These statements will adjourn after two hours and ten minutes. The following arrangements apply pursuant to the order of the Dáil of Tuesday, 27 June: speeches shall be confined to a single round from a Minister or Minister of State and the main spokespersons of Fianna Fáil, Sinn Féin, Labour, Solidarity-PBP, Independents 4 Change, the Rural Independent Group and the Social Democrats-Green Party group or a Member nominated in their stead and shall not exceed 15 minutes in each case; a Minister or Minister of State shall make a concluding statement that shall not exceed ten minutes; and all Members may share time.
Financial Emergency Measures in the Public Interest: Statements
I thank the Business Committee for arranging this opportunity to make a statement on FEMPI. As the House is aware, I am obliged under legislation to review the operation and effectiveness of the FEMPI legislation, having regard to the overall economic conditions in the State and our national competitiveness, and then to consider whether the relevant Acts continue to be necessary, having regard to, among other matters, the revenues of the State. A written report of my findings is in the process of being laid before the Oireachtas today and I want to take this opportunity to share the main findings with Deputies.
Overall, my conclusion is that the FEMPI legislation has been highly effective at temporarily reducing the public service pay bill. Upon full implementation of the Lansdowne Road agreement, there will be an outstanding €1.4 billion in FEMPI savings still dependent on the operation of FEMPI pay and pension measures. Unfortunately, the corollary of this is that there is a continued necessity for that legislation, as repeal in a single year is unaffordable. Thankfully, the recent negotiations on an extension of the Lansdowne Road agreement, or Lansdowne Road II, have provided us with a negotiated approach to exiting the FEMPI legislation that is balanced, fair and sustainable. Crucially, the Government's establishment of the Public Service Pay Commission and the tasking of that commission with providing inputs to the parties on a roadmap out of FEMPI assisted in the negotiations.
The terms of the proposed agreement, which have been commended by the Workplace Relations Commission, WRC, to both parties, will substantially achieve the ambition of exiting FEMPI over the period 2018 to 2020. If these proposals are accepted by public servants - I am conscious that they are being balloted on at the moment, so I do not want to say too much - they will form the basis on which the remaining FEMPI measures will be dismantled over the coming years. Importantly, these proposals have been fully costed and are compatible with our overall fiscal policy.
I will address each of the points - the effectiveness, continued necessity and proposed extension of the Lansdowne Road agreement - in turn. The Financial Emergency Measures in the Public Interest Acts have been a cornerstone of budgetary consolidation. Over the period 2008 to 2014, these pay measures were responsible for a €2.2 billion reduction in the public service pay bill.
More than that, these reductions assisted in the terribly difficult and painful process of correcting our finances between 2008 and 2014.
As a member of a currency union, it was impossible for Ireland to use one of the traditional policy tools, namely, currency devaluation, to achieve improvements in our external competitiveness and the price of our exports. Prices and wages, while starting from a high base, have risen at rates slower than those with whom we trade. Actual and overall, or nominal, adjustments in wages in the past few years also contributed to improvements in our competitiveness. As a result, our competitiveness index improved by a fifth between 2008 and 2017. In turn, this hugely assisted with our export-led recovery.
Additionally and crucially, the changes in public pay allowed the Government to prioritise recruitment to our public service at a time of huge difficulty. Since the beginning of 2014, an additional 20,850 public servants have been recruited to meet demands for enhanced public service delivery. These include 5,243 more teachers, 2,360 more special needs assistants, 3,073 health and social care professionals, 2,267 nurses and 1,426 consultants, doctors and dentists. Given the constrained resources available during the period, this level of recruitment would have been impossible in the absence of the FEMPI legislation.
Our economic recovery is progressing but vulnerabilities remain. Levels of private and public debt are high. Our highly concentrated industrial base represents another recurring and continuing risk facing the economy. As a result, output and employment continue to be exposed to particular risks and shocks. Loss of competitiveness is another potential risk for our economy and it is amplified by the current constraints in the housing sector. Deputies will be aware that, while recent economic data and forecasts are positive, risks remain.
The International Monetary Fund's recent review of our economy found that “outlook remains positive, but with substantial, mainly externally-driven downside risks”. Closer to home, the Irish Fiscal Advisory Council, an independent body established as part of our reformed budgetary architecture, was more explicit when it concluded that:
In the medium term, more persistent downside risks are visible. Principal among these is the possibility that the outcome of negotiations on the UK’s departure from the EU could lead to a more sustained negative impact on Irish economic growth than is currently estimated.
Additional risks are posed by the appropriateness of the wider euro area monetary policy for Ireland over the medium term, as well as by a variety of potential external demand and exchange rate shocks. Changes in US and EU policies, particularly around corporation tax, could also negatively impact on foreign direct investment, FDI, flows into Ireland. The Department of Finance forecasts now assume a hard Brexit. Work carried out by my Department and the ESRI shows that the impact of Brexit on Ireland will be significant. In the long run, the worst-case scenario - that is to say, in the absence of a trade deal with the UK - is that after ten years our national income could be 4% below what it otherwise would have been in a no-Brexit situation.
Of concern in all of this is the continued high level of Irish Government debt, €201 billion, which continues to place limits on the ability of our finances to cope with potential risks abroad. Looking further ahead, the Irish Fiscal Advisory Council recommends that “fiscal policy should be cautious reflecting still high debt levels and risks to long-term revenue and growth”. It goes on to say, “Strong adherence to the new framework is essential to avoid repeats of the policy mistakes that contributed to multiple economic crises in recent decades.” It is for these reasons that I judge there to be a continued need for the continuation of the existing legislation.
Turning to the draft public service stability agreement for the period 2018 to 2020, I contend that we have a balanced approach to public service pay in this agreement which is compatible with the economic conditions of the State, national competitiveness and available revenues. I will explain why. While international risks and domestic vulnerability remain it would be disingenuous of me to stand up and say that no progress has been made. The truth is that the State’s finances have considerably improved from when the first Act was introduced in 2009. Even since 2015, the growth in the economy has been greater than we then anticipated. For that reason, it was appropriate to revisit the terms of the then Lansdowne Road agreement to reflect these improvements and provide for conditions for potential industrial peace over the next three years.
It is also important to allow wages to increase in a controlled and sustainable manner. Lower wage growth can add to disinflation pressures which, in turn, imply higher real interest rates and greater difficulties in managing public and private debt and generating sustainable domestic demand. As I have said on many occasions, wage growth is good for how our society will evolve. People need to see that progress is being made and that incomes are improving. For example, a public servant currently earning €37,500 will benefit by over €2,700 per annum, or almost 7.5%, across the lifetime of this agreement. As well as providing for affordable increases in pay for public servants, the proposed agreement also provides for an additional pension contribution by public servants in lieu of the pension-related deduction, which will be crucial in terms of putting our public service pension bill on a more sustainable long-term footing in the future.
These proposals represent a package of measures that is balanced, fair and affordable. They represent a significant milestone in the unwinding of the emergency legislation that was introduced across the crisis period - an unwinding which has been called for in this House. Perhaps most importantly in the context of the current discussion, the proposed agreement provides for a series of pay increases which will unwind FEMPI pay reductions for all public servants earning up to €70,000, which is equal to almost 90% of all our public servants, over the period to 2020. As such, this provides a clear and realistic route out of the FEMPI legislation.
The legislation that is the subject of this debate was necessary to restore order to the public finances at a time of unprecedented economic crisis. That said, the Government is committed to the affordable and orderly unwinding of the legislation. We have now begun the process of doing so. Under the collective agreement framework of the Lansdowne Road agreement, it is our intention to continue this work in the context of a proposed extension to that agreement, which was negotiated in recent weeks and which is now subject to ratification by the unions and associations concerned over the coming weeks and months.
I am delivering our party's contribution on behalf of my colleague, Deputy Calleary, who cannot be here. Fianna Fáil has long called for the unwinding of the FEMPI legislation in a fiscally responsible manner. We want to see a fair deal for public sector workers, particularly for low and middle-income earners. It is imperative that we have strong and sustainable public services and that industrial unrest is avoided.
