I welcome the Minister of State, Deputy Mansergh, back again to the House. He is probably the Minister who has most often visited this House.
SECTION 1.
Financial Emergency Measures in the Public Interest (No. 2) Bill 2009: Committee Stage.
Amendments Nos. 1 to 6, inclusive, not moved.
Section 1 agreed to.
SECTION 2.
Amendments Nos. 7 to 12, inclusive, not moved.
I move amendment No. 13:
In page 6, after line 47, to insert the following:
"(8) The Minister may, by order, decrease the scale of the reduction under this section, in whole or in part, in the event of demonstrable improvements in the efficiency of delivery of individual areas of the public service.".
One of the issues that emerged during the debate on Second Stage was the relationship between the Government and the public sector unions. There has been a breakdown in the trust between the two sides during the partnership talks. There is still a need to proceed with the introduction of the proposed massive efficiencies that were under discussion between the trade unions and the Government because I do not know what other alternative the Government will have this time next year unless we manage to introduce changes in terms of the way people in the public sector work. This process had been practically agreed between the Secretaries General of the relevant Departments and the trade union leadership before the talks collapsed prematurely. There is a need to introduce a mechanism to give the public sector some confidence that this is not just about purely straightforward cuts for the next few years. We need to instill confidence that we are examining the continued modernisation and possible acceleration of the public sector which will bring benefits to our citizens. Given the current financial crisis, I cannot see how the Government will have any choice next year other than to introduce another round of cuts in the salaries of public and civil servants. When we consider the financial crisis and the fact that GDP is still retracting, we can see that, regardless of the good news we hear in the media today, it will not be enough to stop these massive changes next year.
It is with interest that I note the Senator's amendment and comments. His reference to cuts and more cuts perhaps demonstrates his vision. If that is how he would go about his business, it may be that that is the only avenue he believes is available to him. A quite simple point that could be made in return is that we should perhaps consider how we do our business and whether we can achieve savings through simple improvements and efficiencies.
Last week my vehicle tax disc was due for renewal. In years gone by one would have gone to the motor taxation office and queued all day with a large crowd of people — I presume Members remember this. One would have received a number and sat and waited and then been sent from one counter to another and, eventually, two or three hours later, one would have come out with a new tax disc but perhaps also to a parking ticket. Last week, however, I went on-line and the next day received my tax disc in the post. That is efficiency and an increase in productivity. That is what people now expect. Rather than cuts or great alterations, we need to see more slight improvements in the way we do business in our modern country. I hope the Minister and his colleagues will be able to achieve such reform throughout the public sector and I wish them well in doing so. I commend those members of the public service who have participated in change and achieved such success. They have not taken an Arthur Scargill-type stance of refusing to budge. Let us all be proactive. The feedback I am receiving from staff in the public sector and their representatives is that they do not want to get involved in a militant, argumentative stand-off. We all want to see progress and the country turn around. I wish those involved in the process every success in encouraging people to take steps similar to the example I described in respect of car tax.
Mr. Scargill would be surprised if he knew about the number of mentions he has received in this Chamber since his short, perhaps innocent trip to Ireland a few weeks ago. A day never passes on which he is not mentioned or invoked in some way in order to illustrate points being made.
A Leas-Chathaoirligh, am I too late to move the amendment listed with this one, amendment No. 8?
Amendments Nos. 8 and 13 were grouped to be discussed together, but we are discussing them individually, which is why this discussion is taking place. We have gone past the stage at which the Senator could have moved amendment No. 8, but he can speak to it, I presume.
On the principle underlying Senator Twomey's amendment, amendment No. 13, which provides for the possibility of reversing the pay cuts in the event of what are described as demonstrable improvements in efficiency occur in areas of the public service, I can understand where the Senator is coming from, but I am not sure whether it can be achieved through the amendment he has tabled. However, this demonstrates the importance of revisiting, even briefly, the reason we are here and why the unilateral pay cut was imposed through this legislation by the Government after a period of apparent progress in the negotiations with the public service unions. The Minister of State, Deputy Mansergh, outlined what had occurred in his response to the Second Stage debate yesterday. There have been various other comments in this regard in the newspapers and the trade unions have set out to some extent how they interpret what happened.
