The Government decided some time ago that a revision of the allowances of Deputies and Senators, as well as the salaries of Ministers and of the Parliamentary Office-holders was long overdue and should not be further deferred. The outcome of the Government's thinking on this subject is set out in the Bill now before the House.
Allowances to members of this House were last reviewed in 1947. Senators are well aware that, while salaries and wages generally have been increased several times since, there has been no change in the allowances to members of the Oireachtas or in the salaries paid to Ministers and the holders of Parliamentary Offices. I need not labour the case that can be made both on the grounds of the higher cost of living and the increase in the volume of work to be done for an upward revision of Senators' allowances. The Bill provides for an allowance of £750 a year for Senators which is 75 per cent. of the new allowance for Deputies. This relationship was introduced in 1938 and it has been thought well to adhere to it.
In preparing this Bill, the Government decided to depart from the older arrangement of tax-free allowances. Deputies and Senators, in common with all members of the public, will now have to establish what proportion of the allowance payable to them can be allowed exemption from tax as an expense attributable to their duties as members of the Oireachtas and will be liable for income tax on the balance.
I am not, of course, able to say what that proportion will be, but if the sum allowable for expenses is assumed to be £300, then a single Senator with no other taxable income will pay £36 in income tax; a married man will pay nothing. If he has £2,000 he will pay roughly £635 or £566 respectively. The position is, therefore, that where the allowance is a Senator's sole income, he would gain under the arrangement proposed in the Bill. According as taxable income increases, of course, the bill for income tax mounts and the gain becomes correspondingly smaller.
The Bill provides for a salary of £2,000 for a Minister, in addition to which he will receive his Deputy's allowance of £1,000 the whole amount being subject to income tax. He will have to establish what remission is appropriate in respect of expenses in common with Deputies and Senators. At the moment, a Minister has £2,125 of which £625—his Deputy's allowance —is exempt from tax. If we assume, to take a figure, that he is allowed £450 for expenses, he will, if he has no other income, and is single, pay about £620 income tax on his £2,000 as Minister and £1,000 Deputy's allowance. If he has £1,000 from other sources, his tax will be about £1,150 if single and £1,050 if married.
There is, I think, no need to make the case for a review of Minister's salaries which have remained unchanged since 1947. The present salary level is inadequate in view of the high responsibility of the post and the standard of living which a Minister is expected to maintain. In comparison with comparable positions in industry, even the level of remuneration now proposed is very modest. It goes some distance, at all events, towards correcting the present position under which a Minister has less than the Secretary of his Department. The Bill increases a Minister's remuneration by about 40 per cent. but when income tax is taken into account, his net gain will be considerably less.
Suggestions have been made from time to time that there should be a pension scheme for members of the Oireachtas. It will be for the Houses themselves to decide whether they want any such scheme and, secondly, if they do want it, what form it should take. I have provided in the Bill that the Minister for Finance will have statutory authority to make deductions from the allowances of members of the Oireachtas. In the event of the emergence of the pensions scheme these deductions would be paid into a pension fund. The provision will become effective, of course, only if the Houses decide on having a contributory pension scheme. If they do not do so the section will be inoperative. If they do decide on a scheme, the statutory power will be available and it will not be necessary to introduce a fresh statute to meet the position.
As Senators will see, I have made certain increases in the pensions payable to former Ministers and Parliamentary Secretaries. The payment of these pensions has already been accepted in principle by the Houses in legislation, the underlying idea of these pensions being to compensate for the loss arising from the interruption of private business or professional occupation. It seems reasonable that the compensation for this loss should be somewhat increased in view of the change in money values since these pensions were first determined.
The Ministerial and Parliamentary Offices Act, 1938, enabled allowances to be paid to the Leaders of the two numerically largest Opposition Parties in Dáil Éireann, subject to certain conditions. These allowances are intended to go towards the cost of providing secretarial staff to help those Parties in the discharge of their parliamentary duties. Representations have been made to me that these allowances were inadequate. This Bill gives me an opportunity to meet these representations, to which I was sympathetically disposed. I am proposing to increase the amount available for the parliamentary expenses of Opposition Parties. In allocating this money, however, I am departing from the existing pattern and, instead, the total sum provided will be apportioned between the Opposition Parties which qualify in the manner set out in the Bill.
Since the Bill was published and during its passage through the Dáil, there has been little objection to the main proposals. Such criticism as there has been has taken the line that the Government might have been more generous in their approach. As I stressed in the Dáil, the Government have at all times been anxious to strike a balance in these matters between the members on the one hand and the general taxpayer on the other. I think that, by and large, this objective appears to have been secured in this Bill.
The White Paper circulated with the Bill explains in detail the various changes proposed and the ways in which they are linked up with the basic 1938 legislation.