FEMPI must be unwound in a responsible and sustainable way that treats public servants fairly and ensures the provision of vital public services to those who need them. Reversing FEMPI immediately will do nothing to solve problems surrounding pay inequality and will only succeed in restoring pay to the higher-paid civil servants. Industrial unrest will ultimately cost everyone dearly.
The Government and trade unions came to an agreement earlier this month. However, key challenges remain. Each union and association must now consider the proposals and then put them out to ballot of its members. Time must now be given for the unions and associations to vote and the process should be allowed to proceed.
Despite the agreement earlier this month, key issues remain to be resolved. The agreement is vague to say the least on pay equalisation. Workers who joined after 2013 will still be paid less than their colleagues who took up their posts before then, despite doing the exact same job. The agreement states that any solution to this issue must not give rise to implications for the fiscal envelope of the agreement. It is difficult to see how this issue will be resolved in such circumstances. This is a major issue and the Government must outline in more detail how it intends to deal with it.
Staff retention and recruitment is another key issue affecting the public sector, which the agreement fails to address fully. In areas like nursing and the Defence Forces numbers have been falling to critically low levels. This not only affects the services themselves but also the conditions of existing employees. The agreement is also vague on retired public servants. In particular it is not clear how the difference between retirees who retired before 2012 and after 2012 will be addressed. I ask the Minister when summing up to respond to some of these issues relating to vagueness.
As we are discussing FEMPI, I take the opportunity to quote from a letter that I and other Oireachtas Members received from a GP in a rural practice, which happens to be in my constituency. It relates to FEMPI and the broader health service. It states:
As you may be aware the all-party Oireachtas Committee on the future of Healthcare/Slaintecare Report recommendations are up for debate in the Dáil before the summer recess. We GPs would greatly appreciate your support in bringing the following to the attention of your colleagues before and/or during the debate.
1. Since the implementation of the free GP care for children under 6, attendance of such children at my practice has increased by 40%. This increase has also been reflected in the local out-of hours service, Shannondoc. Indeed I have several children under 2 attending me who have attended 30+ times in the first year of life, outside of vaccinations and developmental checks. This illustrates that people do not appreciate that which is free and instead overuse it. This has resulted in elderly genuinely unwell people being unable to access the GP when they genuinely need to be seen which has increased the number of people needing admission to hospital as they are seen later in their illness.
2. The new Accident and Emergency department in University Hospital Limerick opened on Monday 29th May (2 years late). I happened to be attending for a sexual assault and decided to have a look around. The new area is 3 times the size of the existing A&E and was already, 19 hours after opening, at 3am, full of trolleys. This is partly because of the problem detailed above and partly due to a lack of beds in the hospital itself.
3. There are 46 GPs in our West Limerick Shannondoc area. Of those 46, at least 11 will be retiring in the next 5 years. There are NO GPs to replace them. We currently struggle to find locums to cover holidays and have zero chance of finding anyone in case of illness or other emergency. My partner retired 2 years ago and I have been unable to find an assistant. This is for the following reasons:
- Young GPs now qualifying do not see Ireland as a viable prospect to run a business and are emigrating in their droves.
- Those who stay can pick and choose the jobs they want as there is such a shortage
- Due to the demand they can afford to work in cities where they have the back-up of a hospital nearby, where they don't have to do out of hours work or house calls, where they can work as employees with all of the rights and none of the responsibilities of running a business.
- Rural GP is not attractive to them.
General practice needs your help. Put simply, if this continues, when you are older and need care, there will be no doctors to care for you.
I am quoting this letter because it goes on to mention FEMPI. It states:
One of the first things that needs to be addressed (now that it is being addressed with all other parties affected) is the reversal of the FEMPI cuts. GP [general practice] was hit with 38% cut in funding over 3 years which was greater than any other group. That cut in funding was not to our wages but to the gross money coming into our surgeries out of which we have to pay mortgages/rent, staff, professional indemnity and for all the courses and conferences that are obligatory for us to maintain our medical registration.
At the same time as the FEMPI cuts, many more patients became eligible for medical cards due to unemployment, then you had the under-6 card and the over-70 [medical] card. This dramatically cut our private income also.
We cannot continue to provide the level of service that we have done for the last 40 years, plus take on all of the extra work that Slaintecare has suggested without funding and more doctors, and we will not get more doctors without the funding to make it attractive for them to stay.
The other thing that needs to be addressed with urgency is a new contract for GMS GPs. Our contract is over 40 years old and is completely unfit for purpose. Medicine and demand for care has changed dramatically in that 40 years and the new contract needs to reflect this. All parties affected, IMO, NAGP etc. need to be at the table for that negotiation (not consultation) process. We were supposed to have a new contract by July 2015, 2 years later, there appears to have been little progress.
Thirdly funding in general needs to be increased to Primary Care. If we are to appropriately manage chronic illness (which incidentally is not part of our current contract), we need more staff and more money to do so, to purchase equipment and, hopefully if they can be found, hire extra doctors to help. If hospitals are to have any hope of lessening the trolley crisis, we need to increase funding to home help, to carers and to nursing homes so that vulnerable people have somewhere safe to go on discharge. If we are to keep people out of hospitals, we need more access to physiotherapy ... to occupational therapy and to respite care. With an elderly population there is increased demand for house calls for which there is NO remuneration during surgery hours and it makes it financially unviable to do them. Multiple minor surgeries and other procedures such as contraception are carried out in GP [general practice] and cost up to 10 times less when done in GP as opposed to in hospital but we don't have the time ... or the funds to perform them.
Lastly, with respect to "free" healthcare for all, I used to be in favour. But having seen the effects of the Under 6 card, I can no longer support it. I believe, as do most of my colleagues, that there should be a maximum number of "free" visits and/or a small charge for each visit so that people only attend when really necessary.
General practitioners are at the heart of the healthcare system, completing over 25 million consultations every year (95% of patient contact). The Irish public values their family doctor and wants their GP to be at the heart of their local community. However, we are at a crossroads - unless the recommendations above are implemented, we will never fix our healthcare system. This is our chance, and your chance, to help do that.
That is correspondence I and other Deputies received indicating one rural GP's views of the situation. I wanted to put it on the record of the House because there is a FEMPI angle to it.
I reiterate the Fianna Fáil position on FEMPI.
We have long called for the unwinding of FEMPI but we recognise that it is not simple. There are parameters within which that has to be done and it must also be done in a responsible manner and one which is sustainable.
I wish to share time with Deputy Nolan.
Is that agreed? Agreed.
Now that the statements on health are finished, I will return to public sector pay. I welcome the opportunity to have this debate today. I met the Minister and his staff in his office a number of weeks ago and we had a full and frank discussion on the draft public sector pay agreement. The trade union membership will have its say on this matter, and I fully respect the outcome. I wish all of the trade unions well in their work in the coming weeks.
I presented the Minister with a document some months ago setting out my party's framework for a new public sector agreement. What we got is an extension of the Lansdowne Road agreement. As the three-year extension is a bit longer than people expected, essentially it is a new agreement. I welcome many aspects of the agreement. We wanted an agreement that prioritised low and middle-income workers. We also wanted a fair and timely unwinding of FEMPI. We sought a situation where the vast majority of public servants, who had on average 14% taken from them over the course of the austerity years, would have most of their income returned to them. I have publicly welcomed elements of the agreement. However, some issues were not addressed. One core issue in our framework document is equal pay for equal work. Unfortunately, the Minister's proposals and the agreement that is on the table are weak on that issue. Let me be crystal clear; my party is very strong on this issue. It is a red-line issue for Sinn Féin and we are absolutely committed to returning the public service to a single-tier pay system, not only because it is the right thing to do for reasons of equality but because we must also make sure that we can recruit nurses, doctors, gardaí and front-line workers in the public service. It is very important that recruitment can happen and that public sector workers feel they are valued and they are not part of a two-tier pay system.
