the women's vote by claiming the legislation is an attack on them, I cannot take everything the Labour Party says seriously any more than I can ever take seriously anything Fine Gael or Fianna Fáil says in light of the issue of corporate donations. I have had a go at Fine Gael and Fianna Fáil in respect of corporate donations from developers, builders and banks.

The Deputy is a great fellow.

I have looked through some figures. SIPTU donated €23,000 to the Labour Party in 2007. Deputies Burton, Gilmore and Higgins each received €2,500. I could go on. My old friend Deputy Stagg received €2,500. These are just the personal——

The Deputy should come back to section 1 of the Bill.

I am making a point about the credibility of their arguments. SIPTU has engaged in a campaign on the minimum wage. The Labour Party's paymaster is SIPTU. QED. I rest my case.

It is not a good idea for Deputy Gogarty to be discussing credibility.

There is a valid argument to be made on whether reducing the minimum wage is a good idea. Notwithstanding the motivations of various parties and those who fund them, any reduction in the minimum wage must be considered carefully. I discussed this matter in some detail yesterday evening. Before elaborating, I will discuss the substance of the amendment. Deputy Burton asked whether the Green Party should support this amendment. I support it because there seems to be nothing written in stone to protect workers who need the protection in question. In that context, I ask the Minister to take on board the amendment and accept it.

I thank the Deputy.

I support it. However, if there is to be a vote, I will vote against it because of the way the system operates.

The Deputy supports it but will not vote for it. There is a fine position of political principle.

Yet Deputy Gogarty talks about credibility.

The Deputy talks about credibility.

Deputy Shatter talks about credibility and political principle. It is not credible for Fine Gael to talk about tax decreases and for the Labour Party to talk about having no welfare cuts.

The Deputy supports it but will not vote for it.

They will have to face this conundrum in a couple of months.

The Deputy is just proving he is so contaminated by Fianna Fáil that he does not even know what he is saying.

Deputy Shatter should allow Deputy Gogarty to continue.

Deputy Shatter is being entirely disingenuous.

Deputy Gogarty, through the Chair.

The Deputy has adopted the usual Fianna Fáil position on issues from the back bench.

I am merely pointing out the fact that going into government——

Deputy Shatter should allow Deputy Gogarty to speak without interruption.

I know Deputy Shatter is being facetious. I take his point and share the joke but realise that when one goes into government and must negotiate a programme for Government, there are some things one will not necessarily like but with which one must go along.

Was this in the programme?

I support this amendment but if the Whip is applied I, as a member of a Government party that supports having the budget passed in the national interest, will vote with the Government.

Where does principle come into this?

Please, Deputy Shortall.

Deputy Shortall refers to principles. If one is morally in turmoil over one aspect——

How about morally bankrupt?

——and morally in turmoil over passing the budget in the interest of all citizens so social welfare and wages can be paid, one must choose the lesser of two evils. One will be morally compromised one way or the other so I am prepared to be morally compromised for the benefit of our society.

The Deputy has absolutely no credibility.

I have made a point. The Deputy should at least accept that I take on board what she is saying about her amendment.

Big deal. The Deputy has not the courage to vote for it.

It is not about courage.

It is about courage.

The Deputy knows the petty way this will continue.

It certainly is not about courage where Deputy Gogarty is concerned.

One cannot have a debate on a specific amendment and then——

Deputy Gogarty is a fraud.

Deputy Shortall should allow Deputy Gogarty to make his contribution without interruption.

In the most unparliamentary language possible, Deputy Shortall, bless you. Bless you for your kind words.

Is this a Pauline conversion on the road to Damascus?

I am trying to get to the substance of the issue.

Allow Deputy Gogarty to speak. A number of Deputies are offering to contribute.

With regard to the argument being made, I have had correspondence from members of the various unions.


They point out the pitfalls associated with reducing the minimum wage and the fact that unscrupulous employers——

We are going to have——

——might take advantage of it.

——Monsignor Gogarty.

Even when the minimum wage was one euro above the current level, construction workers were still being displaced by vulnerable and exploited agency and migrant workers. The issue of employers exploiting workers is not a function of the minimum wage per se but, as I said last night, I recognise the potential for unscrupulous employers to advantage of this. The point is that Germany, our paymaster, does not have a minimum wage and countries with which we are more on par, such as Spain and Portugal, have a much lower minimum wage. It is a question of the overall standard and cost of living. If the price of labour is lower than the minimum wage, one must move closer to the point of equilibrium; otherwise employers will not be able to employ. That is the fundamental issue.

I am anxious to make progress.

More jobs could be lost if we did not reduce the minimum wage. Since social welfare rates have been reduced further — we will remember yesterday's debate on this — and since wages have decreased and the standard of living has decreased for everyone, the minimum wage must also be reduced.

Bonuses for bankers have increased.

I agree with the Deputy on that. There are no bonuses now for bankers but a decision on the bonuses of 2008 was made by the courts. Any efforts——

No. The British High Court in London——

This is Committee Stage and Deputies should speak through the Chair.

I do not mind genuine debate and have already put on record that I support any effort by the Minister to try to claw the money back. However, this is——

It is called taxation. This should be achieved today.

On the substantive issue, Ireland will be a more competitive place once again in four or five years because of measures being introduced in this budget. The standard of living will be a little lower, at 2002 levels, and the cost of living will be a lot lower. This will mean our goods and services, as traded, will be more competitive.

Electricity and telephone charges are all higher.

The employment rate will rise once more. The Deputy should look at the consumer price index; that is what I am talking about.

I do not know what planet the Deputy is living on.

I will sum up. Irrespective of the financial interests pervading much of this House in terms of influencing the way decisions are made — I reiterate that the Green Party does not engage in this practice and no one is paying it or having it compromise in any way to make decisions — we have announced we are leaving Government and will do so, but we must get the budget passed. It is our moral duty to do so.

The Deputy should give us a date.

Is it true that——

I ask Deputy Gogarty to conclude his comments.

Let me clarify the matter because the Deputy raised a valid issue. Our party leader, the Minister, Deputy John Gormley, said we would be leaving Government as soon as the Finance Bill is passed. That remains the case.