The important point, in the context of the complex issues associated with public service reform which was touched on by Senator Callely, is whether we would prefer, as a country, to introduce these undoubtedly necessary changes by way of discussion and agreement or believe they can be conjured up in some way simply because people wish them to happen. Time and again, Members and people elsewhere have made the not unreasonable point that if the trade unions can list things they were prepared to give with regard to public service reform, why can they not just implement them? As I tried to point out yesterday, we must live in the real world. Changes in work practices — for example, the time at which an employee arrives at work, the possibility of transfer to other agencies or different parts of the city or country, or his or her preparedness to retrain, all of which are reasonable and progressive for any employee — involve changes in the way a person works day by day and we cannot make somebody co-operate. Life is not like that. One cannot issue an edict saying workers shall co-operate with a new set of work practices.
Of course, going back to Mr. Scargill's time, one could do what the UK National Coal Board and other employers did, which was to say that if employees did not change their work practices by a particular date, they would be closed down. Such a jackboot approach can be taken in some areas of the private sector. However, in the public sector which we all agree is and should be a progressive employer that is not how things should be done. It is not even a way by which things can be achieved. One cannot obtain people's co-operation and support in this way. Employees would not have confidence in their jobs and a sense of having a stake in the service they are providing so well — in every instance of which I am aware — for the public, if they were told things were to be changed by edict. At a basic level one must have co-operation and the best way to achieve it is through the workers' elected representatives in the trade unions. There is no question about this. Senator Callely is right when he states people do not want to engage in industrial action. I went on strike when I was a trade union member and have met many people who have been involved in strikes and trade unions and I have never met anyone who wanted to go on strike. I did meet people who, once they were on strike, found it very hard to come off because of the agreement being proposed or similar concerns. The dynamic changes once a strike starts. However, nobody wants to go on strike.
People talk about trade union leaders whipping up anger among their members, but that is not what is happening. The tragedy of what happened two weeks ago is that the leadership of the trade union movement, whom some here are so quick to slag off, are actually the people on whom we depend, with their leadership skills and qualities, in order to make progress on these issues. People can criticise them all they want if it makes them feel better, whether in the House or anywhere else, but, to paraphrase Fergus Finlay's quote about the Northern Ireland peace process, talks are not worth a penny candle unless the people who actually matter are at the table. Nothing has ever been achieved in negotiations with a group of people sitting on one side of the table and nobody sitting on the other side, or people sitting on the other side who do not have the confidence of their members and are not credible leaders.
The rug was pulled from underneath the recent talks and this has resulted in major fall-out. It cannot now be predicted what will happen with regard to future talks and, by extension, reform in the public service. When I make this point, people assume I am saying the unions should have a veto and stop all progress. However, I am not saying that and do not agree that should be the case. My party leader made the point that if the Labour Party were in government, it would not be a trade union Government. Trade unions have specific roles and responsibilities and do not determine the law of the land. That is absolutely not the case. They do not do so, nor would I ever advocate that they should but there is a vital role for trade unions in our society, in the workplace and, nationally, in the context of the public service. I do not know how the Government will seek to persuade, or can reasonably expect, the trade unions to return to the negotiating table on these vital issues. I hope those talks resume, just in case anybody doubts my bona fides. However, it will take some effort on the part of the Government and, I regret to say, an awful lot more than simply the supporters of the Government in this House and elsewhere saying the unions have a moral responsibility to go back to the table to do their duty. That will not wash this time. Something more will have to be done and leadership will have to be shown in that regard.
If I had the opportunity to speak on amendment No. 8, which I——
We are on amendment No. 13.
The issues in amendment No. 8 are similar. They reflect the point that it is unquestionably preferable that where agreement can be reached in regard to these issues, it should be sought, pursued and obtained, whether in the workplace or nationally. I have heard a viewpoint, although not necessarily in this Chamber, that it is better for the unions to be seen to be beaten. That is a point which lurks around the debate. People never quite say but that is what they mean, that is, that if one can land a defeat on the trade union movement, that constitutes an achievement. Does it mean these faceless bond market people will pick up the Financial Times and read the trade unions are being smashed in Ireland? Is that it? What sort of view would seek to sustain that suggestion that not only should we take the unions down a peg or two but that we should visit a historic defeat on them? I am tempted to refer to Mr. Scargill but I will not.
Senator Twomey's amendment is important and raises the many issues that lie at the heart of what happened a couple of weeks ago. I am not sure this is the way to resolve it but it is important we have an opportunity to touch on this issue again by debating it.