It does not make sense that equal pay was not addressed in the course of the agreement. I accept it was partially addressed on the pension levy side. There is a vague reference to looking at the issue at some point in the future - kicking the can down the road, which I am afraid will not do it for the vast majority of those public sector workers who are dependent on the Minister and the trade unions to deal with it once and for all. However, it was also the source of many of the industrial disputes that we had in the State in recent years. Therefore, it makes no sense whatsoever to have a three-year extension of a pay agreement that fails to deal with the core sore that led to many of the industrial disputes and strikes in the first place. As we know, it is a sore in Garda stations, hospitals and schools and it is one of the reasons many of the trade unions are not in a position to support the agreement and have called for a "No" vote. We must respect the rights of the individual unions to take their own positions on the agreement and have their own ballots. The membership of the trade union movement as a collective will make its decision known on the issue.
The agreement makes provision to revisit equal pay for equal work towards the end of 2018 but given the unfairness of this matter, it is deeply disappointing that it has not been put to bed for good. The agreement also kicks into touch the issue of retention, particularly within the health sector and the Defence Forces, despite the fact that this was raised by the Public Service Pay Commission, which the Minister commissioned. In my view one of the reasons it was commissioned was to delay as much as possible the actual negotiations but when the commission did produce a document, retention did feature heavily, although it did not feature all that much in the agreement itself. The agreement provides for talks on this issue towards the end of 2018, but as I said previously to the Minister in this Chamber, retention is a critical issue in the here and now. It is one that cannot wait for another 18 months to be addressed.
Sinn Féin's priority in all of these issues is to protect workers on low to middle incomes. On the issue of equal pay, I spent many months asking the Minister to cost the restoration of the public sector to a single-tier pay system and we got the reply some weeks ago that it would cost €209 million. We hear over and again from Fine Gael that the recovery is bedded in. Before the previous election the Government's mantra was "We are in full recovery". However, when we point out all of the issues that remain to be addressed, the mantra suddenly changes.
I do not believe FEMPI can or should be unwound in one go, not because I do not believe those on low and middle incomes should get full pay restoration - of course I do - but I would not support a situation whereby the top income earners in the public sector get very significant pay restoration. One could ask if FEMPI was to be unwound in one go what it would mean for ordinary workers. It would mean €66 for somebody on €25,000; €577 for somebody on €30,000; €1,752 for somebody on €35,000; €35,000 for somebody on €150,000 and; €53,000 for somebody on €185,000. One should forgive me for not wanting to support the unwinding of FEMPI which would give the Secretary General of the Department of Finance a pay rise of €53,000. I do not think he would expect that. Neither do I think the Minister would propose that and we would certainly not support it. We are not in favour of giving very large sums of money in pay restoration to people who are already on high incomes.
Under the Haddington Road agreement there was a separate registered agreement whereby those earning above €65,000 already benefit from significant pay restoration. I refer to those earning between €65,000 and €110,000. We fall into that category. It is hugely important that public sector pay is addressed. I accept there is a new agreement on the table. I have acknowledged that it is up to the trade union movement to adjudicate on that matter. We must give them the independence, time and space to be able to do all of that.
We have raised repeatedly with the Minister the issue of equal pay for equal work. We genuinely believe it was a mistake on his part not to have dealt with the issue. We still appeal to him to deal with it in the upcoming budget. It is something we will address in our alternative budget this year. On the previous occasion when we discussed public sector pay, the Minister seemed to think there was no issue with retention yet we were all able to give him examples of hospitals right across the State that cannot keep wards open or services going because they cannot recruit nurses. I gave him an example from my constituency of a community hospital in Dungarvan where beds were closed because it could not get the staff. The manager of the HSE in the area wrote to all retired nurses, those working part time or on short-time contracts appealing to them to do extra hours or come back into the system in order that the ward could be opened again for patients who need it. That is one example and it is happening in hospitals across the State. With respect, the Minister needs to take his head out of the sand when it comes to retention. It might not be an issue across the entire public service but it is one that affects many areas, and it is one that must be addressed.
We made our message to the Minister very clear. I thank him for agreeing to meet us, which coincidentally was the day after the agreement was signed. The Minister will note the areas where we disagree and the areas where we agree and acknowledge that we have welcomed elements of the pay agreement, which will be good for public sector workers. Anything that is given back to them, when one considers that they had so much money taken from them unilaterally over the course of a number of years, is to be welcomed.
I shall make one final point. I hope that FEMPI - and the Minister's emergency powers under the legislation - is finally taken off the Statute Book. I do not believe we should be using these powers again. We should be negotiating with trade unions, not involving ourselves in unilateral action whereby a Minister can simply cut the pay of public servants.
Go raibh míle maith agat as ucht an deis chun labhairt ar an topaic seo anocht. This issue is of great concern to tens of thousands of workers across the State. These workers are still being treated unfairly, despite the fact that the Government states over and over again that the economy is in recovery. Public sector workers are certainly not feeling that recovery.
I shall begin by outlining Sinn Féin's position on FEMPI. We do not wish to see FEMPI scrapped overnight. We recognise that this would be completely unfair and would eradicate any possibility of investing in critical public services, such as health, housing and education. More fundamentally, Sinn Féin recognises that the scrapping of FEMPI measures overnight would not work. We want a fair and orderly unwinding of FEMPI. People who earn €185,000 would see a gain of €53,000, while those on incomes of €25,000 would receive just €66. What we do wish to see, however, is the immediate repeal of the powers that the Ministers gave themselves in respect of public sector pay. Sinn Féin has consistently called for the fair and orderly unwinding of the FEMPI legislation and as my colleague, Deputy Cullinane, outlined, the party has met the Minister on the issue and we have outlined our views on the draft public sector pay agreement.
I welcome that the agreement works towards a timely and structured unwinding of FEMPI, as we have called for. There are, however, a number of issues with the proposed pay agreement and with the Government's general approach to public sector pay. Previous agreements have disproportionately benefited those on higher incomes in the public sector. This is no surprise because elitism appears to be part of the Government's mantra. The Lansdowne Road Agreement completely favours those earning over €65,000, giving them, as Deputy Cullinane outlined, full pay restoration. For those earning less than €65,000, there has been no restoration beyond a flat €1,000 increase. This approach was - and remains - completely unfair. It has led to a lot of mistrust between public sector workers and the Government. Sinn Féin believes that those on middle and low incomes should be prioritised in any pay negotiations. I share the concerns of my colleagues that the new agreement will again favour higher earners. I await the details of the final agreement, which I hope will be made available without delay.
The other key issue that I believe the Government has missed in the negotiations for the new pay agreement is the aspect of equal pay for equal work. I recognise that this matter is outside of the scope of FEMPI, yet it is a hugely important issue within the public sector. As we know, the three teachers' unions have signalled their lack of support for the draft agreement as it currently stands because it does not deal with this matter in a meaningful way. Teachers represent over one third of the public sector workforce and I simply cannot fathom why the Government did not address this issue. It is the single biggest issue that has caused so much unrest and disruption in the education sector in the past year. I truly believe the Minister has missed an opportunity to put this issue to bed. At this stage, I am not even sure it is as much a matter of money as it is one of respect. A firm commitment to the principle of equal pay for equal work, and a clear timescale for the delivery of it, would have been sufficient to take much of the heat out of this contentious issue. This simple acknowledgment of the legitimate grievance of newly-qualified teachers would have saved the Government, teachers and most importantly our children a lot of hassle and disruption. Instead, parents, students and teachers are facing into another academic year with the threat of industrial action hanging over them. The matter of equal pay for equal work cannot be ignored and must be addressed in a constructive and meaningful way.
I shall share time with Deputy Boyd Barrett and with Deputy Coppinger, should she arrive. The Deputy is not in the Chamber at the moment.
I welcome the public sector workers and pensioners who have come to the Gallery for this debate. I note also the absence of members of an Páirtí an Lucht Oibre - which translated loosely means the party of the working people - who are not here at all. Perhaps they are busy licking their wounds after the Jobstown verdict today. They are absent from the Chamber during a debate on an issue that very much concerns working people. This should be noted. I also want people to note the very low attendance at this debate. We would not be having this debate at all if were not for Deputy Boyd Barrett, who represents us on the Business Committee and who insisted that the renewal of the FEMPI legislation be discussed.