How long will that take?

I hope it will be as soon as possible because I would relish an election at this stage so the Opposition Members can argue among themselves and come up with a coherent electoral platform.

I support this amendment wholeheartedly.

He will not vote for it.

I ask the Minister to respond to it and ensure that those who are currently working will not be exploited by the measures that I believe, on a very narrow balance, to be necessary to keep this country competitive and ensure jobs continue to be created.

This is Flann O'Brien country. The Deputy will have to ask the Minister for the Environment, Heritage and Local Government, Deputy Gormley, whether he is a man or a bicycle after all these years in government.

Deputy Reilly should be allowed to make his contribution.

What we just witnessed in this Chamber is probably one of the main reasons this country is in the mess it is in. The ability of people on the Government side to stand up and wax lyrical in support of an amendment and vote against it——

Like the Fine Gael spokesperson on employment——

Please, Deputy Gogarty.

It has happened time and again.

I support the amendment and congratulate Deputy Penrose on tabling it. The laws of unforeseen consequence will certainly apply if it is not accepted. The 12% cut in the minimum wage is at the core of this issue. The lowest paid workers in the State will be affected. The bonuses for bankers will be greater than the annual income of those on the minimum wage. The Government has taken money from the lowest paid workers, the blind, the disabled, widows and carers. Each carer saves the State tens of thousands of euro by the care given to his or her loved one in the home, to everyone's benefit. The cut is short-sighted, mean-spirited, cold-hearted and so unnecessary.

The Office of the Ceann Comhairle wrote to the Fine Gael Deputies to tell them their amendment was out of order and that it was "outside the scope of the Bill", yet the name of the Bill is the Financial Emergency Measures in the Public Interest (No. 2) Bill 2010. What public interest is served by omitting this amendment and by paying bonuses to bankers, the money for which bonuses was provided by the taxpayer to support the bank in question? The bank would not have been in a position to pay the money had it not been supported by the taxpayer.

Bonuses are paid in December and not earned until that month. One could be performing wonderfully well until September and make a hames of matters in October and November, and thus be entitled to a bonus.

Bonuses are not earned until December.

The Government brought in the bank guarantee in September 2008. It was a glaring omission not to deal with this issue. That once again highlights the utter incompetence of the Minister for Finance. It is not nice to have to say that about someone but the reality is that this country is in this morass because of the bank guarantee, the manner in which it was implemented, the scope it covered, and a refusal, until it was obvious to everybody, to wind down Anglo Irish Bank. It was eventually done €30 billion, €40 billion or €50 billion later, and the country now finds itself at a crossroads where tough decisions have to be made.

This Government has often prided itself on taking the tough decisions but I have asked time and again why those tough decisions are always tough on the poorest, the most vulnerable, the chronically ill, the disabled, the blind, and now the carers. What moral compass has this Government got? What moral authority has it got? I suggest to the Ministers of State opposite that it has none. It has lost the credibility of the people. It has lost the credibility of the markets, and it has lost the credibility of the international community. It has damaged our country and our reputation.

I want to know how it can be that the Government would not have the political courage to defer these payments until such time as an expert group can be put together, with the best minds in the country, to devise a methodology of ensuring this money does not pass from the taxpayer because it is unjust, wrong and unfair. It infuriates people.

The Government has destroyed our country and our economy, and now it wants to destroy our society because the effect of these sort of measures on blind people, for example, who will lose €8 per week, might be the difference between them being able to feed their guide dog or not doing so. Their ability to go to the shop independently and live some sort of an independent life will be compromised, all to ensure that bankers can have bonuses to cruise the Caribbean at Christmas time. What in the name of God are the Members opposite thinking? How could they possibly preside over that?

In life there are choices. There is law, and sometimes there can be legal niceties and legal difficulties but where there is a will there is a way. That way should be sought and taken. This Government has failed in that regard.

I would remind the Deputy that we have a long list and we are still on the first amendment. It would be great to make progress.

I accept that, a Leas-Cheann Comhairle, but I sat here and listened to some rather long speeches. I will conclude. I do not want to delay the House but I have some serious questions to ask.

First, why is it acceptable for the Government to interfere with the expectations and rights of retired gardaí who put their lives on the line or retired teachers who educated us and future generations? Why is it acceptable to levy a tax on them and to interfere with their expectation, having worked hard all their lives for their pension but it is not acceptable to do it with bonuses for bankers?

I do not understand that.

Second, if the Government refuses to do this and decides to hide behind a technicality of the Dáil to move an amendment to do it, could it please tell the House and tell the people whether these bonuses are to be taxed at the 2008 level, when taxes were lower and levies did not exist, or at the 2010 level? I would appreciate an answer to that question but what I would really appreciate from the Ministers of State opposite is that for once they would legislate in aid of the people instead of always legislating against them.

I fully support the spirit and the principle of Deputy Penrose's amendment regarding those on the minimum wage. Many of the arguments being made by Deputy Burton and the Labour Party, and by Deputy Gogarty, concern the most vulnerable and the weakest section of our society who are effectively being crucified by this Government.

If there is a flaw in the amendment it is that it is trying to protect those who are on contract. The majority of people on the minimum wage are seasonal workers and the majority of them are employed in the hotel sector throughout the summer months. However, the majority of them are now out of contract. This is a cynical exercise because the Government is bringing in this measure knowing full well the majority of people on the minimum wage are not working now. They will be caught by it and will lose €1 an hour as of today.

Deputy Gogarty was obviously prompted by his conscience when he asked the Government to support Deputy Penrose's amendment. I believe one must be always guided by one's conscience and take a principled stand, if necessary, to protect one's conscience.

That is why we voted for the budget.

Society can be judged only on the way——


——it treats the most vulnerable in society. A coalition Government such as we have that is prepared to attack the most vulnerable, irrespective of what one says, is a Government without a social conscience. I know Fianna Fáil supporters, canvassers and so forth and they have always prided themselves on the fact that they have a social conscience but the leadership of Fianna Fáil does not have a social conscience. Unfortunately, the Green Party has been compromised by the lack of a social conscience in this Government.