Senator Callely may have misunderstood some of what I said. If one has people working for one or if one works with people, one must negotiate with them, regardless of what one may think of their points of view. A position must be reached. As it stands, Government policy in dealing with this issue is purely to make cuts. All negotiations between public sector unions and the Government are off. That has been stated mainly by the union side but it is quite clear from the Government side as well.
There is no doubt cuts were necessary but there is a long-term problem here. This budget has not solved the problem and it will continue for the foreseeable future. Some form of negotiation must be entered into. We must continue the modernisation of the Civil Service and the public service in order to make them work. Perhaps Senator Callely is being political by making glib remarks.
The Minister must accept that negotiations must resume with the public sector unions because the modernisation process must be accelerated. There must be a sense of trust on both sides. There was an acceptance, to some degree, by the union management, the Government and the Opposition that cuts were necessary but by moving ahead unilaterally, the Government has created a huge industrial relations problem.
I had not planned to speak on this amendment. The Minister said there is considerable difference between business and Government. We talk about having to negotiate. A good manager will negotiate, although there are times when a manager's job is to manage. If that manager's job is to manage and if the alternative is disaster, at some point the manager must say to the unions and employees that we do not have a choice, we have come to this conclusion and we must do whatever because it is a case of life or death or something close to that. We are close to that at this stage. Having negotiated and talked, one must say something is the only alternative and it is what we must do. That is what the Government has done on this occasion and I am inclined to support its stance on this occasion.
The proposed amendments would, in the case of amendment No. 8 on behalf of the Labour Party, add an additional section disapplying the pay reductions where there was in a public service body an agreement to achieve the savings some other way. Senator Twomey's amendment which is what we must decide on now would add a further subsection to section 2 to allow for reductions where there were demonstrable improvements to service delivery.
I do not disagree with the general principle underlying either amendment in so far as it recognises the need for improved public services but it is not appropriate to this Bill and I do not propose to accept it. The purpose of this Bill is to achieve the necessary permanent savings in the public service pay bill and we must proceed on that basis. We have an immediate difficulty with the public finances for 2010 and this Bill is intended to address that by reducing the public service pay bill by approximately €1 billion.
I have commented already on the need for modernisation and transformation of the public service and the part that this can play in containing future pay costs and delivering high quality public services. There is a clear agenda on which we can work. I emphasise again that the Government wishes to continue dialogue with the public service unions to bring this about. The Minister for Finance has also made it clear that if there is a failure to engage with this agenda, which affects the public finances further, this could cause continued difficulties with budgetary planning to 2011 and beyond.
I will deal with the specific points made by Senators. Senator Twomey referred to Senator O'Toole's account yesterday of discussions with Secretaries General. He alleged the Government collapsed an agreement. That shows a fundamental misunderstanding. I have been a negotiator on behalf of the Government in a peace process context and as an unofficial party negotiator in regard to agreements with other political parties, that is, the Labour Party or the Progressive Democrats. Wherever one gets to with tentative agreed proposals, they must be referred upwards to the political decision makers who have the absolute right to decide whether that proposition, which has reached a certain stage, will fly. I do not believe it is acceptable to say that, effectively, Secretaries General are the Government and to ask what business the Cabinet has in disagreeing with them. That is not the way things work.
We all agree with the need for reform and modernisation of the public service. That can be done by way of dialogue, and I very much hope it will be. However, as Senator Quinn noted, in the absence of either dialogue or satisfactory agreement, in the last analysis the Government must govern, particularly if, to use the Senator's own words, the alternative is a disaster and there is no choice. While I agree absolutely with the Senator's remarks, obviously one strives as far as possible. As a year remains before the next round of budgetary decisions must be made, there is plenty of time to engage on the issue of reform.
While Senator Twomey referred to cuts, Fine Gael and Fianna Fáil are agreed on what the order of cuts should be and the Government simply is making the decisions. I accept the Senator does not accept the particular decisions made, but as far as I am aware, the overall amount is not in question between the two parties. I accept the Labour Party sought a bigger role to be played by taxation.
As did the Government last April.