Under the legislation, all that is required of the Minister is to come back every year before the end of June to tell the House whether or not FEMPI is to be renewed. Extraordinarily, the renewal of this legislation is not voted on. It just gets through on the say-so of whichever Minister happens to be sitting across the House at the time. Members vote on the Offences Against the State (Amendment) Act each year. We voted on it last week. We do not, however, get to vote on FEMPI but I will table a motion that it should be voted on. At the Business Committee and with the Taoiseach during the week, there was quite an argument to the effect that we should not take a vote on a motion in that respect. We must ask why this is so. It is because it is very sensitive and crucial legislation. It is draconian and unfair. It attacks one sector of the working population in the State consistently every year. It is being pushed as emergency legislation outside of an emergency; it is the longest duration for emergency legislation in the history of the State. Is it not extraordinary that we allow this legislation to remain in force in such a manner, without even a vote on it?
I would like to say, however, that I am somewhat surprised at Sinn Féin. I understand Fianna Fáil being as blueshirt in its approach to workers as the blueshirts themselves are, but I am surprised at Sinn Féin's attitude-----
That is absolutely untrue and I want it withdrawn from the record.
I want to make the argument-----
Deputy Bríd Smith should not-----
It is absolutely not true.
Will the Acting Chairman stop the clock please?
Deputy Bríd Smith must please not invite responses from anyone else.
Will the Acting Chairman please stop the clock?
The Deputy will proceed with her business please and she will be heard. However, she must not enter into a wrangle with anyone else.
The Deputy should make her own points and not try to characterise Fianna Fáil as something it is not.
That is an extraordinary instruction and one which has never been heard in this House. It is an extraordinary instruction.
The Deputy should speak for herself. She specialises in it.
I am told it is Deputy Niall Collins' speciality.
Let us move on please.
The Deputy is well able to criticise others.
Shout me down but I will continue to make my argument.
To Sinn Féin and anybody else who is listening to this debate, I wish to state that talk about unwinding FEMPI in one go, proceeding with a gentle unwinding of it or easing an item of emergency legislation out of existence is nonsense. FEMPI must be got rid of. I say this not just because it discriminates - it creates unequal pay and has kept public sector workers and pensioners in a low-paid prison. It also discriminates against trade unions from the point of view of negotiation. As a result of the penalties contained within FEMPI, unions have their hands tied behind their backs when they enter into negotiations with the Minister. The evidence of this lies in the history of the ASTI and its relationship with the Lansdowne Road agreement. The ASTI has been absolutely penalised and sent to Coventry because its members rejected the Lansdowne Road agreement. Unions will be voting on this deal over the next few months and I will encourage them publicly to reject it. It is unfair to their members, the pay rises are paltry and by the end of 2020, they will have achieved less than reckoned inflation. With this deal, we would be cementing austerity. Millions of working hours would be given for nothing - on a permanent basis - by workers in hospitals, schools, local authorities and so on. I reiterate - millions of hours for nothing.
Austerity is being made permanent with this deal. There is austerity in pensions because the pension levy is being made a permanent feature for public sector workers. Therefore, it is really important that unions think very carefully about this. I am surprised by some of the unions enthusiastically endorsing this deal but I am also delighted that some have enthusiastically asked members to reject it on foot of the permanent method of austerity enshrined in it. That is what I would say to Sinn Féin and the majority of workers. We should get rid of the FEMPI legislation so we are not tying workers' hands behind their backs in negotiations. Once it is eliminated, workers would be on a level playing field in negotiations and in a position to argue that highly-paid workers should not get full restoration.
I am not sure the Deputy heard us correctly.
Deputies and Secretaries General should not get restoration but the lower paid should. The legislation is based on a series of lies. The first is that the financial emergency and the recession were caused by overspending on public sector workers. That is not true. However, the solution was to cut pay, pensions and working conditions. These people include nurses, doctors, firefighters and teachers; those on whom the State relies. We were told that they bankrupted the country and that we had to go after them and their gold-plated pensions. I do not think so. The one person who will go with a gold-plated pension is Deputy Enda Kenny when he retires. He will probably do that soon and he will have a very nice pension.
More lies are required, including the pretence, as has been mentioned, that we are in a financial emergency. We are not. The gentle unwinding of the FEMPI legislation is forcing these cuts. We were told that the roof would fall in if we eliminated the legislation and Brexit is being used as a stick with which to beat us.
The Deputies campaigned for Brexit.
The most pernicious lie is when we are told that if we restore the rights of teachers and firefighters, we would have to cut services. I have spoken about how 11 beds have been cut from the Linn Dara unit because the HSE cannot recruit or retain nurses to provide adolescent psychiatric care. This is because the HSE does not pay nurses enough and treats them unequally. As a result, nurses cannot afford to pay the rents being charged in this country. Services are being cut when their pay is cut, and this is happening particularly in the health sector.
It is amazing how commentators who want to go after the public sector do not give a damn about the homeless and vulnerable most of the time. When it comes to restoring pay, however, they say that it cannot be done because it would hurt the homeless and vulnerable and that we must look after them. They argue that if we restore pay, we would have to cut fire and health services even more. The hypocrisy is astonishing. The choice is not between these workers and the homeless or the sick but rather between the vulnerable and the wealthy, such as the bondholders and developers whose profits and dividends are back to pre-2008 levels. The issue is not that funds are unavailable but, rather, that there is no political will available.
I can provide two examples. We have written off the debts of employers who claimed insolvency and failed to pay their workers' redundancies. We will deal with a redundancy Bill during Private Members' time later. We continue to give tax breaks to vulture funds and real estate investment trusts, and we give charity status worth billions of euro to vulture funds that make billions from property that is practically being given away to them. The real purpose of the FEMPI legislation is not to save money for the State, because it does not have to save money on public sector workers. The FEMPI legislation is putting down a benchmark for all workers, in the public and private sectors, indicating that their rights and pay are to be curtailed. I can see how this would spill over to the private sector, particularly in regard to pensions. Irish Life has a solvent pension fund with much money in it but it is being cut to bits and the defined benefit scheme is being taken away from thousands of workers. The company is taking its example from the top. The fish rots from the head and the Minister has given private sector employers a good example of how to go after workers' pay. This is a gross injustice.
In the public sector, 40,000 pensioners who have given this State great service but who have retired from work will die and never get the restoration of the pay they deserve at the current rate at which the FEMPI legislation is being unwound. At the other end of the spectrum, young workers are grappling with rents and the cost of living. They are being told that pay equality is something we cannot afford. Many of them will lose at least €100,000 in the course of their working lives as a result. The recession has seen massive increases in attacks on all workers in precarious employment and low hours but all aspects of this happening in the private sector can be seen with the FEMPI legislation. By forcing these cuts and using State legislation against public sector workers, the Minister is effectively colluding in a race to the bottom, all in the name of keeping things competitive. It is outrageous that anybody who claims to represent workers could fall for this nonsense. The worst lie trotted out is that people must be paid at a lower rate in order to keep services running. We can look at losses suffered by low-paid workers and find that those earning approximately €25,000 per year have lost nearly a year's wages already because of this legislation.
I wish to move a motion that is on the Order Paper. I will not read it because it will eat into Deputy Boyd Barrett's time. It is signed by many Deputies but I am sure we will not get to vote on it.
These are statements and there is no provision to move a motion.
As I stated during the week, it is the hallmark of a tin-pot dictatorship to retain emergency legislation after the emergency is officially over. Mubarak did it for 25 years and it is done in all sorts of tyrannical and dictatorial-----
North Korea.
Yes. That is what is being done, as this is emergency legislation when the emergency is over, even according to the Government. What is the legislation designed to do? It is to bully and intimidate public sector workers, create a two-tier pay structure and accelerate the race to the bottom. The FEMPI legislation is a textbook example of what Naomi Klein called the shock doctrine. This was exploiting a crisis, seeing it as an opportunity to take advantage and do something that Fine Gael and Fianna Fáil always wanted to do but could never get away with except within an atmosphere of crisis.