The minimum wage affects non-nationals. As Deputy Burton said, it affects women more than men. It will effectively take more than €40 a week out of the pockets of people on the minimum wage, and the Government is doing that on the pretext that it is to sustain the economy and to create growth and jobs.

The reality is that people on the minimum wage, low income families and those whom I would call the working poor spend every cent they make in local economies. How can the Government make an argument for creating growth when effectively it is creating unemployment? That is what this Government is doing by attacking the most vulnerable.

Members of this House earn more than €90,000 a year. Not one cent has been taken off our wages. Not one cent has been taken off the wages of Ministers of State, yet the poor misfortunate woman or man who was on €8.56 an hour now finds himself or herself down €40 a week. Those people are dependent on the minimum wage to feed their children, to put petrol in their cars to get to work, to put food on the table and to clothe their children. That is what this Government has done.

This Government does not have a social conscience. I am looking at the officials opposite and I have no doubt many officials are highly embarrassed by the political direction this Government is taking. They are——

It is not appropriate to draw officials into the debate.

Effectively, the Government is expanding the working poor. The working poor is becoming the fastest growing sector in society and in the economy. The Government has no moral mandate to do what it is doing. It is disgraceful. I do not know how the Ministers of State can sit there and try to justify it.

I look to Deputy Gogarty, who has a conscience. He should be guided by his conscience.

Do not allow this. Deputy Gogarty should be guided by his conscience.

I am making sure people have dole in three months' time. We cannot wait until three months and do nothing in the meantime.

Is Deputy Gogarty following all that?

I have a conscience.

He is following all that.

If Deputy Gogarty is coming in here and is prepared to take the Whip to penalise the poor and those on the minimum wage, he should be guided by his conscience——

I am being guided by my conscience.

——and be a man of principle.

Not the Whip, Deputy Gogarty's conscience.

I call Deputy Shatter.

I am guided by my conscience.

Good man, Deputy Gogarty.

I am always guided by my conscience, otherwise I would not still be in the Green Party.

Good man, Deputy Gogarty.

Deputy Shatter without interruption.

Like colleagues, I rise to support this amendment. It is important that those who are currently benefiting from the existing protection with the minimum wage as it is today pending the enactment of this Bill, should not be put under pressure and should not find themselves unemployed in circumstances in which they do not agree to a reduction based on the legislation that is today before the House.

In a moment I want to contrast the Government position on this issue with its position on a related issue that is of relevance to this legislation, but I want, momentarily, despite the fact it is a distraction, make reference to Deputy Gogarty's contribution. It is important at times of great economic difficulty, when the public is under pressure and when there is much misery in people's lives, that someone plays the role of national comedian and, generally, gives people the opportunity for a laugh. It is just a pity that they should choose to use this Chamber as the theatre in which to express themselves.

As Jarvis Cocker might say, I do not see anyone else laughing in here.

Deputy Gogarty amply fulfils the role of national comedian. The tragedy is that it is the judgment of persons like Deputy Gogarty that has resulted in the catastrophic economic collapse of the State.

I make a recommendation to Deputy Gogarty. It is that after the election has taken its course and the people have made the judgment that I expect them to make on him and his party, and as I have no wish to see him unemployed, Cirque du Soleil, a successful organisation that provides a great deal of entertainment, no doubt could make use of his talents. I would suggest to him that he send his CV to that company in advance of the election being called for fear that an important opportunity that might be available to him might be taken up by someone else.

I want to deal with one issue of relevance to this amendment and to where we are heading. The proposed amendment seeks to protect current workers in receipt of the minimum wage. This legislation makes provision not only for changing the minimum wage, but for various reductions also in public sector wages across the board. Of course, it excludes the variety of State agencies that are detailed in the Schedule. That is something else that needs to be addressed but, I appreciate, if I went into that at this moment, I would be going outside the amendment with which we are dealing. However, I want to make a contrast with regard to those on the minimum wage, the Government's opposition to this amendment, including the way in which Deputy Gogarty will vote, and another matter.

I should say to Deputy Gogarty, in case I forget to do so, that if he is really in favour of this and if his conscience is such that he wants to support it, there are some of us who are Members of this House who on occasions have had the courage to vote with our conscience. I well recall in the early 1990s in this House, at a time when it was a matter of some controversy, supporting legislation to ban live hare coursing in circumstances in which my party was not voting along those lines. Let nobody outside this House think that Deputies are merely little political automatons who have no choice but to obey orders and follow the Whip.

Follow the logic of Deputy Shatter's argument.

The strange thing is, and it may come as a revelation to Deputy Gogarty, each Deputy in each party in this House is an individual with a conscience and with a capacity to think, and who has the capacity to make choices as to which way he or she should vote. You have that capacity, Deputy Gogarty,——

Through the Chair.

——and do not pretend otherwise.

If Deputy Shatter votes for an amendment and the amendment is passed all the same,——

Please, Deputy Gogarty.

This presentation of saying one thing——

——then it comes to the final legislation.

——and doing the opposite.

I ask Deputy Shatter to yield for a second. Deputy Gogarty, it is not our practice to shout Members down in the House.

It is good craic.

If Deputy Gogarty proceeds with doing that, I will ask him to leave.

I just asked Deputy Shatter to elaborate on the question of voting against the amendment.

As I stated, Deputy Gogarty will not shout Members down. I call Deputy Shatter.

Deputy Gogarty should come over here to the technical group and he will get a proper slot.

This capacity that Members in Fianna Fáil have had in the more than 20 years I have been a Member of this House to say one thing and vote in the opposite direction is a capacity now that, apparently, has been transferred by some form of political osmosis into the Green consciousness.

Only towards the overall legislation, in case Deputy Shatter did not realise.

Just as Deputy Gogarty can express support for this and vote the other way, it is the mirror image of what his colleagues in Cabinet are doing. They are calling for a general election while hanging on with their fingernails to being members of Cabinet and participating in discussions while also seeking to dissolve themselves from collective responsibility for any decision made by Cabinet.

That has yet to be proven.

It is an interesting political high-wire routine. It is the type of politics that totally undermines the credibility of Members of this House. It is the type of politics that we look at from this side with despair because all too frequently the public thinks that we are as bad as the lot opposite us——

What was Deputy Shatter's view on stag hunting?