Yes, but the subsequent flow of revenue showed that we had exhausted revenue. While one certainly can increase rates, that does not mean one necessarily will accrue more revenue as a result. I fully agree with most of Senator Alex White's comments in that the issue of public service reform is complex and, in some ways, the Bill reflects the complexity of the public service. Moreover, it is far better to have discussions and negotiations between employers and employees. I have no idea when precisely or in what form dialogue will resume, but it, undoubtedly, must do so sooner or later, preferably sooner. Certainly, I fully accept what the Senator said about trade union leaders, as, notwithstanding one or two isolated remarks by particular trade unionists, I do not believe trade union leaders are whipping up sentiment. I fully agree with the Senator in that regard and have a belief, certainly until demonstrably shown to the contrary, in the fundamental responsibility and good sense of most trade union leaders. I believe that was the spirit in which they entered these discussions——
And a constructive Opposition not putting them up to it.
No interruptions, please.
——and there are considerable leadership skills. I could not help smiling when the Senator quoted Fergus Finlay's remarks about talks not being worth a penny candle. I believe the Fine Gael Taoiseach of the day was not a bit pleased with that particular remark, but that did not necessarily affect its validity. A certain British trade union leader has been invoked yesterday and today.
He is invoked on a daily basis in this House.
I must confess that in or around 1984, at a time when Fianna Fáil was in opposition, many on the fifth floor of Leinster House were sporting the motto, "We back the miners". At the same time, I am not a great admirer of presidents for life in any sphere, be it political or trade union. However, the point I was making in reply to Senator Harris who I believe argued yesterday that the same approach needed to be adopted as that which was applied by Mrs. Thatcher and Rupert Murdoch was that I fundamentally disagreed with such an approach. I believe Mr. Murdoch's principal publication was popularly known as "the Wapping Liar". The entire purpose of social partnership is to avoid the destructive trade union conflict that had taken place in Britain during the mid-1980s. It is to strike a different path; the Industrial Relations Act 1990 which was introduced by the former Taoiseach, Deputy Bertie Ahern, when Minister for Labour, was consensual legislation rather than an imposition. If this can be achieved, it is by far the best way to do so. Speaking for myself and I hope the Government, I have no interest in beating or defeating trade unions. The Government wishes to work and co-operate with them. They have good ideas on the way ahead and I hope it will be possible to get together. However, I also accept Senator Alex White's comments on certain realities and perhaps a cooling-off period is required.
As with the pension levy, the Government was obliged to do what it had to do. I went into this subject at some length in the other House and will not do so here, but trade unionists should recall that public service numbers, pay and conditions improved vastly, particularly between the years 2000 and 2007. There were several steps forward and I acknowledge we now must take a couple of steps back because they were not sustainable. Far from wishing to dismantle anything, the Government seeks to keep as many as possible of the gains made. However, there are times when one must take a couple of steps back. I hope there may be more understanding of this in the months ahead, as well as a greater understanding of the wider context in which Ireland is operating, namely, as part of the eurozone and a member of a hard currency zone. This is not the first time there have been pay cuts. While there have been many pay cuts previously, they have been disguised by inflation and devaluation. Consequently, this position is not as new as it appears. However, I accept it may take people time to adjust to the reality of the manner in which we must go about things today.
Amendment, by leave, withdrawn.
Amendments Nos. 14 and 15 are ruled out of order as they would impose potential charges on Revenue.
Amendments Nos. 14 and 15 not moved.
Question proposed: "That section 2 stand part of the Bill."
I have a question about the section. Section 1 refers to the Schedule which lists the companies which are exempt from the pay cut. The Minister of State should clarify the position on Anglo Irish Bank. Although Anglo Irish Bank is now a semi-State body, it is not among the 23 organisations listed in the Schedule as being exempt from the pay cut. I presume its absence from the list means it is included and that as a semi-State body, it will be covered by the reduction in pay.
I note the difference between the Secretary General of the Department of Finance and the Secretary General to the Government who face a 20% cut and every other Secretary General of a Department, each of whom faces a cut of 15%. They will still earn more than €200,000. Since high ranking officials earning more than €200,000 in Anglo Irish Bank are not included in the table of semi-State bodies, I presume they will be included in order that their pay will be reduced by 20% while the pay of low paid officials will be cut by the same amount as public servants' pay in tables 1 and 2.