That is complete nonsense.
It was a neo-liberal wet dream and the parties want to hold on to it.
Does the Deputy wish to explain why he campaigned for Brexit?
Never mind the wet dreams, the Deputy should continue with the debate.
The truth hurts.
The Deputy has two minutes and 58 seconds remaining.
We are owed at least one minute.
That is because of the interruptions.
Fianna Fáil caused the crisis. They have a hard neck.
They have indeed. At the end of this so-called pay restoration, public sector workers will still earn less than what they earned in 2008, when Fianna Fáil started it and before Fine Gael continued the latter's policies. That is shocking. This affects our young teachers, nurses and, let us not forget, the ushers who come in here and who have also been affected by a two-tier system, along with service workers. They effectively see a yellow-pack and low-paid grade that is enforced by this legislation. These workers did not have a single shred of responsibility for the economic crisis.
How did the people who scapegoated the public sector workers and who wish to continue to do so treat the those who actually caused the crisis? How did they treat them during the emergency years? They did not touch them. It was the one red line. We rolled over and accepted every element of austerity shoved down our throats by the troika. However, in the context of one issue, the Government stated there was a red line that would not be crossed. It would not increase the tax on corporations by one cent. How did those corporations in the interim? Their profits went up every single year from 2008 onwards. Gross pre-tax profits from 2008 - there was one fall in that year - went from €65 billion to the current figure of €95 billion. That is how well they have done, and they are only paying approximately 6% in tax. The Government will not take an extra cent from them but it wants the right to retain emergency pay and pension cuts, along with a two-tier apartheid pay structure for low-paid public sector workers.
I do not agree with Sinn Féin's argument.
If we taxed the people in those corporations which were the culprits, namely, the banks and developers, and all those who are getting unknown billions in tax breaks in the property sector through section 110, we could easily restore all the cuts. Of course, we would not give pay increases to people in excess of €100,000 - we would take it through a tax on higher incomes. However, the Government does not want to do that or even talk about it. This was always about using the atmosphere of crisis to keep workers down and it still is. The cost is not just felt by the workers. It is linked to the current housing crisis because workers' pay does not enable them to pay their rent or get a mortgage. It is directly related to the health crisis because we cannot get nurses and medical professionals to work in our health services, on account of not paying them properly.
Deputy Boyd Barrett never told us why he campaigned for Brexit.
It was because we do not believe in EU austerity.
I apologise for missing the opening statement of the Minister but I was at a meeting of the justice committee all afternoon, which has just finished. It is a bit of an affront to call this emergency legislation and it is an insult to people. There are real emergencies in Irish society such as the mental health crisis, the housing crisis, the bed crisis in our hospitals and many others for which there is no emergency response and for which no immediate actions or solutions are offered. Where are the sweeping powers to deal with them? Seven years after its introduction and three years after Fine Gael Ministers started to claim the crisis was over and everything was grand, it is shocking that the Government still relies on emergency powers to implement this portfolio.
The Minister and the Government are trying to create a scenario that would have us believe we are always on the brink, balanced on the edge forever in the need of undemocratic and drastic measures. The Minister said we were beginning a process of exiting FEMPI but a lot of people are very doubtful about that because the reality proves that there is no such intention. In fact, FEMPI has been a cover to bring in structural reforms to the Irish economy to undermine public services and workers' pay and facilitate a race to the bottom for which many in society are paying a price.
The actual Emergency in this State, which led to the Emergency Powers Act 1939, lasted for seven years during a real emergency, namely, the Second World War, but FEMPI has been in place for seven years without an emergency. This step has been taken at the expense of the democratic process because it is about hollowing out public services and replacing political decision-making with economic decision-making. It makes neoliberalism compulsory and the bureaucratic reforms undermine not just the democratic process but also people's financial security.
The Minister is well aware of the report released two days ago by Aviva that revealed the extent of deprivation in this State, with more than 1 million adults struggling to make ends meet. Two thirds of those who are struggling see no prospect of an improvement in their personal circumstances, which tells us quite a lot about the damage that has been inflicted. Even in the dire times of the 1930s, the 1950s and the 1980s, when people were emigrating, people still had aspirations about improvements being made in their lives but those aspirations have now been largely lost, an incredible indictment on the existing political establishment. The generation of today faces the prospect of being worse off than their parents. Secure full-time jobs are diminishing at an alarming rate, no matter what time a person gets out of bed in the morning. Access to decent education is very much under threat because of austerity policies which cut structural investment, enforced a recruitment embargo and downgraded teachers' pay and conditions in 2011.
FEMPI has not made a positive contribution to the Irish economy, not least in respect of the people at the receiving end of its policies. It did not stop inequality and contributed to the reality highlighted by TASC that Ireland is the most unequal society in the EU. In the time of FEMPI, jobs to which people, in years past, would have aspired such as teacher, garda or nurse are now gone - they are an illusion. A nurse trains here at the expense of the Irish taxpayer and goes somewhere else to get a job because a nurse will not get a decent job in Ireland. A teacher, who is charged with developing our young people, is treated like dirt if he or she is recruited under the present regime. However, while all this austerity was being imposed, the top 1% saw their share of wealth go from just over 10% to 12% between 2015 and 2016. This money could easily have been used to restore what was taken from public sector workers but this is an ideological crusade and driving down wages, conditions and job security in the public sector was followed in the private sector. A garda and a nurse who want to set up home together now have no hope of buying or renting a house in this city because wages have not caught up with prices. On top of that there are insurance costs, child care costs and other austerity measures.
We now have labour market flexibility, job insecurity, low direct taxation, stealth charges, privatisation and the growth of an unfettered financial sector, which has facilitated the transfer of wealth. There are huge structural problems in the Irish economy but the crash, for which we are allegedly now paying the price, was not created by public sector pay or by teachers or nurses or firefighters, yet it gave the Government a new emergency which it used to drive reforms. It has negatively impacted on the quality of life of all citizens and the fact that 80,000 people left the country did serious damage to communities and public services. I did not believe the Government had any justification for cuts in 2010 but even if it had some, it certainly does not have any now. The Act is grossly unfair and entirely inequitable, in that it impacts on the weakest sections of society, low-paid workers, retired people, families with children with special needs and those who rely on care in the home. The targeting of low-paid and middle-income workers in the FEMPI Act is particularly repulsive and has been one of the key contributing factors to the growth in deprivation we have witnesses and which now are an established fact in Irish society. By taking money out of the pockets of lower-paid workers, the Government is effectively taking money from the local economy and all the rot that sets in consequently.
We need to look at inequality in terms of spending power because disposable incomes have been shattered, as compared with gross salaries, by the breadth of the crash and austerity policies. Average rents across Dublin are astronomical and someone with an average gross salary of €45,000, which does not include many in our public sector, would have to pay over €13,500 in rent per year, that is, over one third of their gross pay. It is sick and does not happen in any other European country to the same extent as it does here. The cynical increase in hours to squeeze free labour from public sector workers is particularly offensive and was a very harsh and cruel measure.
It is somewhat ironic that the trade union movement peddled itself on trying to transform conditions for workers by developing the idea of work-life balance. The squeezing of workplace flexibility hit those with children the hardest. They have to collect their kids and pay extra for childminding but they lose out on the time they need to spend with their children, adding to greater pressures at home and so on.
I welcome any measure that puts money back in workers' pockets, but the latest round of proposals leaves an incredible amount to be desired. It dangles the tiny carrot of repaying what was stolen from workers in the first place but makes the robbery of additional hours of free labour from people a permanent fixture of their working conditions. There is no such thing as a free lunch but the few bob being thrown back here is an extortionately priced lunch at the expense of workers' conditions and extra free labour. It turns the pension levy into a permanent cut that will be in place forever. The average public sector worker will be worse off as their 4% rise in wages is less than the projected 4.5% inflation rate over the lifetime of this deal. People are being asked to vote to make themselves worse off.
