It is a great pleasure to burn the midnight oil with the Members of Seanad Éireann.
We are all aware of the unprecedented difficulties we face in this period of serious economic distress and the urgent need to stabilise our public finances. We have had to take exceptional measures to respond to the challenges we face and many of the decisions the Government has been forced to take have involved significant sacrifices for those affected by them, because everyone has commitments.
When introducing the supplementary budget last April, the Minister for Finance stressed that fairness must be the cornerstone of all our efforts to achieve economic renewal. The Minister said that everyone wants fairness but that there is less agreement about what it means. For many, it is tempting to mean that the next person should pay, but the reality is everyone must give according to his or her means. Those who have most must give most. Equity demanded that when we asked anyone else to give, we in this House and in the Government had to examine our own remuneration and demonstrate that we were prepared to lead by example.
The members of the Government have already shown their willingness to give leadership in this area. They reduced their salaries by 10% last October. Ministers of State made a similar reduction. The public service pension levy was applied to members of the Government and Ministers of State. As a result, Ministers have seen a reduction of about one fifth in their incomes. In addition, the number of Ministers of State has been reduced from 20 to 15, a reduction of which I came out in favour last January, expressing a willingness, if necessary, to give up my position. There is logic to having an equal number of Ministers and Ministers of State and I am glad that the pre-1994 position has been restored as a consequence of this reform.
The Government also decided to introduce a number of additional changes to the remuneration of Deputies and Senators. These included the matters that are the subject of this Bill, namely, changes to the arrangement whereby former Ministers could receive ministerial pensions while they are still Members of the Oireachtas and the abolition of long service increments payable to Deputies and Senators.
Separate provisions are being put in place to give effect to other changes to reduce expenses, halve the allowances paid to Oireachtas committee chairmen and abolish the payments to Whips and vice-chairmen.
While the Bill has the effect of providing measures to reduce public expenditure, I appreciate they are very modest in the overall scheme of things and in light of the difficulties we are facing. Nevertheless, they represent a real and important contribution from the individuals affected. We all have an interest in not distracting from the value of the contribution made by Oireachtas Members because of side issues where the rationale, particularly in current circumstances, for the existing system is debatable. Under this legislation, from after the next general election, all Deputies and Senators, other than officeholders, will be paid the same, and sitting Members will not receive a pension in addition to salary by virtue of having been officeholders in the past. It is better for everyone concerned that, rather than any invidious finger-pointing at individuals who take up their existing rights, the system be changed to reflect what is right for everyone with limited transitional arrangements
The purpose of the Bill is to amend the Ministerial and Parliamentary Offices Acts 1938 to 2001 and the Oireachtas (Allowances to Members) Act 1938. It provides for cessation of payment of long service increments after the next general election for all Members of the Houses of the Oireachtas and for withholding long service increments in the case of those Members who would normally have qualified for them before the next general election. The same provisions will apply to Members of the European Parliament who are eligible to do so and opt to continue to be paid the same salary as Deputies, a matter we discussed a short time ago in another Bill.
In case anyone should think that Ministers or Ministers of State are somehow unaffected by this measure, I will read into the record the last paragraph of a letter I received a short time ago from the Minister for Finance:
Under the existing arrangements you would have qualified in the near future for a long service increment although it would not have been payable to you while you hold Ministerial office. However, I am writing to inform you that following the Government's decision you will not now qualify for a long service increment.
I would like to deal with the issue of the effect of this measure on the pensions of Deputies, Senators and MEPs who will lose their long service increments after the next general or European Parliament election. The position is that any Member who held long service increments before the cut-off date of 13 May 2009 will ultimately receive the benefit of them in their pensions. Appropriate arrangements will be made to this effect by amending the Members' pension scheme. The legislation requires that any scheme or amending scheme shall be laid before each House of the Oireachtas as soon as may be possible after it is made and if a resolution annulling it is passed within the next 21 days on which the Houses sat after it was laid before them, the scheme is annulled.
The Bill also provides that ministerial pensions paid to Members of the Houses of the Oireachtas and the European Parliament will be reduced by 25% between the passing of this Bill and the next general election in the case of the Houses of the Oireachtas, and in the case of the Members of the European Parliament, the next European Parliament elections. Such pensions will cease to be paid to sitting Members on the respective dates.
For the sake of completeness and transparency, I would like to inform the House that it may be the intention of the Minister to introduce an amendment on Committee Stage in the Dáil to permit changes to be made to the present parliamentary allowances system such as may be agreed between the Minister and the Commission of the Houses of the Oireachtas to be introduced by regulation. However, consideration of this is continuing and should such an amendment be tabled and made, then this Bill would have to return to the Seanad next week.
In regard to the detail of the sections, section 1 covers interpretation and defines "Act of 1938" as the Ministerial and Parliamentary Offices Act 1938. Section 2 provides that long service increments will not be paid to those Members who would normally have qualified for a long service increment on or after 13 May 2009. It also provides that long service increments will not be paid to any Member of the Houses of the Oireachtas after the next general election.
Section 3 is concerned with pensions awarded to officeholders under the old officeholders' pensions scheme, that is, those who qualified for such pensions before 13 January 1992 when the new officeholders' pension scheme was introduced, and who did not opt to join the new scheme. Officeholders are the Taoiseach, Ministers, Ministers of State, etc. The section provides that between the passing of this Act and the next general election, officeholder pensions paid to sitting Members of the Houses of the Oireachtas will be reduced by 25% and the pensions will cease to be paid to such Members after the next general election. In the case of members of the European Parliament, the reduction will apply until the next European Parliament elections. Pensions will cease to be paid after that date for sitting Members.
Section 4 is concerned with pensions awarded to officeholders under the new officeholders pension scheme to persons who have three years or more of qualifying service. New scheme members are those who first qualified for an officeholder's pension after 13 January 1993 when the new scheme came into effect. It also includes persons who had already qualified under the old scheme for an officeholder's pension but who opted into the new scheme. These pensions are not paid until the person concerned reaches age 50 and the pension is reduced to one-half while the former officeholder is sitting in either House of the Oireachtas or the European Parliament. The only exception is for former Taoisigh, in which case the pension is not reduced.
The section provides that between the passing of this Act and the next general election officeholder pensions being paid to sitting Members of the Houses of the Oireachtas will be reduced by 25%. This provision is given effect by reducing the pensions by 62.5% rather than 50%. It also provides for a reduction of 25% in the pension paid to former Taoisigh who are Members of the Houses of the Oireachtas or the European Parliament. As I have said, at present, such a former Taoiseach's pension is not reduced. The section also provides that the pensions will cease to be paid to such Members after the next general election. In the case of members of the European Parliament, the reduction in the pension will apply until the next elections for the European Parliament and then the officeholder pensions will cease to be paid after that date. Section 4 also provides for some technical amendments to the legislation by the renumbering of an existing provision.
Section 5 deals with ministerial, secretarial, Minister of State and other officeholder pensions awarded under the new scheme to persons who have more than two but less than three years' qualifying service. The qualifying period for officeholder pensions was reduced from three years to two in 2001. The provisions of section 5 are essentially the same as those in section 4. It provides that the officeholders' pensions will cease to be paid to former Ministers who are sitting Members of the Houses of the Oireachtas or the European Parliament after the next elections. In the meantime, the pensions paid to such sitting Members will be reduced by 25%. Section 6 provides for the Short Title and collective citation. I commend the Bill to the House.