I have concerns as to whether what will be achieved by the section is what the Government intends. The Minister of Finance said in his Budget Statement that the salaries of the Taoiseach and Ministers, including Ministers of State, would be reduced by 15% and 20%, respectively, as recommended by the Review Body on Higher Remuneration in the Public Sector in its report published on 11 December. However, the Bill will not implement the recommendation because it imposes 20% and 15% cuts on the pay these persons receive as officeholders but not on the pay they receive as Deputies. As a result, the Taoiseach will suffer at most a pay cut of 15.6% and his Ministers a cut of 11.6%. Is that correct?
With regard to the pay cuts to be imposed on middle ranking public servants, the Minister in his Budget Statement said pay cuts would be imposed incrementally on a progressive basis and, "Accordingly, the pay of public servants will be reduced with effect from 1 January 2010 as follows: a reduction of 5% on the first €30,000 of salary, a reduction of 7.5% on the next €40,000 of salary and a reduction of 10% on the next €55,000 of salary". The Bill does not implement this intention because the relevant provision, table 3, provides instead that those with a basic salary of up to €30,000 will suffer a reduction of 5% of basic salary, those with a basic salary in excess of €30,000 but not in excess of €70,000 will suffer a reduction of 7.5% and those with a basic salary in excess of €70,000 but not in excess of €125,000 will suffer a reduction of 10%. This is an entirely different formula, which will have the effect of imposing a flat percentage rate reduction rather than a cumulative pay cut on public servants earning more than €30,000. In other words, an employee on €75,000, instead of losing an initial tranche of 5% of €30,000, 7.5% on the next €40,000 and 10% on the final €5,000, which amounts to a reduction of €5,000 or 6.6%, will lose 10% of his or her basic salary, which is €7,500, a difference of €1,500 or 20%. This will be brought about purely by a mistake in drafting. I do not criticise the drafters who are doing the best they can but the Bill has been put together quickly and I wonder whether there are other unintended consequences.
I oppose the section because our amendments have been ruled out of order. Fine Gael accepts there must be some cuts to the public sector payroll but the issue for us is we do not want the lower paid in the public service to be affected by the reduction. We want them to be protected and that is why I oppose the section.
I welcome the Minister of State and I appreciate the time he is giving to this. This section is unfair to low paid public sector workers. This is the second Bill we have taken this week that has disproportionately laid the blame for what has happened at the door of public sector workers and social welfare recipients. As Senator Twomey said, Fine Gael proposed to take €1.2 billion off the public sector pay bill and to save €6 billion in the budget. We disagree fundamentally with the Government that the first €30,000 earned by a public sector worker would be subject to a 5% cut. Senator White is correct.
I refer to an e-mail I received from a women during the week, which states:
I am emailing you as I am a public sector worker who's wages are going to be cut again, it is a disgrace that this government is cutting our wages for the third time. The public sector workers did not cause the problems the country is now facing, it was the present government's failed polices with the help of their banker friends and property speculators.
The image been portrayed by the media is very inaccurate as we the public sector are been shown as the reason for the economical downfall, as we are constantly seen as ‘over paid' ‘underworked' and generally in a highly negative light.
The Senator is making a Second Stage contribution.
I refer to this in the context of the 5% reduction on the first €30,000 of salary for public sector workers in table 3.
The Senator should refer to the section but he should not read an e-mail into the record.
I appreciate the Chair's position but the section will penalise workers who earn €30,000 a year and whether the Minister likes it or not, that is not a huge salary when one considers many of them are young and paying huge mortgages and have significant negative equity. Interest rates will increase. I appreciate where the Government is coming from because this is the consequence of failed economic policies. Fine Gael put forward an alternative, which the Government did not take on board. How can the Minister of State justify hammering public sector workers earning €30,000? Workers in the Oireachtas are struggling. People are not sleeping at night and I am worried because the Government's economic management has failed.
The ESRI says half the Exchequer deficit is attributable to unemployment, which was caused by an over reliance on the construction industry. I appreciate the private sector has suffered a major hit. I met a friend earlier who has a business. His turnover is down 30% and his staff have taken a 6% pay cut. Allied to the cut in child benefit, it creates a gulf between the private and public sectors. What will happen in January if this section is implemented? There will be a reduction in wages, consumer spending will decrease after the sales and families will have to make choices on what to do with their money at the risk of endangering educational prospects or losing the family itself. On numerous occasions, Senator Hanafin has espoused family values. He is right and I support him on it. However, this section in particular will create discord and disharmony in families. If this section is passed I believe we have grounds to try for economic treason the Taoiseach, Deputy Brian Cowen, the former Taoiseach, Deputy Bertie Ahern, and the former Minister for Finance, Charlie McCreevy. This is the legacy of the Minister of State's party's mismanagement. This section is very important because it is about the take-home pay——
It is relevant to the public service.