——when there is no valid comparison that can be made.

Deputy Shatter supported it.

Deputy Gogarty, please do not shout down Members. If you persist, I will ask you to leave.

I want to deal with one issue only and I will try to deal with it with some brevity. This legislation, based on the State being confronted by a financial emergency, seeks to bring about public sector wage decreases that affect the public sector across the board in a broad range of areas. In the context of dealing with the pension issue, there are also deductions for former public sector employees who are now retired, including pensions payable to members of the Judiciary.

The big gap here is the type of protection that we would like to apply to those on the minimum wage but which applies in spades to members of the Judiciary. The members of the Judiciary have not been affected by any of the public sector wage decreases that have occurred. Even when it came to the pension levy, they were excluded from it, although as a result of public comment and pressure, the vast majority have now opted into that.

There is now a major difficulty in this area, one that I predicted when, on behalf of the Fine Gael Party, I published, in November 2009, the Twenty-ninth Amendment of the Constitution Bill. That Bill contained a provision to facilitate a constitutional referendum being held so as to ensure if there was a general deduction in public sector wages——

Deputy Shatter has gone well beyond the terms of the current amendment.

There is a comparison here which I am going to make, and I will be brief on this.

I thank Deputy Shatter.

The Bill made provision that if there was a general deduction in public sector wages because of the State suffering a financial emergency, those deductions should apply to members of the Judiciary. There was a simple amendment that I sought to be included in the Constitution, and it reads as follows:

The remuneration of a judge shall not be reduced during his continuance in office save where it is necessary to address a serious threat to the State's economy, there is a compelling need to stabilise the State's finances and as a consequence it is necessary to effect a reduction in public service remuneration; in such circumstances any reduction in the remuneration of all public servants or in the remuneration of a class of public servants may be applied to effect a comparable reduction in the remuneration of all members of the Judiciary.

I believe that to maintain public confidence in the Judiciary, it is important it is seen to be part of, not an elite set apart from, the community.

If the Government is prepared to address the issue of the minimum wage and to reduce it, I call on it to accept this Private Members' Bill, to allow for its urgent enactment before the general election occurs and to allow a referendum to take place to coincide with the general election to facilitate a reduction in judicial salaries that is commensurate with the reduction in other public service salaries.

So far, the Government has been opposed to this provision. There is no logical reason it should be opposed to it. I believe the general public would support it. It is not about singling out or discriminating against or trying to undermine the Judiciary. It is trying to ensure that the public retains its respect for the Judiciary and that members of the Judiciary make the same contribution at a time of public urgency as the rest of the community has been called upon to make. It is completely unacceptable that the Government is willing to tackle this issue but proposes to vote down this amendment, which seeks to protect the very minimal income currently received by those employed who only have available to them the minimum wage. There is an extraordinary contrast to this and when he replies I ask the Minister of State to give a commitment from the Government to support the enactment of this Private Members' Bill so that a referendum on judicial salaries coincides with the next general election.

I call Deputy Róisín Shortall. I advise the House that a number of other Deputies wish to speak. These are Deputies Doherty, Varadkar and Barrett.

Before speaking on the amendment, I wish to make a point about the budget which I believe is important. On budget night, it is a tradition that the Departments of Social Protection and Finance produce fact sheets on the budget. All of the politics is contained in the budget speech of the Minister for Finance and then we receive the fact sheets and find out what exactly is the situation. I must state that what is supposed to be a fact sheet, which we received on Tuesday night from the Department of Finance, is a disgrace. No longer is it a fact sheet, it is a piece of propaganda. It is political propaganda. This is a really retrograde step by the Department of Finance. It is important to point out lest anybody is under the wrong impression that Fianna Fáil is not the State; there is a difference between the State and Fianna Fáil and everybody needs to be clear about this, particularly our public servants. The Department of Finance needs to be clear that there is a difference between Fianna Fáil and the State. If we are promised a fact sheet——

I ask the Deputy to speak to the amendment.

——it should be a fact sheet and it should not contain propaganda such as stating that the State cannot afford the current level of social provision. This is a political statement.

Not with the €20 billion deficit, it is not.

It is not a statement of fact; it is a political statement. It also states that taxpayers must contribute according to their means so those who can pay most will pay most. Again, this is a political statement. It is propaganda. It is entirely untrue, by the way, in respect of the budget. It is propaganda, and we should not be getting this type of propaganda from the Department of Finance. As far as I am concerned, this issue will need to be addressed at the earliest possible stage by the new Government.

I want to speak about the approach taken in the budget and the issues under discussion in respect of the amendment. The approach taken in the budget has been about making cuts in the economy which in our view will do serious damage. The scale of the cuts and their severity on those who can least afford to take them will be extraordinarily damaging and dangerous to this economy. It is not only the Labour Party which is stating this. Yesterday, the ratings agency Fitch was the first to strip Ireland of its A credit status and this was principally to do with the huge level of bank debt attaching to the Irish State. It also warned that the budget cuts might choke the Irish economy rather than reviving it and this is the big fear. This is what the Labour Party has been warning about; that these cuts would choke the economy and do long-term deep damage to it. It is of great concern that one of the international ratings agencies should be of the same view. This is the danger and this is what we face in the coming months.

The amendment relates to the cut in the minimum wage. It is important to point out that at present people working 40 hours a week on the minimum wage earn €346. Under the arrangements to cut the minimum wage they will lose €40 of this, reducing their pay to €306 for a 40-hour week. Under the other budget provision which will prove to be a ticking timebomb, namely, the universal social charge or rather the universal antisocial charge, a person working a 40-hour week on the minimum wage will lose €8.42 through tax. The Minister for Finance told us the reduced minimum wage would not be in the tax net. We know now that this statement is completely untrue. The Department of Finance has stated the universal social charge is a tax; this statement is in the budget book.

It is in a resolution.

People on the reduced level of minimum wage will be brought into the tax net and they will pay €8.42 in tax.

