Vol. 738 No. 4
1 Deputy Sean Fleming asked the Minister for Public Expenditure and Reform the numbers, categories and positions of staff and personnel in the civil and wider public service who are above the salary cap figure and to whom the salary cap does not apply. [20285/11]
The Government has agreed with my proposal for the introduction of a general pay ceiling of €200,000 for future appointments to higher positions across the public service and a general pay ceiling of €250,000 for future appointments to CEO posts within commercial State bodies. I proposed this pay ceiling in the light of the decision taken by the Government on its first day in office to reduce the salary of the Taoiseach to €200,000 and apply a pro rata reduction to other members of the Government.
Arrangements are being made on an administrative basis to implement the pay ceiling for future appointments where that is appropriate, for example, within the Civil Service and for the heads of the four universities. Amending the salary rate for future appointments to certain statutory offices such as the Presidency, the Judiciary and the Ombudsman requires amendments to be made to the relevant legislation. I will shortly be bringing forward proposals to the Oireachtas to bring these within the pay ceilings. That legislation will also formally provide for the reduction in the salary already accepted voluntarily by members of the Government.
Based on the information available within my Department, there are 28 post holders in the public service who are paid more than the proposed pay ceiling, as well as 45 members of the Judiciary and a number of hospital consultants. There are nine chief executive officers in the commercial semi-State sector who are paid more than €250,000.
The Government gave detailed consideration to the potential legal, commercial and contractual issues arising from the imposition of an immediate reduction of salaries on current incumbents whose salaries are in excess of the proposed salary ceilings. The Government decided to seek, in the first instance, voluntary waivers of salary of 15%, or a lesser amount where the application of the full reduction would bring the salary levels of such individuals below the proposed pay ceiling.
Additional information not given on the floor of the House
I welcome the early offer by 12 Secretaries General in the Civil Service whose pay rates were above the pay ceiling to complete a further voluntary waiver to bring their salaries in line with the ceiling. The necessary arrangements are being put in place by my Department for the other post holders concerned to complete the necessary waivers.
The salaries of 45 members of the Judiciary exceed the pay ceiling of €200,000. The salary of the President is set under statute at 10% higher than the salary rate for the Chief Justice. The Constitution affords protection to the remuneration of the serving President and of serving members of the Judiciary. It should be acknowledged that the President and many members of the Judiciary have made voluntary waivers of part of their current salary. The Government has approved the holding of a referendum in regard to the constitutional protection afforded to the remuneration of the Judiciary which will, if passed, facilitate the reduction of remuneration for current members. This matter is being pursued by my colleague, the Minister for Justice and Equality, Deputy Alan Shatter.
The information available to my Department is that seven university academics have been appointed under a framework agreement made under section 25(5)(a) of the Universities Act 1997. This facilitates the attraction of individuals with exceptional or scarce expertise and-or qualifications to their academic and research staff by allowing universities to offer enhanced remuneration packages, without recourse to further ministerial sanction. While the purpose of the provision remains valid, its exercise will be reviewed to ensure future appointments are made on a strictly limited and exceptional basis.
There are some 150 academic medical consultants, many of whom attract salaries in excess of €200,000. My colleague, the Minister for Health, Deputy James Reilly, proposes to address this issue in the context of his discussions with the representative associations for those public service grades on matters related to the current consultant contract.
Finally, the Government decided not to apply the pay ceilings to the Central Bank or the National Treasury Management Agency, NTMA, and my colleague, the Minister for Finance, Deputy Michael Noonan, outlined the remuneration rates in those agencies in his replies to Questions Nos. 70, 72, 74 and 75, taken together, and Questions Nos. 69, 71, 73 and 76, taken together, of 29 June. I have also written to the Minister for Finance concerning the pay arrangements, including in respect of greater transparency with regard to remuneration, within the relevant agencies. I intend to pursue this matter with him.
I am pleased to see the Minister in the Chamber to take these questions. I had intended to ask him a question regarding the remuneration of a particular individual, namely, Mr. Declan Collier, chief executive officer of the Dublin Airport Authority, DAA. Does the Minister consider it acceptable that a person in such a position should also be permitted to serve as a director of Allied Irish Banks and as a member of that bank's remuneration sub-committee? In other words, Mr. Collier is drawing a public salary from the DAA, receiving a second payment for his membership of the board of AIB and a third payment for his role on the bank's remuneration sub-committee. Does the Minister support the practice of people in the public service not only being paid an exorbitant salary but also being paid on the double and treble? I submitted that question to the Minister's Department, but it was not accepted.