It is about the take-home pay of many people who I represent and I am also affected. As I stated yesterday I do not mind taking a pay cut because I can afford it. However, people working in hospitals and schools, the Defence Forces, the Garda Síochána and other front-line services cannot afford to take this cut and they are at their wits end. I appeal to Senator Hanafin and his Fianna Fáil colleagues not to agree to this section, in particular the provision on the first €30,000 of income which is the fundamental matter. Do they think it is right that we should place a burden on those on €30,000 and less? Is that what they really want? Is the Government stating in this section that it is all right to pummel and prosecute workers but high earners can get away with it? If so, the Members of the Government should pack their bags and call an election.
My question is very simple and echoes the point made by Senator Alex White. Senator White took an example from table 3 so I will take one from table 2. If the intention is that a public servant with a basic salary rate of more than €125,000 should pay 15% of basic salary, which amounts to €31,500, only one line of text is necessary to state it. However, if it is done the way I originally assumed, such a public servant only pays €15,700. I believe I have done my sums correctly. Is the intention that someone earning €210,000 would pay 15% of that or would pay 8% on the first €125,000, 12% on the next €40,000 and 15% on the rest? If so I do not understand why the three tables are necessary. Have Senator Alex White and I made a mistake or is this the intention?
Many points have been made. Senator Twomey may have many good reasons, from his point of view, for opposing the section but I do not think the disallowance of an amendment which would be unconstitutional because the Seanad does not have the power to increase Government expenditure is one. He may have many other reasons for opposing it.
Senator Burke, no doubt tongue in cheek, raised the issue of Anglo Irish Bank and prefaced every sentence with "I presume" and may I say, in the politest and most diplomatic manner possible, that in each instance he presumed wrong. We discussed the position of Anglo Irish Bank yesterday when points were made on whether it should be included in the pay reductions and on the consultants it uses. It is the intention of the Government to apply pay reductions in the public service pay bill for the purpose of saving approximately €1 billion. However, the pay reduction applies to public servants. Commercial State-sponsored bodies are not included. The pay of those bodies is funded through their own commercial efforts. With the exception of chief executives, the Minister for Finance does not control the pay of the staff of these bodies. They were not covered by the public service element of pay rounds in the past and the bodies have taken an independent approach to controlling their pay bills. The same is true of Anglo Irish Bank, which is run on an arm's length commercial basis by the board, albeit having been funded by the Exchequer.
More to the point, at present the board is overseeing a full cost review of the bank which will seek to reduce costs in all areas of the bank's operation, including pay costs. As Senators are aware, the bank recently introduced the first phase of its redundancy programme, targeting up to 230 departures from throughout the bank. Accordingly, and this is the key point, staff at the bank do not have the security of tenure associated with public service employment. If one was to treat them like public servants or state that their status is that of public servants, they would expect the same degree of security of tenure and I do not see in all the circumstances that could be reasonably argued.
In addition, Anglo Irish Bank recently submitted its restructuring plan to the European Commission. The plan considers all options for the future of the bank and a detailed evaluation of the plan is now under way. The process will involve extensive consultation and dialogue between the Irish authorities, the European Commission and the bank to agree a restructuring plan for Anglo Irish Bank which will achieve the best possible outcome for the State from the process. The outcome of the restructuring plan process will determine the future of the bank, including its required staffing levels, staff retention and redundancy objectives, and the bank's pay levels will be determined by the board accordingly.
It is clear that any future strategy for Anglo Irish Bank will involve further redundancies at the bank and further cost reductions. In seeking to reduce its cost base, Anglo Irish Bank is acting in a fashion similar to other commercial State bodies which are planning their way out of present difficulties. To start treating the staff as public servants would cut across these vital processes for Anglo Irish Bank and for the State as a shareholder in the bank. For that reason, I will not accept that proposition.
With respect to Senator Alex White, the amendment may be based on a misreading of table 1.
On a point of order, I was not dealing with an amendment. I was speaking on the section.