This means a person going out to work for 40 hours a week will take home less than €300. I do not know whether Deputy Gogarty is aware of this; probably not, given the other universe in which the Green Party tends to live. Can anybody in the House imagine what it is like to work for 40 hours a week and take home €297 for his or her trouble? Who in this House could survive on €297 a week, particularly after working for 40 hours? This is a scandal; the Government is now stating that the poor are fair game and that it is okay for somebody to work 40 hours a week and take home €297. Can anybody imagine the indignity of this? People must go out and work 40 hours, probably taking 50 hours out of their week, in what is probably a fairly menial job to come out with this type of money. What has this country come to that we are telling people it is okay to treat them like this? It beggars belief that those in government, who have been swanning around for the past 13 years in their Mercedes oblivious to what is going on in the real world, can say to people that it is okay for them to cut their pay so that after working for 40 hours they will receive €297. It shows how totally out of touch Fianna Fáil has become from people who live in the real world. Of course this is directed at non-nationals, women and young people. To suggest this will not have a knock-on impact on pay or on people working for the existing minimum wage is absolute nonsense. The Government is giving the lead and stating to employers that the poorest people in our society are fair game, that the Government has hammered them and will not stop anyone else from doing so.

I wish to allow others to speak also.

This is precisely the purpose of the amendment. We want to copper-fasten the minimum protection which low-paid workers have at present. We also want to ensure those on low incomes are protected and cannot be abused further. There is no question of this being an issue in the context of competitiveness, a lie which has been peddled in recent times. The average wage in Ireland is €22 per hour and employers are recruiting at that average level. Therefore, the minimum wage has nothing to do with competitiveness. In the budgetary context, cutting the minimum wage will make no difference to Exchequer finances. There will be no savings as a result.

The approach taken with regard to the minimum wage is a complete lie, like so many other aspects of the budget. I hope backbenchers here, the Green Party and those three amigos at the back, the Ballymagash politicians, Deputies Jackie Healy-Rae, Michael Lowry and Joe Behan, people who bring this House into total disrepute, realise what this budget will do to their constituents and I hope their constituents will act accordingly.

I now call Deputy Doherty. Deputies Varadkar, Barrett and Creed are still waiting to speak and I would be obliged if we also had time to allow the Minister to respond.

Ní ghlacfaidh mise barraíocht ama mar tá cuid mhór ráite ag mo chomhghleacaithe, na Teachtaí Arthur Morgan agus Martin Ferris, cheana féin.

I support this amendment. The spirit of the amendment is to protect those already in existing contracts. It has been spelled out that many of that 52,000 would not be able to avail of that protection even if the amendment was accepted. While Sinn Féin opposes section 13 in its entirety, we recognise, given what has been said here today by the likes of Deputy Paul Gogarty, that regardless of what such Members believe or how morally corrupt this measure is, they will still vote with the Government and vote this through.

The Deputy is measuring moral corruption. Let us have the economic argument rather than try to raise populist indignation.

It was Deputy Gogarty who started talking about morals.

Yes, it was also——

It was he who was asking for forgiveness. It is morally corrupt.

Please, we will not have a shouting match across this national Parliament.

The Deputy was saying we were corrupt.

The measure is morally corrupt.

The Deputy is making a political contribution on an amendment. Please allow him to do so.

I am sure he is sorry he spoke of this document——

I am speaking of the measure in this Bill. As we know, the Bill does not just deal with the reduction of €1 in the minimum wage, but the measure in the Bill is morally corrupt. Since the two Ministers of State came into this Chamber two hours ago, they have earned half of what those on the minimum wage will earn in a full week, but not one cent will come from their gross salary as a result of the measures in the Bill. Some €140,000 gross is protected for Ministers of State. This is scandalous and that is why Sinn Féin has put forward amendments, on which we will hopefully have a chance to vote, which would seriously reduce their payments and ensure that those on the minimum wage are protected. Therefore, the measure is morally corrupt. It is not just a reduction of €1 in the minimum wage but, as has been said by others, it also brings those on the minimum wage into the tax band through the universal social charge.

On the night of the budget I spoke with regard to what the universal social charge will do and how it will penalise low paid workers. We are seeing that now in the case of those who earn the minimum wage. I also pointed out that the universal social charge will benefit high earner workers. We know that now because the dirty details have come out that the self-employed and those in band D of the tax net, or anyone earning over €200,000 will benefit as a result of this measure. The millionaire, self-employed person, as a result of the budget and the changes in the taxation measures, will earn a net extra €23,000, yet Deputy Gogarty has come in here and expects Deputies to vote for a reduction in the minimum wage of €1 that will bring the lower paid into the tax band and reduce their wages, after 40 working hours, to under €300. If Deputy Gogarty does not think that is morally corrupt, we might need to have a discussion about his morals all over again.

It is about job creation. We should discuss Deputy Doherty's morals and those of his party.

Please Deputy Gogarty, allow the Deputy continue.

We need a new type of politics. The idea that a Deputy would say he supports the amendment but will not vote for it is ridiculous. Deputy Gogarty is bringing the House into disrepute. That is why people do not trust politicians. We have heard the Deputy say he agrees with the amendment, but will not support it. He said my paymasters are the unions, but his paymaster is the Government Chief Whip. The Deputy talks about being challenged by two morals. The morals on which he is challenged are whether to keep 15 Ministers' bums in their seats for another couple of months or try to protect the most vulnerable in Irish society. That is not a challenge. It should not be a challenge for anybody who claims to have any type of moral.

I will not vote for the amendment when the country is in crisis.

Deputy Gogarty must control himself or leave the House.

I am quite in control, believe you me.

The Deputy should not shout Members down.

He will not shout Deputy Doherty down.

It should not be a challenge for anybody to decide between those two "evils" as the Deputy called them. They are not evil. One is about standing up for the weakest in society and the other is about protecting the most vulnerable.

If one has no dole and no wage at all——

One of them is also about growing our economy, because if we do not reduce the wages of the lowest income earners in society, we will ensure there is more money in the real economy, more money to spend on businesses and more money to spend in local shops and retail units etc. That is what it is about.

They will be like people in Romania or Bulgaria instead.

Deputy Gogarty, I will not tolerate a shouting match in the House. Please have some respect for the national Parliament of this country.