I congratulate the Minister on his press announcement today regarding his meeting with representatives of the EU-IMF-ECB troika. I submitted a question for priority answer today on the Minister's specific role in dealing with the troika. Again, somebody in the Minister's Department decided he should not be allowed answer that question in the Chamber today and that it should instead be directed to the Department of Finance. The Minister should be careful; somebody is trying to nobble him before he even gets off the ground. He should tell his officials that questions on public expenditure issues should be answered by him rather than assuming the default position of making the Minister for Finance responsible for everything.
The Deputy will find that I am happy to answer any question. On his point regarding aggregate salaries, the individual to whom he referred was appointed to all those positions by the Government of which the Deputy was a member. Having said that, I take his point. The aggregation of salaries is an issue we will have to examine. The same issues will arise in regard to aggregation of pensions, which I will consider in the pensions Bill.
2 Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will publish in full the Comprehensive Spending Review of all Government Departments in a single document; and if so, when he will do so. [20521/11]
Ministers have been working with their Departments in recent weeks to complete reviews of all expenditure under their auspices, including in bodies under their aegis. These reports are now being submitted to the steering committee for evaluation and finalised reports will be presented to the economic management council in September. The results of the comprehensive review process will then be brought before Government for consideration and decision in the budget and Estimates process later this year. The question of publication of the reviews will be considered in that context.
We are pleased the Minister is in the Chamber to take our questions. The broad smile on his face suggests he is equally pleased to be here. The Minister has made much of the promised spending review which, by definition, will be a comprehensive process. The Minister for Finance, Deputy Michael Noonan, has made clear that not alone will the Government seek to reach the target of €3.6 billion in cutbacks in the next budget, as required under the terms of the bailout deal, but may seek to secure savings of as much as €4 billion.
In the interests of transparency, good decision-making and fair play, the Minister must publish the comprehensive spending review in full, as a single document. If the Government is asking people to shoulder the burden, to be patriotic in tolerating austerity and cutbacks, the very least to which the public and the Members of this House are entitled is full and frank information. It is very odd, given that his remit relates to transparency and reform, that the Minister would undertake such a comprehensive procedure only to shield it from the view and consideration of this House and of concerned groups and individuals. The response that it will be sent to a steering committee or sub-committee is not adequate; we take it as read that it will go through those machinations. Why can we not have sight of it in its entirety? It could be published on the Department's website, an innovation of which the Minister is rightly proud.
I thank the Deputy for her positive comments. In terms of transparency, it is constitutionally a matter for the Government to formulate the budget and to present it to the House. All of the documentation will eventually be published, but I want to allow the broadest possible discussion and analysis within the Cabinet. I have opened up the process to ensure it is not the routine salami-slicing affair and I hope significant new approaches will emerge from that. However, all of this must be analysed by Government. It would do damage to the decision-making process if every idea were put out there, even those never likely to be acceptable to Government, until the proper constitutional role of the Government itself to make decisions is determined. After that, all the presentations to my Department will be made available for consideration by Members opposite and others.
The Government has indicated that in seeking to reach its target of €4 billion in cutbacks, income tax rates and social welfare payments will not be touched. This raises the question of where the reductions will be targeted, if the money is not coming from those sources. It is unacceptable for the Minister to say that the process of analysing expenditure should not be available to people beyond a narrow grouping around the Cabinet table. The Minister and other Government members have correctly said that it is essential that we consider all options and make the right decisions, driven by the principles of fair play and transparency. If the Minister is serious about that, it is incumbent on him to publish this document in full.
The Deputy seems to be under something of a misapprehension. The comprehensive spending review is not a document but a process.
It could be presented in that format.