My apologies, amendment No. 9 is water under the bridge. However, I still want to deal with the point. It is intended that the total remuneration of the office holders in table 1 would attract the reduction specified for them. For example, the salary of the Taoiseach or a Minister as a Deputy, his or her ministerial allowance and so forth combined will undergo a total reduction of 20%. It is because a ministerial salary is paid in parts that the table refers to remuneration rather than salary. As it stands, the Bill achieves the aim.
My own salary as a Minister of State was amended in the Dáil and the deduction was raised from 8% to 10%. For administrative purposes, 8% will be deducted from my salary as a Deputy, but the missing 2% will be added on to the 10% deduction from my ministerial salary. I am not talking about 2% of my ministerial salary, but 2% of my salary as a Deputy. A 10% reduction of the total salary as Minister of State and Deputy combined will then be achieved.
Table 1 in section 2 states that the reduction is 10% "of remuneration". That is intended to mean 10% of all remuneration.
Then it should really state that. If we look at the rest of the Act, section 2(2) seems to suggest that a person is either covered under one or the other. Section 2(2) states:
(2) Where the remuneration of a public servant is fixed by a relevant provision, then, subject to subsections (3) and (4), the relevant provision shall be taken to have been amended so that the remuneration is—
(a) in the case of persons to whom Table 1 to this section relates, reduced in accordance with that Table, and
(b) in any other case, subject to subsection (7), reduced in accordance with Table 2 or Table 3 (as the case requires) to this section.
We are either in one case or the other. The drafting has allowed for things to fall between the cracks. If a pay cut is being dealt with under table 1, then it will not be dealt with under the other provisions. There is a problem in the way things are drafted, and we could have avoided all doubt by putting in the word "all" before "remuneration". We need some way to make it clear that the percentage reduction will capture both the ministerial salary and the Deputy's salary, which is clearly what is intended by the Government. Otherwise, the relevant reduction of the Taoiseach's salary would apply only to that part of his earnings which is attributable to his earnings as Taoiseach and not in respect of his earnings as a Deputy. That is clearly an anomaly in the Bill.
The Minister of State claimed that what is intended is to take 10% of his salary as a Minister of State, 8% of his salary as a Deputy and to make up for that by taking an additional 2%.
Or more than 2%.
That does not appear in the Bill. The Minister of State now tells me that this is the intention of the Government, but why is it not in the Bill?
I do not accept there is any ambiguity whatsoever. When people talk about the Taoiseach's salary, they do not mean his salary for the office of Taoiseach, but his salary including that as a Deputy. In almost all contexts, the Taoiseach's total salary is discussed. There is no ambiguity in the application either.
There is a manifest ambiguity. I will go back to section 2(2) to demonstrate that there is a clear ambiguity, if an ambiguity can be clear. The salary of the Taoiseach, the Ministers and the Ministers of State will be dealt with one way or the other, which is the clear intention of section 2(2). Part of section 2(2) states:
(a) in the case of persons to whom Table 1 to this section relates, reduced in accordance with that Table, and
(b) in any other case, subject to subsection (7), reduced in accordance with Table 2 or Table 3 (as the case requires) to this section.
Even if what I am saying is not absolutely correct, for the Minister of State to say that there is no ambiguity is nonsensical. How can he say that there is no ambiguity when I raise an issue that he cannot even deal with? He said that the extra 2% would be lobbed over onto the other side and taken off there as a way to deal with the problem. That strategy does not even appear in the Bill.
If the Taoiseach and other officeholders suffer a pay cut under table 1, it seems that they do not suffer a second cut under table 3. The Minister of State must accept that. The Bill does not capture the salary of the Minister of State in both table 1 and table 3. It comes under one or the other. It is capable of being interpreted in a way that would mean the Taoiseach, Ministers and Ministers of State would only have one cut, and not two cuts.
The term used in table 1 is "remuneration". Remuneration is defined in the Bill as taxable income and the remuneration of officeholders is all taxable. I will provide a concrete example using my own salary as Minister of State. The cut in my salary as a Deputy of 8% will reduce it to €92,672. The allowance for being a Minister of State will be cut by 14.5% to €46,594. The total remuneration will be cut by 10%.