Finally, as I mentioned previously on the budget, there is a challenge for all of us. We will face a general election shortly and despite the introduction of this measure, which is one of the worst measures the Government is introducing, I have not yet heard a clear commitment in the Chamber that any party in a position to form the next Government will immediately introduce legislation that will reverse this cut to the minimum wage. I put that challenge down to all parties, including the Green Party, the Labour Party and Fine Gael, because Sinn Féin is committed to that and to reversing the other measures that were introduced in the social welfare budget.

The Deputy has not been listening to us.

On a point of order, I would like to say I wish this was a national Parliament and I look forward to the day when it will be.

That is not a point of order.

I support this amendment. In many ways, this issue speaks to the values of our society and the values by which we want our economy to operate. One of the basic values of our society must be that work pays. If we want a capitalist economy and society, we must also have social justice and a system in which work pays. If this measure is introduced, work will no longer pay for many of the people now at work in low paid jobs.

Many untruths have been uttered about the minimum wage in the course of this debate. The minimum wage applies to a very small number of people, perhaps 4% of the workforce. These are generally people who work very hard for very little money, domestic workers, cleaners and people such as those who work in petrol stations. There is a misconception that we have the second highest minimum wage in Europe. That is not true. Nominally we are third, but in many countries where there is no national minimum wage, like Germany and the Nordic countries which have sectoral minimum wages, those minimum wages by and large are far higher. It is also worth noting that in all those countries where there is a higher minimum wage, unemployment is lower. Therefore, the suggestion that there is some sort of direct correlation between the minimum wage and levels of employment does not pass muster.

We must also compare the justice of this measure. A previous speaker pointed out that there has been no nominal cut in Deputies' pay in this budget, which is true, but between the PRSI and other measures, there is a 9% cut. However, that cut is less than the 12% cut proposed in the minimum wage today. The overall cut has been 25% but that was spread over three years, whereas this measure makes a cut of 12% in one fell swoop. It is unjust.

Previous contributors, including Deputy Noonan, have noted the budget's other unjust measures. Many self-employed people earning high salaries will gain from this budget. I accept this is the result of correcting an anomaly whereby self-employed people paid 56% tax compared to the 52% or 53% paid by employees. I understand why it was considered unfair to tax self-employed people more than those in employment but, in terms of politically proofing the budget, the Government could have waited for another day before correcting the anomaly. High earning self-employed people would have tolerated their income tax rates being frozen rather than cut in a budget that also reduces the minimum wage.

It is remarkable that the Government is using financial emergency legislation to cut the pay of private sector workers but it will not use similar means to cut the pay of bank or semi-State company employees who received pay increases over the past two years. How can the Government justify increases of 3% and more to workers in semi-State companies and the banks when it uses emergency legislation to cut the minimum wage?

No other country has ever reduced the minimum wage. The leaders who people like to suggest are bêtes noires, such as Reagan and Thatcher, did not cut the minimum wage. This will be the first Government in the history of the world to reduce the minimum wage, with the possible exception of Pinochet’s Chile. Other than a small number of business organisations, nobody asked the Government to make this cut. In effect it is taking the easy decision while leaving the next Government to address the more complicated and important task of reforming the registered employment agreement rates, which are much higher and include numerous restrictive conditions.

This Government clearly lost its sense of fairness when it drafted this budget. In a week when people who earn small weekly incomes are facing further cuts, it was announced that €40 million is to be paid out in bonuses to bank staff. Does anybody in the Government understand how this contrast resonates with the public? Widows, blind people and carers are told they must accept cuts. In ignoring fairness, this Parliament is losing the people. They believe we do not care about them. The Government must not have been thinking when it framed this budget.

Why are we imposing these cuts? The Irish people did not cause our problems. Over the past 13 years, our financial institutions drove us into bankruptcy through their irresponsible actions. It was not the fault of the ordinary person. We would not be in this mess but for our banking system and the manner in which our Government dealt with it. That is why the minimum wage is being cut and these hard measures are being introduced. We would not need this budget if the banking crisis had not arisen. In the same week as these hard measures are imposed on the people, it was announced that €40 million is being paid out by a bankrupt financial institution.

There is a danger that we will become a begrudging society. The events that took place in London yesterday could have occurred outside the gates of these Houses if we were not fortunate enough to have snow and ice on our streets.

We did not triple fees.

I ask the Deputy to mind his own business for a while. We need to cop on to ourselves because we are on the edge. I am amazed by the telephone calls I receive from people who want to know why they are required to pay when banks are getting away with it. These are not uneducated people. They are the so-called top people in our society. It does not sound fair because it is not fair. We must reject this proposal if only for the sake of sending a message of fairness.

The Government cannot legitimately cut the minimum wage by €1 in the same week that people are being paid bonuses. I do not know whether the bank staff in question are paid on commission but it is crazy that a banking system would pay bonuses for increasing loan volumes. Any other business pays bonuses when it makes a profit. For these reasons, I fully support the amendment and ask that we restore a sense of fairness to our society.

Four Deputies have asked to contribute and, with the permission of the House, I will call the Minister to reply at 12.55 p.m. I ask, therefore, that the remaining speakers be brief.

In deference to the time constraints, I will be brief. Fairness and national solidarity are critical to getting us out of our mire. However, these measures are being introduced in a pressure cooker atmosphere whereby Members are not allowed time to reflect on their implications. Yesterday Deputy Noonan pointed out that self-employed people who earn more than €200,000 will be substantial net beneficiaries of the universal social charge and other budgetary changes. I am sure that was not the Minister for Finance's original intention but it was a mistake which will benefit high earners at the expense of those who earn the minimum wage. Somebody who earns €200,000 will probably gain €20,000, which is more than can be earned on the minimum wage in one year. That is fundamentally unfair at a time when the State is using the money it saves to pay bankers' bonuses. These measures are generating an unprecedented level of social unrest.

Cuts in welfare generally affect the most vulnerable members of society. Yesterday I spoke at length about the unemployed people with children who are the new poor. Bringing people on minimum wage into the tax net exacerbates that trend. We need an enterprise society that values work but we are instead demeaning work and encouraging fraud. If we had more time for reflection we would construct a better Bill.