It could not. It is a process, with submissions coming in and an analysis undertaken of those submissions. There is scope for external inputs. For example, I have sought views from the public and we are receiving many useful proposals from front line workers, people who know how savings and improvements can be made in their own workplace. All of this is feeding into the comprehensive review of expenditure. It is not a document being devised by some mastermind; it is a process. Constitutionally, all of this must be weighed up and decided upon by the elected Government. I want the process to be as open as possible. Ideas will be put out there, no doubt, in the course of that and I look forward to interaction with the Oireachtas committees in this regard. However, the Government itself must be in a position to make rational decisions on the basis of all of the options available to it.
3 Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform in view of the fact that a pension levy was imposed on the income of ordinary public sector workers to secure their pension entitlements, if it is his intention to retain their current retirement age; if he will give an assurance that their current pension entitlements will be maintained; and if he will make a statement on the matter. [20609/11]
The Financial Emergency Measures in the Public Interest Act 2009 introduced a number of measures in the public interest. Section 2 of the Act provided for a pension-related deduction, PRD, to be made from the remuneration of public servants who are members of public service pension schemes or who have analogous arrangements. On average, this reduced pay by approximately 7%. The PRD was introduced in the context of the priority being given to the stabilisation of the public finances and the serious crisis facing the State. The deduction took account of the fact that public servants enjoyed relatively good pension provision in comparison with other workers.
The Croke Park agreement sets out our approach on the pension arrangements of existing public servants. The agreement makes no changes to the pension terms of serving staff. However, it provides for discussions to take place on the method of determining pension increases for existing public servants when they retire. A clarification to the agreement further provides that there will be no change in this method during the lifetime of the agreement.
The Government is preparing a single pension scheme for new entrants to the public service. This will provide career-average defined benefit pensions, inflation linkage of benefits and set pension age equal to the State pension age.
Does the Minister agree that the cut of 7% in the incomes of public sector workers as a result of the pension levy together with the universal social charge were a gross injustice, given that whatever flaws there may be in the public service, it was not public sector workers who created the economic crisis? In the context of pay, public sector workers have taken a massive hit with the result that many cannot meet their mortgage repayments and are struggling and it would be of great comfort to them to know they will not be faced with a further hit? As Deputy Mary Lou McDonald stated, the Minister outlined that there would be no tax increases or social welfare cuts, one would say there would be a fear that public sector workers might yet again be a target for possible cuts or diminutions in their conditions. I wish to ask a straight question, as it is not clear from the answer to the question, given that public sector workers have already paid the pension levies to give them their entitlements to a pension, will the age that public sector workers retire be retained or raised in line with that proposed for other workers? Does the Minister intend to raise the age of retirement for public sector workers and must they work for a longer period, having already paid the levies?
I agree with the Deputy to the extent that a big burden is being carried by a whole cross-section of our community, public servants, workers and all taxpayers on foot of disastrous decisions that were made by bankers and policy makers in the State. It is not fair but it is necessary in order for the country to survive and to thrive and there is no way that can be ‘magicked' away. Whether it is deemed to be fair or unfair, it is a burden that the population must carry because we are determined to bring about solvency again.
To answer the Deputy's specific question, the Croke Park agreement has been accepted and is being implemented by the Government. Under the Croke Park agreement, there are conditionalities that will require fundamental change in the way that public services are delivered and a downsizing of the public service. If those conditionalities that are set out in the agreement are met, the Government side and the employers have said that it will not reduce pay or have compulsory redundancies. Also implicit in that agreement is that the one potential for negotiation which is to look at increases in pension to be linked to inflation rather than linked to the grade at which the person retired. Those negotiations will not be opened until after the conclusion of the agreement in 2014.
I will be bringing in a pensions Bill, as I have indicated, to link the retirement age ofcivil servants in the future, not of incumbents, to the retirement age of the State pension generally.
Is it fair or even prudent, when there is significant unemployment and graduates coming out of university not being able to find jobs, to make the working life longer for people employed in the public sector or elsewhere, instead of maintaining the existing retirement age as a consequence of which there would be more jobs for the young qualifying graduates?
Our time is up.