If I worked in the public service, I would reject this deal and vote accordingly. Unions need to deliver a far better deal for their members because in doing so for their members, they will do so for society, which needs a healthy public service operated by well-paid, secure, permanent, pensionable employment. It used to be seen as a right that even if one were not great at school, one could leave one's job, get a job in a county council, possibly get a council house and that one's children could then go on to be educated, better off than their parents and aspire to do better. All those aspirations have been stood on their head. Undermining the public service is the bedrock of the counter revolution that has taken place in society to the detriment of our young public sector workers in the main on the one hand, and pensioners on the other. In that respect, the deal is reprehensible. I hope it is rejected. It is insulting that people's working conditions are being dictated under the guise of legislation brought in for an emergency. This deal scapegoats people and society. It is unacceptable, particularly in light of the Government's protestations about how well the economy is doing. I hope the deal is rejected. It should be withdrawn in its entirety and unions should once again be able to negotiate their own rates and conditions.
It is disappointing that this debate is only for statements to be given rather than a debate on which Members can vote. That was explained in the House yesterday by saying that last year there were only statements on this issue rather than a debate and the same formula is now being followed. However, last year statements on this issue were made after 30 June when the legislation had been renewed and consequently there was no point in having a debate. It is disappointing there is to be no real debate this year. The debate last year took place in early July if my memory serves me correctly.
The legislation urgently needs to be reversed because the financial crisis is over. I agree with Members who have said that the legislation is being carried on for reasons other than a financial emergency. It is and was draconian, similar to that which would be introduced during wartime rather than a financial crisis. It has been overplayed and needs to be reversed. It appears from the Minister's speech that this will not be done until 2020, which is far too distant. It has enshrined unequal pay in the public service.
Pay equalisation is urgently needed. It is a huge issue for nurses, teachers and gardaí. It feeds into the recruitment and retention of essential staff and services because unequal pay is driving people out of this country. Nurses and doctors, who can work anywhere in the world in a global market, are being forced out of this country because of unequal pay and the legacy issues of FEMPI. Many midwives are leaving the country or the profession because of their working conditions and the responsibility they are expected to take on and the unequal pay they receive while working alongside colleagues who are getting standard pay rates. FEMPI is feeding into the difficulty in recruiting and retaining staff. It has huge legacy issues going far beyond pay. This draconian measure is being continued long beyond the country's financial recovery.
FEMPI was disproportionately applied to general practitioners in an unfair and careless manner. GPs are paid a global fee, part of which is their income but a substantial part of which is the finances they are given to run their practices, yet FEMPI was applied to the entire fee. GPs have suffered a 38% reduction in the finances they get to run their practices. No small business could sustain such a reduction for more than a year or two, but for many years GP practices have been subject to that. It cannot continue. FEMPI is a principal cause of the huge manpower issue in general practice. There is also the issue of outdated GP contracts, as Members understand and has been discussed in the House on many occasions, but FEMPI has torn the heart out of general practice and made it non-viable. GPs cannot run a practice with a 38% reduction in their overall income year upon year. Therefore, they are retiring or emigrating to the Middle East, Canada and Australia. Young GPs are looking at how general practice has been destroyed by FEMPI and thus are not taking up GP lists. There is, therefore, a huge manpower crisis in general practice.
The Committee on the Future of Healthcare has spent 11 months producing the Sláintecare report, which recommends that there be a shift from hospital-centred care to primary and community-centred care. Who does the Minister think is going to deliver that service? To deliver the service recommended by Sláintecare would require 1,000 extra GPs. With the country's ageing population, it is crucial that there be a shift from hospital care to primary and community care. Demographics show that it will not be possible to sustain the health service unless chronic illness is dealt with outside the hospital system and looked after in communities and in primary and social care. A critical component of that strategy is the retention and recruitment of GPs. That cannot be done while FEMPI has reduced the amount of funding for general practices by 38%. GPs are effectively civil servants, and as eligibility for GP services is extended to greater numbers of the population and eventually the entire population, GPs will be fully paid civil servants and they cannot run their practices on an income that has been reduced by 38% by FEMPI. It has been disproportionately and unfairly applied to general practice in a very uncaring manner. I urge Deputy Donohoe, as Minister for Finance and Minister for Public Expenditure and Reform, to look at this issue specifically because our health care system is in crisis. It cannot continue in its current form. There must be recruitment and retention of general practitioners but FEMPI has torn the heart out of general practice. By not reforming our health service, we are being disingenuous and unfair to our population and to patients.
It is an issue of human rights now. The way our patients are treated in our health service is so poor. While many parts of our health service are functioning very well, there certainly are many areas in which the human rights of patients are being infringed on. FEMPI is a huge part of that and I urge the Minister to look at it, in particular with regard to general practice.
I too am discussing the savage cuts implemented under FEMPI legislation. I find myself in the unusual position of agreeing with most, if not all, of the elements of the motion on FEMPI that has been put down by Solidarity-People Before Profit. That is unusual as Deputies Bríd Smith and Gino Kenny would agree. I agree with them that the justification for the introduction of the Financial Emergency Measures in the Public Interest Act 2009 was the economic crisis and financial emergency which beset the country and that by the Government's own pronouncement, the financial emergency has passed.
The Minister spoke during the last election about recovery but he forgot that it did not travel out beyond the Red Cow roundabout. The Financial Emergency Measures in the Public Interest Acts 2009 to 2015 have been used to cut public sector workers' pay and pensions, as well as those of general practitioners, GPs, among others. The emergency legislation that curtails the rights of workers to free collective bargaining can no longer be justified. The continued use of emergency legislation in the absence of an actual emergency is an abuse of Government power. Anybody would know that. I had children here today from first and second class who knew that. It is wrong.
One example of the way that FEMPI has lead to serious consequences in terms of the health infrastructure is the cuts that were imposed on general practitioners. The Minister might think that myself and Deputy Harty prepared our speeches together. We did not even discuss it. The National Association of General Practitioners, NAGP, has called on the Government to urgently reverse financial emergency measures in the public interest, namely, FEMPI fee cuts in general practice. The GP representative body said that general practice has suffered disproportional funding cuts of up to 38% under FEMPI. My colleague, Deputy Harty, referred to this as well. The NAGP has also said that FEMPI is a key factor in the high rate of emigration among GPs as the profession is now not viable in Ireland. We see that every day in rural Ireland. We cannot get doctors or GPs to apply for practices. Does the Government not care about the impact of this or about the health of our people? The NAGP chief executive, Mr. Chris Goodey, has stated that FEMPI is driving young GPs abroad in search of better terms and conditions. We invest a great deal in training our young GPs and nurses but newly-qualified doctors have demonstrated a lack of faith in the viability of general practice. In 2017, for the first time, ten GP training places have remained unfilled.
It is time to sit up and smell the coffee and for some fairness. We have heard the new Taoiseach - who has proven that he is the same as the last Taoiseach despite only having been in the job for two weeks - say that he wanted to represent all people in Ireland. He is not representing the front-line service workers in our hospitals. The trolley crisis worsens in the middle of summer. The last Taoiseach made many commitments and even had a poster on a billboard saying he was going to get rid of the trolley crisis. We cannot get the doctors and the doctors we have are being mistreated. We cannot get the nurses but we have no problem getting managers. There is no problem in getting them. There is a plethora of them. There were 9% more managers in the HSE in 2016 compared with 2015. We need to be fair and respectful of these people who put their shoulder to the wheel and took the cuts.
We all supported the cuts because they were needed, yet we have been talking about recovery for years. If it is a recovery, why is this emergency legislation still in place? I compliment Deputy Boyd Barrett, who in fairness has been fighting for this debate in the Business Committee for the past two months. The Minister did not want to have it but here we are. Is he listening? Ba chóir don Aire a bhéal a dhúnadh agus éisteacht. I hope the Minister is listening because he has not listened to the people or the message he was given after the last general election and he is not listening now. This is wrong and he can make it right. The emergency is well over and we need to be respectful of the people. These are working people who want to work, including GPs, front-line service staff and many others. People cannot live like this. It is foolishness.