In regard to the bonuses paid to bank employees, if the Irish taxpayer had not given the guarantee it is likely AIB would no longer exist. Bonuses are being paid because of the Minister for Finance's lack of negotiating skills at the time the guarantee was put in place.

As people on the minimum wage invariably work in short-term employment and move from job to job, they are likely to be hit by the new rate before too long. An individual earning the current minimum wage will pay an income levy of €360, whereas he or she would pay €436 per year into the universal social charge if he or she earned the new minimum wage. The Minister clearly did not think through that flaw. Weekly take home pay for the minimum wage will decrease from €339.08 to €297.62. There is a fundamental flaw if an individual must pay more tax even though his or her income has decreased.

When we are looking for an enterprise culture, we are concerned with the cost to the employer. Many small employers are under pressure. The Minister could have taken away employer's PRSI at the lower rate, which would affect people on the minimum wage and save €30 per week for the employer. This method saves €43 but many people will not be able to take up employment. I ask the Minister to examine this and make changes. It is fundamentally flawed and unfair.

The Government has the votes to carry this Bill. The amendment before the House, in the name of Deputy Penrose, merely seeks to ensure the cost of €1 in the national minimum wage does not apply to existing workers. I cannot see why the Minister cannot take that on board. We know what will happen in the real world. Many of these workers are casual workers and are occasionally let go and re-employed on new contracts. We know what the impact will be. Any Government would have to make Exchequer savings in these circumstances, different Governments would make different choices. This does not make any savings for the Exchequer and it will inevitably mean many workers who were previously ineligible for the family income supplement will be eligible for it. Some six out of ten of the 52,000 workers concerned are women. The Minister has the votes to carry the Bill and if he wishes to do some, that is his prerogative. I ask him to accept the amendments to ring-fence wages so that none of the existing workers is affected.

I do not like referring to Deputy Paul Gogarty as he only keeps interrupting because he wants attention. He threw around allegations about the venal conduct of Deputies on all sides of the House. I cannot think of anything more morally bankrupt, if not corrupt, than to say that he agrees with the amendment but will be voting against it. That is a new rule in this House.

I speak in support of this amendment and to oppose the Minister's intention to reduce the minimum wage by €1. The main reason is that it does not make sense on any grounds. The reasoning behind this came from an economist somewhere who said that Ireland needs to reduce the cost of employing people as a way of encouraging employers to take on more employees. The problem is that we need to encourage people on welfare to actively find employment of all sorts, including low paid employment, hopefully as a stepping stone to higher income. If we are taking such an aggressive cut in the minimum wage, I do not see an incentive to encourage tens of thousands of people on social welfare to find reasonably paid employment that will pay them considerably more than what they would be paid on welfare. This is in the context of protecting wage rates across the public sector in the Croke Park agreement yet at the same time we are targeting working people on the lowest income in the country. By and large they are in the private sector and they are being targeted by a taxation measure, the universal social charge, as well as lowering their gross pay. It is not incentivising many very low paid people, who will face reductions in salary. I do not accept the Minister's explanation that people are on contracts and the contract is protected. Those on the minimum wage do not have rock-solid contracts. They were part-time and their contracts are replaced on a regular basis. By and large, these contracts are loose arrangements that will convert into a new arrangement at €7.65 an hour rather than €8.65 an hour. I appeal to the Government to reconsider. In the context of this amendment in particular, I appeal to the minority party in Government to take a stand.

I will respond to this amendment because of the number of issues and concerns about workers rights that have been raised. I appreciate the objective of Deputy Penrose and all other Deputies. The legal advice available to all of us, and confirmed to everyone in the House, is that an employee working under a contract of employment setting wages at or above the national minimum wage is already entitled under that contract to continue to be paid that wage unless the terms of the contract are altered by agreement between both the employer and employee.

What power does the employee have?

If the amendment is accepted, it is likely——

Deputy Calleary should tell a cleaning woman she can go to the High Court judge.

I listened for two hours.

The Minister of State has limited time. The Minister of State must be allowed to speak. Let us hear it.

On a point of order, can I ask the Minister of State to clarify——

Can I say to Deputy Doherty——

——if the advice came from the same source that said the Donegal South-West by-election did not need to be held?

The Deputy will not ignore the Chair. He is new to the House so when the Chair stands, Deputy Doherty should take his seat. We have limited time and I would like to hear the answers from the Minister of State. I ask Deputies to forbear to allow the Minister of State to speak and be heard.

We have advice from many sources that if the amendment is accepted, it is likely it would render unenforceable existing contractual terms that provide for rates of pay to be determined by reference to the prevailing national minimum wage. There is a range of legislation available to an organisation that is subject to more criticism than praise in this House. I refer to NERA, the National Employment Rights Authority. This is not an obsolete or remote organisation, as one Deputy commented last night. It is very active on the ground protecting employee rights. With regard to workers' contracts referred to by Deputies, staff of the Rights Commissioner Service are experienced and available to handle issues where workers are not getting their rights, which include a written contract regardless of who they work for or how they work. Under the Croke Park agreement, we are making arrangements for greater supports for the employer support organisations such as the Rights Commissioner Service and the Labour Relations Commission so they can be better placed to respond to the increasing volume of cases, particularly from this sector over the past year. There has been a far greater increase in the volume of complaints to the Rights Commissioner Service from this area.

Deputy Burton referred to section 13, which concerns a linked amendment, and the wording of the review and the requirement to examine the cost of living instead of inflation. There is no policy change here.

There is a big policy change——

The cost of living is included——

——because the cost of living provides for deflation.

——in the same way in the listing and is not there as a priority but as one of a series of factors to be taken into account. Deputy Penrose raised concerns that we are eliminating the Labour Court from the review function. The Labour Court is centrally involved in the review function. If the review function is initiated by IBEC or ICTU, the Labour Court will do so within 13 weeks. Under the 2000 Act, there was no limit on the consultation period. A review could be sought and then withdrawn and no progress was made. Under this new legislation, the review will be carried out within 13 weeks. This brings certainty and efficiency to the issue.

Deputy Shortall commented on the factsheet and I have been asked by the officials to clarify this point. The document was approved by the Minister and reflects Government decisions on budgetary measures. It is not an official Department of Finance document.