4 Deputy Sean Fleming asked the Minister for Public Expenditure and Reform his plans to look at the issue of reimbursing public service staff for pay cuts introduced over the last year, when savings have been achieved under the Croke Park agreement. [20295/11]
The Financial Emergency Measures in the Public Interest Acts 2009 imposed a pension-related reduction effective from March 2009 and a reduction in pay rates effective from January 2010 ranging from 5% to 15% for all public servants. The effect of these measures, combined with measures to reduce the numbers of public servants and to restrict other elements of the public service pay bill, has been to reduce the net cost of the Exchequer pay bill by some 15.5% between 2009 and 2011. The implementation body for the public service agreement in its report to Government of 15 June 2011 established that the estimated sustainable pay bill savings in the order of €289 million in the public service pay bill had been achieved in the year, March 2010 to March 2011, along with other substantial savings in the delivery of public services.
Paragraph 1.16 of the Public Service Agreement 2010-2014, Croke Park agreement, provides that the position regarding public service pay, including any outstanding adjudication findings, would be reviewed in accordance with the statutory requirement under both the Financial Emergency Measures in the Public Interest Acts of 2009 to review the operation and effectiveness and impact of the Acts before 30 June 2011. In addition to the criteria set out in those Acts, the review would take account of sustainable savings generated from the implementation of the agreement.
The Minister for Finance, in line with the requirements under the Acts, completed a review of their operation in June. The reports were laid before both Houses of the Oireachtas on 30 June and have been published on the website of my Department. The reports concluded that, having regard to the overall economic conditions, national competitiveness and Exchequer commitments in respect of public service pay, the measures put in place by the Acts continue to be needed.
As required under the Croke Park agreement, there has been ongoing dialogue between representatives of public service management and the public service committee of the Irish Congress of Trade Unions in relation to the outcome of the reviews. The context is the Government's affirmation of the key commitments under the Public Service Agreement 2010-2014 to no further reductions in pay rates for serving public servants and no compulsory redundancies, save where there are existing exit mechanisms. These commitments are contingent on delivery of the necessary flexibilities and reforms to public service delivery that are required under the agreement.
The fiscal targets in budget 2011 are based in part on the reductions in the Exchequer pay bill achieved under the Acts, and can be met only through a continued policy of pay restraint. I believe that the general measures the Government is taking to reduce the overall public service pay bill are understood by the public service committee.
I really must take issue with the Minister. It is a scandal what he has done. In his reply to my question he has broken the Croke Park agreement. The Minister and I both know there is a clear commitment regarding low-paid workers and that is why they voted for the Croke Park deal. The Minister quoted from paragraph 1.16 of the Public Service Agreement 2010-2014 but did not quote the last two sentences of the paragraph, which state:
In the event of sufficient savings being identified in the Spring 2011 review, priority will be given to public servants with pay rates of €35,000 or less in the review of pay which will be undertaken at that stage.
Very low-paid workers, those who are taking home between €400 and €500 a week, voted for this agreement on the basis that they would be the first people to get a reimbursement of salary and wages. The Minister stated that verifiable savings of €289 million in the public service pay bill had been achieved. I want the Minister to give figures for the number of low-paid workers in the public service earning less than €35,000 per annum. To quote the financial emergency measures to them at this stage, 18 months after they have delivered the savings and for the Minister to thank them for the savings but in the national interest they will not be paid their increase even though they were first in line under the Croke Park agreement——
What brass neck — I have seen brass neck in this House over the past 20 years but this is something. The objective of the Croke Park agreement and all the measures we have taken, including not resiling from the Financial Emergency Measures in the Public Interest Acts that the previous Government put in place is to restore economic solvency of our State. Deputy Fleming and his party broke that. I am glad that the arbiters of the Croke Park agreement are not Deputy Fleming and his party but those were party to the agreement.
I met the implementation body, the unions and employers organisations and, unlike the Deputy opposite, they have an understanding of where the nation is and what needs to be done. Our objective is to take the painful path for all people in the State to restore our economic sovereignty, to ensure there is a public service and that pay slips and money are available to maintain the public service into the future. We will do that. We inherited a broken, damaged economy but we will restore it. We are already taking steps to do so as the review by the troika indicated today. We will not be lectured about what we need to do by the people who were party to the damage done to our economy.
I compliment the Minister on restoring the minimum wage to people mainly in the private sector, including contract cleaners in council and local authority offices. I do not understand why they singled out the low-paid workers in the public service not to receive a similar increase when it is provided for and earned under the Croke Park agreement.