As for taking 38% out of a GP's practice, it is obvious that no member of the Government ever ran a business because that provides the income they use to pay all their staff. General practitioners are business people. They are small businesses in every town that pay rates, taxes, heat, light, staff, other doctors and nurses. They are huge employers who operate in my home town and they are being mistreated by the Government. In turn, there are people who cannot access GPs at all and cannot get transport services to the GPs in the towns. Does the Minister want people to lie down in the ditches and die like they did in the Famine? The way the people are being treated is outrageous. Members in this House are being treated poorly as well, with the attempts to vote this legislation through time after time each year. It is wrong and it can never be made right.
FEMPI should be wiped away. The Minister tells us about growth rates of 6% or 12% and that we are the fastest-growing economy in Europe. He is telling lies and porkies. He contradicted himself here this evening because if we have that kind of growth, why do we need financial emergency legislation? If we have a real emergency, the Government will not get co-operation from this House to pass legislation because it is pulling the wool over people's eyes here. It is codswallop to tell us we need this legislation when we do not. The Minister is now the Minister for Finance as well as being the Minister for Public Expenditure and Reform. Being in charge of both Departments amounts to smoke and mirrors. We have a budget coming with less and less so called fiscal space. The Minister should be fair, honest and respectful of the Opposition Members here who want this to be changed. They want the Minister to state the emergency is over and an attempt must be made to loosen the purse strings. If the Minister was ever in business, he would understand that constant cuts are not going to succeed. He has to stimulate the economy and allow the people who have been affected by all of this to be able to spend again, to be able to have a holiday, to pay their mortgages and be able to put food on the table and perhaps eat out occasionally and to go out and buy some of the commodities that they are not buying now or have not been buying since the recession, as well as to support all the local shopkeepers who all pay VAT, other taxes and rates. They must be able to thrive, or rather to survive again. It is not rocket science. This is not genius talk. If the Cabinet had an understanding of how business works, it would understand that. Allow the people to have spending power. Allow them the dignity of having a decent wage without this financial emergency legislation taking a big hole out of it and allow them to have an economy that is going to work and help them to pay their taxes. Revenue income has fallen this year in spite of the vigorous and aggressive policy of Revenue of pursuing self-employed people in particular, that is, those who are the generators of business and jobs. Look at all the money paid to get foreign direct investment.
Stimulate the people. Allow these workers, including GPs, their staff and all the workers who have been suffering here, to be able to have a dignified wage, a fair day's pay for a fair day's work and to go out and stimulate the economy again. They will put their children to education in order that we will have young doctors and nurses trained again who will not all want to go on the aeroplane the minute they finish because of the regressive and penal type of legislation we are persecuting them with in a charade that has lasted three or four years too long. We have put up with what we have had to put up with. We have put our shoulder to the wheel. It is time the Minister, in advance of the budget, started to think about supporting these people again. They are not looking for anything except fair play. Fair play is fine play by me.
The draconian cuts in pay and pensions were introduced at a very different time in this country. There was a financial emergency and there may have been some kind of justification for the cuts at the time. The public expected the Government to deal with the awful situation in which the country found itself but it expected this would be done in a fair way. Unfortunately that was not the case. When we look back at who paid the biggest price, it was those who were least able to afford it. The burden of austerity did undoubtedly fall disproportionately to those on low and middle incomes. The FEMPI cuts on public service pay and pensions were drastic and people on fairly modest incomes and pensions were hit with this huge cut in their take-home pay. At the same time, they were hit with a raft of charges. It was a double whammy for many of these public service workers and the result of that undoubtedly decimated many people's standard of living. That was particularly hard to take when there was a very strong sense within the country that the cuts were not being applied fairly and that there were still sections of Irish society - to a large extent the better-off sections - that seemed to be escaping without having to shoulder that burden at all.
We have come through a number of years with those FEMPI cuts and there is no doubt it is time to unwind them fully. I do not understand why we have to wait until 2020 for pay to be fully restored. The approach should be to prioritise those on modest and low pay. That has not been the case. It was a mistake last year to announce that Deputies would have full pay restored in two lots and many others with similar pay, senior civil servants, principal officers and higher grades within the Civil Service were to have their full pay restored but that was a mistake.
Not true. That is wrong.
People at that level could have held off for longer and priority should have been given to other sectors within the public service. The unwinding of FEMPI is taking too long for people on middle and low incomes.
The glaring area that needs to be addressed is new entrants.
Hear, hear.
That does not mean everything else is fine. I and others have received letters from pensioners in their late seventies or eighties regarding the pension levy. There is something very wrong about such people having to pay a pension levy.
New entrants have been treated disgracefully by the FEMPI cuts. There is a pay generation gap where people are receiving unequal treatment. We are saying it is somehow okay to saddle young people, who are doing the same job, with a bigger burden than middle aged or older people because of a particular event in our economy. There is no justification for that. It is bad enough that the middle-aged generation and older people have saddled young people with enormous debt as a result of the bank bailout. That will have implications for their lives and the country for many years to come. To also say to them they will take the brunt of public sector pay cuts because of their age is completely unfair. It represents the most appalling slap in the face for the young generation. They already feel let down by their elders who made a mess of the economy, who let it rip and were prepared to stand by while the property bubble grew year on year until the country was brought to the brink of disaster and is now saddled with enormous debt for the future. Not only did our generation let down the people coming up behind us, our sons and daughters, but we told them they will pay a bigger price than anybody else. That has caused enormous division within Irish society. Many young people deeply resent what their seniors in politics have done to them. There are cohorts of Irish people in their twenties living in London, Canada and Australia who feel deeply let down by the political system. They regard this two-tier pay system as a slap in the face.
Not only are we telling them that jobs were not available in the years when there was no job growth, forcing them to emigrate but also that if they come back and work here huge problems are stored up for them, namely, lack of access to housing, whether to buy or to rent, the cost of insurance, health care and child care. That is very little encouragement for those people to come back.
My principal concern is about those who stayed behind and continued to run the public service, those who were recruited after 2011 and were treated disgracefully. Those people, on significantly lower pay than their older peers, have now to contend with all those increases in the cost of living. Housing is unaffordable for most people younger than 35 years of age. It is increasingly difficult to put a car on the road because of the soaring costs of insurance. People who have what would have been regarded as decent jobs, such as teachers, nurses, gardaí and others and who in the past could have aspired to doing what people in their twenties and thirties expect to be able to do, namely, save to buy a place of their own, get married, have a family, the normal things that the older generation took for granted, find those normal things are no longer available to many of them. They cannot afford to have normal aspirations on their reduced pay scales. We have all heard from those people and felt that we have abandoned them. They are the abandoned generation who have been left to muddle on and have a strong sense that their seniors in their own professions, in trade unions and particularly at a political level were prepared to pull up the ladder behind them and tell them they could fend for themselves, they could swing for it. That is no way to treat the younger generation and we will pay a price for that. It greatly contributes to a sense of division and lack of cohesion within Irish society.
I received an email from a young teacher stating that in the first year after he qualified he was lucky enough to earn €19,000 on part-time hours. He got full-time hours, his workload has increased, his rent is skyrocketing, he can barely afford to put a car on the road because his insurance has doubled in three years. He is working next to people who do the same work but earn substantially more than he does. He claims that while it may be difficult to make the case to the Government, it is incredibly difficult to work in a profession that on the face of it values equality so much but values its newly qualified staff so little. He says they are not pawns, they are human beings, with lives to live. He says he qualified as a teacher and in June he will have two post-graduate qualifications but every year his salary is down approximately €8,000 compared with his peers. He has already personally sacrificed €20,000 for the State and that is before even discussing pensions for new entrants. He believes he has sacrificed enough. He wants the public sector pay talks to unwind FEMPI and deliver full pay equality for public servants hired since 2011.