It is important to put this on the record.

It normally contains facts rather than political propaganda.

I refer Deputy Shortall to the Department of Social Protection document, which was issued in the traditional format on Tuesday night with just facts. That document is still available to provide information.

The Department of Finance document has changed. That is the point I am making.

This is the Fianna Fáil Christmas leaflet masquerading as a document from the Department of Finance.

The House should note that the National Employment Rights Authority is available, resourced and staffed. The Rights Commissioner is being provided with extra resources in order to supply workers in this area.

It is 1 p.m. I remind the House we are still on Committee Stage. Deputy Kenny wishes to make a very brief comment.

I am conscious it is 1 p.m. and that if the Minister stands up I will not be permitted to raise this point or order. I ask him to comment on reports that because of the decision taken by the Fianna Fáil parliamentary party to put the vote on the IMF-ECB agreement to a vote of the Dáil next week, that the IMF has now deferred its own executive board decision on the agreement originally expected to take place tomorrow. This is causing serious international concern. I ask the Minister to confirm whether the Government has had any discussions with the IMF about this matter. What are the implications for the agreement if the vote is lost?

This is not relevant, unfortunately, to the debate. I ask the Minister to make a very brief intervention and if not I must put the question in accordance with the order of the Dáil.

I thank the Leas-Cheann Comhairle. I wanted to raise the question before the Minister stood up.

There is no decision of the Fianna Fáil parliamentary party. The Government has decided to submit the general arrangements to political approval next week in the House.

I must put the question.


Please, Deputy Dermot Ahern and Deputy Morgan, I am putting a question to the House.

I was being provoked.

As it is now 1 p.m. I am required to put the following question in accordance with the order of the Dáil of this day.

Question put: "That in respect of each of the sections undisposed of, the section is hereby agreed in Committee, that Schedule 1, the Preamble and the Title are hereby agreed to in Committee, the Bill is accordingly reported to the House without amendment, that Fourth Stage is hereby completed and the Bill is hereby passed."
The Dáil divided: Tá, 79; Níl, 74.

  • Ahern, Bertie.
  • Ahern, Dermot.
  • Ahern, Michael.
  • Ahern, Noel.
  • Andrews, Barry.
  • Andrews, Chris.
  • Ardagh, Seán.
  • Aylward, Bobby.
  • Behan, Joe.
  • Blaney, Niall.
  • Brady, Áine.
  • Brady, Cyprian.
  • Brady, Johnny.
  • Browne, John.
  • Byrne, Thomas.
  • Calleary, Dara.
  • Carey, Pat.
  • Collins, Niall.
  • Conlon, Margaret.
  • Connick, Seán.
  • Coughlan, Mary.
  • Cowen, Brian.
  • Cregan, John.
  • Curran, John.
  • Dempsey, Noel.
  • Devins, Jimmy.
  • Dooley, Timmy.
  • Fahey, Frank.
  • Finneran, Michael.
  • Fitzpatrick, Michael.
  • Fleming, Seán.
  • Flynn, Beverley.
  • Gogarty, Paul.
  • Gormley, John.
  • Hanafin, Mary.
  • Harney, Mary.
  • Haughey, Seán.
  • Healy-Rae, Jackie.
  • Hoctor, Máire.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Kenneally, Brendan.
  • Kennedy, Michael.
  • Killeen, Tony.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • Lowry, Michael.
  • McEllistrim, Thomas.
  • McGrath, Michael.
  • McGuinness, John.
  • Mansergh, Martin.
  • Moloney, John.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M.J.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • O’Brien, Darragh.
  • O’Connor, Charlie.
  • O’Dea, Willie.
  • O’Donoghue, John.
  • O’Flynn, Noel.
  • O’Hanlon, Rory.
  • O’Keeffe, Batt.
  • O’Keeffe, Edward.
  • O’Rourke, Mary.
  • Power, Peter.
  • Power, Seán.
  • Roche, Dick.
  • Ryan, Eamon.
  • Sargent, Trevor.
  • Scanlon, Eamon.
  • Smith, Brendan.
  • Treacy, Noel.
  • Wallace, Mary.
  • White, Mary Alexandra.
  • Woods, Michael.


  • Allen, Bernard.
  • Bannon, James.
  • Barrett, Seán.
  • Breen, Pat.
  • Broughan, Thomas P.
  • Bruton, Richard.
  • Burke, Ulick.
  • Burton, Joan.
  • Byrne, Catherine.
  • Carey, Joe.
  • Connaughton, Paul.
  • Coonan, Noel J.
  • Costello, Joe.
  • Coveney, Simon.
  • Crawford, Seymour.
  • Creed, Michael.
  • Creighton, Lucinda.
  • D’Arcy, Michael.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Doherty, Pearse.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Feighan, Frank.
  • Ferris, Martin.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Gilmore, Eamon.
  • Grealish, Noel.
  • Hayes, Brian.
  • Hayes, Tom.
  • Higgins, Michael D.
  • Hogan, Phil.
  • Howlin, Brendan.
  • Kehoe, Paul.
  • Kenny, Enda.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • McCormack, Pádraic.
  • McEntee, Shane.
  • McGinley, Dinny.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McHugh, Joe.
  • Mitchell, Olivia.
  • Morgan, Arthur.
  • Naughten, Denis.
  • Neville, Dan.
  • Noonan, Michael.
  • Ó Caoláin, Caoimhghín.
  • Ó Snodaigh, Aengus.
  • O’Donnell, Kieran.
  • O’Dowd, Fergus.
  • O’Mahony, John.
  • O’Shea, Brian.
  • O’Sullivan, Jan.
  • O’Sullivan, Maureen.
  • Penrose, Willie.
  • Perry, John.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Reilly, James.
  • Ring, Michael.
  • Shatter, Alan.
  • Sheahan, Tom.
  • Sherlock, Seán.
  • Shortall, Róisín.
  • Stagg, Emmet.
  • Timmins, Billy.
  • Tuffy, Joanna.
  • Upton, Mary.
  • Varadkar, Leo.
  • Wall, Jack.
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
Question declared carried.