5 Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform his plans, if any, to review the public sector recruitment embargo, in particular in relation to its impact on front line services and its real cost savings; and if he will make a statement on the matter. [20624/11]
The Government is committed to reducing public service numbers in accordance with the programme for Government subject to there being no compulsory redundancies and to the protection of front line staff. The recruitment moratorium is a means to this end and is being used with redeployment and increased productivity to limit the impact of necessary savings on all public services. As outlined in the Government programme, this will involve a fundamental change to the way in which the Government and the public service operates, including the rationalisation of core processes across the public service, a reduction in the number of State bodies and the elimination of non-priority programmes and outsourcing of non-core functions, where appropriate. This is being reinforced by the comprehensive expenditure review which focuses on reform and on new ways of delivering public services taking advantage of the opportunities and challenges arising under the Croke Park agreement. This review will identify the policy decisions within which the reduction of public service numbers will be made. These numbers reductions will be a driver for public service-wide reforms. This includes reforms to the manner in which front line and back office services are delivered across the public service. Staffing resoures will be refocused on delivering priority service and programmes as set out in the Government programme.
The comprehensive review of expenditure, therefore, seeks to identify areas where reductions can be achieved and will identify areas where staffing resources can be freed up through the use of shared services. In the Croke Park implementation group's first progress report, Exchequer pay bill savings in the order of €289 million were identified as having been achieved in the 12 months to end March 2011. The provision under the National Recovery Plan 2011-14 is for a gross Exchequer paybill of almost €16 billion in 2011. When compared with the 2010 paybill, this would represent a savings target of approximately €223 million for 2011.
At this point it is expected that the target for a gross Exchequer pay bill of almost €16 billion for 2011 will be met. Current targets for staff numbers will be kept under review in the context of budgetary considerations later in the year.
The Minister is right to treat with contempt the interrogation of Fianna Fáil on the reasons we are in this disastrous situation. Is it not the case that the Government's decision to adhere to the EU-IMF austerity programme, continuing with the public sector recruitment embargo, is not leading to reform but towards a slaughtering of public services? The figures in education indicate 1,400 jobs garnered gone out of the education sector when 10,000 extra children come into the primary schools every year. This amounts to a savage assault on our education system where services are giving way.
I ask Deputy Boyd Barrett to ask a question.
It is not the case that, with nearly 5,500 health service workers down as a result of the embargo, this is the reason hospitals and accident and emergency services are closing down? Is it not unbelievable that 13%——
That is not a question.
That is a question. I said "Is it not the case".
Deputy Boyd Barrett is offering a point of view and prefacing it with "Do you believe" or "Is it not the case". I ask Deputy Boyd Barrett to pose a question because otherwise time will run out.
The Acting Chairman is cutting into my time.
Deputy Boyd Barrett is cutting into his time. I ask him to put his questions.
Is it not the case that continuing with the embargo on the slaughtering of our public services that, for example, a 13% cut in staffing in local authorities means local services are slaughtered? Is it not time for the Minister to reconsider the sanity of this embargo if we are to have any public services for the people of this country?
Deputy Boyd Barrett is an idealist and he believes what he says. The problem is that we must pay our way. We are borrowing €18 billion to fund ourselves for this year. Do I like the memorandum of understanding we inherited from our predecessors? No, I do not, nor do I like reporting to external forces, chapter by chapter and line by line of public expenditure. I am determined and the Government is determined to get us back to a position where those domestic decisions are made by the sovereign Government of Ireland without oversight. In order to do that, we need to make reductions in expenditure that are laid out in order to get to a balanced budget and a 3% deficit by 2015. This is our determined view.
The notion that we could abandon the memorandum of understanding and tell the troika of the EU, the IMF and the ECB to take a hike is fine. They would happily take a hike. This would leave us with an €18 billion hole in expenditure this year. That is not having a moratorium on staff, that involves closing hospitals and schools and Garda stations. That is the slaughter of public services, the consequence of Deputy Boyd Barrett's idealism or naivety if he thinks we can simply magic away a gap in our expenditure of €18 billion.
We must be honest and truthful with people that there is no magic way of getting out of the debt burden placed upon us by previous Administrations and decisions made by them. It falls to us, those elected in this House now, to have the responsibility to face up to that and make the hard decisions.
A brief supplementary——
The time is up and we must move on.
Just one line.
Time is up, unfortunately. I regret that.