We know, however, that those pay talks have not done that. Far from correcting the mistakes that were made in dumping on the younger generation in previous pay talks, the latest talks have compounded that division. There is now a nod in the direction of the two-tier new entrants. It is interesting to note what the agreement said about them. It states, "Accordingly, it is agreed that an examination of the remaining salary scale issues in respect of post January 2011 recruits at entry grades covered by parties to this Agreement will be undertaken within 12 months of the commencement of this Agreement."
As such, it is an examination within 12 months. The agreement also states, "On conclusion of this work, the parties will discuss and agree how the matter can be addressed and implemented in a manner that does not give rise to implications for the fiscal envelope of this Agreement". What we are saying is that we will examine it for 12 months and then discuss it to see how this issue might be addressed within the fiscal envelope. That means we will see how it might be addressed without it costing any more money. To my mind, that is to dump for a second time on new recruits and to deepen the generation gap which has been allowed to develop within the public service. That is disgraceful. It is absolutely right that the teaching unions are opposing the agreement. One teacher - an INTO representative - spoke to me last week about a situation in his school where almost half of the teaching staff next year will be new recruits. He asked how the established staff could possibly sell their colleagues down the river by agreeing to this. That mistake was made in the past and it should not be repeated. One cannot abandon people like that; one cannot abandon colleagues.
I want to speak briefly on the impact of FEMPI on people working in the health service. It is especially the case that nurses have voted with their feet and gone abroad. Nurses, teachers and many others are going off to Dubai and Abu Dhabi where they have the opportunity to raise money so they can lead normal lives by buying homes or considering starting families. It is those normal things they are not able to do here. In the medical profession, consultants have been particularly badly treated, with the creation of a 30% pay gap between new entrants and existing staff. That is certainly a factor in so many going abroad. There is also a very serious problem in general practice. Through the years we have been saying that we must reorient the health service and that general practice and primary care must be the key drivers and service providers for the health service. That is the rhetoric, but the action has been to cut the incomes of general practices. General practice has been more deeply impacted upon by FEMPI cuts than perhaps any other sector. It is not just about GPs' incomes but about those critical practice supports which are so essential to the provision of capacity within primary care to provide services at the most appropriate level locally and in the community. Is it any wonder people are going abroad to develop careers as medics in countries with properly functioning health care systems and clear plans and where they are treated with respect and valued? Unless we address that, the haemorrhage of staff will continue.
I thank all Deputies for the contributions they have made in the course of the debate. I want to address some of the claims that have been made about the path of action I am taking on behalf of Government if such a path of action is endorsed by a majority of the unions that are currently balloting on the extension of the Lansdowne Road agreement. I wish to record a number of points which have not been acknowledged by Deputies as they have been criticising me during the debate. Many Deputies referred to the impact of the public service pension reduction, PSPR. I did not hear from a single Deputy who raised this point the fact that by 1 January next year, the PSPR will be eliminated for anybody with a pension of less than €32,000. If one is in receipt of a pension of less than €32,000, the pension reductions which were regressively in place as a result of the crisis will be gone by 1 January next year.
Is that the whole lot of it?
I do not even think many of the Deputies criticising me were aware of that-----
I am aware.
-----let alone bringing up the fact that it will be gone. As part of my commitment on further steps, I will be meeting the representative bodies for pensioners in the coming period, as I promised to do. I have already met some of them. I will look at what further progress we can make on this. It is also a point which has been raised by Fianna Fáil in the context of the confidence-and-supply agreement we have with it and we will be looking to see what further progress we can make in the area. It is truly extraordinary, however, to hear Deputy after Deputy, particularly some on the far left, stand up and criticise where we are on pension provision without ever mentioning the fact that by the start of next year, those pension reduction measures will be gone for anyone earning less than €32,000.
Claims were made by Deputies, more on the basis of rhetoric than any sense of fact. A number of Deputies appear to believe they are doing their jobs by making themselves hoarse as opposed to referring to the facts which lie at the heart of the debate. At the culmination of the proposed agreement on the extension of the second Lansdowne Road agreement, many of the lowest earning people in our public service will no longer be dealing with the challenges of restoration. They will be seeing their wages increased beyond where we were when we started the horrific journey of the crisis. Again, these are facts which were not acknowledged by many of those who claim to have a monopoly on representing those who work within our society. At the culmination of this extension, many of those with the lowest incomes will not be on a restoration agenda but will in fact be on an agenda of wage increases versus where we were when we started all of this. That is fair, it is what they are entitled to and it respects the fact that some of the work they do is the most difficult and that the challenges they face are the most acute. We are doing that. Again, it is a fact that was not acknowledged at all by those who are the harshest in criticising what we are looking to do.
Another fact not mentioned by those Deputies who have been loudest in criticising the legislation is that this is an agreement which, if endorsed by public service union members, will look to deliver higher benefits to those who have joined since 2013 versus those who joined pre-2013. One can make the case that it does not do enough. That is legitimate and Deputies are, of course, entitled to that view. To fail to make any reference at all to it in the contributions, however, demonstrates that the only claim of the Deputies is to play to the gallery as opposed to representing those who are in it.
With respect, some of us mentioned it.
In fairness, Deputy Cullinane did do so, which I acknowledge. The fact is that those who joined pre-2013 will see changes in their wages of between 6% and 7.4%. Anyone who joined after 2013 will see wage changes of between 7% and 10% across the duration of this agreement, if ratified. That was not acknowledged by any of the Deputies across the House who claim to speak the loudest about those affected by the agreement.
I heard this evening the claim that we need to get rid of the FEMPI provisions immediately and swiftly from the same Deputies who a number of months ago were calling on me to develop a path out of FEMPI. Now that we are on the verge of potentially doing that, it is no longer good enough. What has to be done has to be done in a single move. Some Deputies are at least aware of the competing demands on the public purse. They make the point in different ways, while still criticising me, and say that we have to make choices. However, that is then offered up as some sort of evidence of betrayal of those they represent. Instead, what the Government - and some in the Oireachtas who are supporting us - is doing is trying to find a way to balance all the demands.
One particular matter that was raised on a number of occasions and which I have touched on is the difference between pre and post-2013 members of our public service. In the context of the call on me to deal fully with the difficulties in terms of different wage curves and increment levels within our public service, depending on when they joined, Deputy Cullinane did at least acknowledge the cost of that in a single year. It is €206 million. He acknowledged it and, in fairness, he has called on me to provide that information on a number of occasions.
He is a good Deputy.
This illustrates the challenge in seeking to make progress on this issue. A 1% change in the cost of all of the public services in our State would be €160 million.
Buttons.
Is it buttons?
Yes, if the corporations were taxed.
One speaker, Deputy.
That says something about the value the Deputy places on the public purse.
Magic money tree.
It says something about her attitude to the journey our country has gone through that she describes €160 million as buttons.
I said buttons to the corporations.
I am sorry, but the Deputy had her say.
The Deputy did not say that. She is making it up now.
The sum of €160 million is the cost of a 1% increase to all of those who work in our public services. The cost of dealing with the issue of equalising pre and post-wage scales across the period of 2013 in a single year would be €206 million. If I had come into the House and said that I was prioritising dealing with that matter ahead of those others who work in the public services, I would be criticised for doing so and for not trying to find a way to unwind the FEMPI legislation.
The Minister said that last year.
If I had come into the House and said that I wanted to do both, let us be absolutely clear that the other changes we would need to make in our tax code and in how we provide services would also be rejected by all of those who are calling and arguing for all of this legislation to be abolished in one single move.
Tax the corporations. That is what we argued for.
For those who have made that call on me and who claim to stand up for and represent the workers, I will pay them a compliment that they will not afford to most other Members in this House. I will pay them the compliment of saying that I believe their desire to represent those workers is authentic. So is mine. So is the desire of other Members of the House who understand that there are trade-offs and choices to be made. It is in that spirit that I have looked to find a way of progressing the public service and wage agreements that we have with the unions. The inability of those who, again and again, have asked for a way out of the FEMPI legislation to recognise the fact that we have developed a path to do so is matched only by their unwillingness to acknowledge the facts that are contained in the agreement that is currently under ballot by the public service unions.