The Minister of State keeps saying things that do not answer the point I am making. If table 1 means what it states, the remuneration to which it applies is the emoluments that the Taoiseach and the other Ministers receive for their services as holders of the qualifying office specifically referred to in that table. It does not refer to any other emoluments. Table 1 states "Taoiseach" under the heading "Office" and "20 per cent of remuneration" under the heading "Reduction". There is nothing in the Bill to suggest that the remuneration of the Taoiseach includes his remuneration as a Deputy. All the Minister of State has to do is change it in order to ensure that this outcome is achieved. Otherwise, it is not achieved in the Bill.
The Government might want to deal with this by way of a formula the Minister of State has just mentioned. I am not suggesting that he has just said this now for the first time, because I am not aware of that. I am referring to this business of the 8% cut and the 2% cut being lobbed on and put over to the other side. In other words, the Taoiseach's salary will not be reduced by 20%, but by a higher amount. Therefore, table 1 is completely wrong. To every single figure in table 1 that deals with reduction, there must be another amount added. We are legislating to say that the figures in table 1 are wrong, because they should be higher and they will be higher.
I do not accept the argument and believe Senator White is misreading this. If he still disagrees with it, he is at liberty to vote against it.
How am I misreading it? The Minister of State should read it.
I disagree with the Senator. Remuneration means emoluments. It is defined on page 5, line 33.
I know that.
The remuneration which is being cut by 20% is made up of a Deputy's salary and the Taoiseach's allowance. The latter will be cut by an additional amount. The bottom line, as far as members of the public are concerned, is whether the deductions, as set out in the table, will be applied and whether it is the law that they will be applied. I can give an absolute guarantee and assurance that this will be the case. There is no ambiguity.
Why is the Government introducing legislation?
Does the Senator believe we would engage in such trickery?
The Minister of State should relax. Is he suggesting Senators may not raise such issues in the House?
I am speaking now and I am entitled to some respect. The Minister of State should not engage in a hissy fit because a Senator raises an issue. His reaction is outrageous and he should be more careful as to how he reacts to Members. He asked me to read the text, which is precisely what I am doing. He has also told me that the words in Table 1 mean something other than what they state.
On that point, I agree with my colleague, Senator Alex White. The Minister of State has indicated that an additional cut will apply to the Taoiseach's pay. Having read the legislation, I have not found this cut. It should be in the legislation in black and white. Will another voluntary cut be made to make up the difference?
I fundamentally oppose the section. As the Minister of State is aware, Sinn Féin opposes cuts to public sector wages, except in the case of salaries above €100,000 per annum. The proposed cuts are not the correct course of action for a number of reasons. Public sector workers should not be targeted in isolation. Moreover, taking money out of people's pockets will deflate the economy and these cuts are deflationary.
I am sick and tired of the spin being peddled by Ministers and their spin doctors that average salaries in the public sector are €50,000 or €60,000. To clarify the matter, I asked one of my colleagues in the other House to table a parliamentary question on the level of pay of public sector workers in County Donegal. The reply which I received yesterday indicates that, according to the Department's latest information, there are 31,806 public sector workers in the county, of whom 20,658 earn under €20,000 per annum. In other words, two thirds of all public sector workers in County Donegal earn under €20,000, while a further 4,500 of earn between €20,000 and €30,000. This means almost 27,000 of the 31,000 public sector workers in County Donegal earn less than €30,000 per annum.
A large proportion of the 20,000 public sector workers in County Donegal who earn less than €20,000 are outside the tax net. Some of them have such low income because they avail of job sharing and other working arrangements. The percentage by which the pay of such persons is cut is not the main issue. For these workers, the big ticket item is not PRSI, income levies and all the rest but the net loss in pay arising from the pay cut. Most of them will take a 5% net deduction in their pay packet, in other words, the amount of money in their pockets will be cut by 5%. Let us take the example of a public sector employee who earns €160,000 per annum. A person on this salary will take a reduction in salary of 8%. However, as a result of taxes, levies and so forth, the net reduction in pay will be less than the net reduction in pay for a public servant earning less than €20,000.
Judging by the Minister of State's reaction, I need to explain the position again. More than 20,000 public servants in County Donegal earn less than €20,000 per annum. As most of them are outside the tax net, any reduction in salary will be to their net wages. The 5% reduction to apply to those in this income bracket will, therefore, reduce their net pay by 5%. On the other hand, a public sector worker on a salary of €160,000 will have his or her salary reduced by 8%. However, when one takes into account that he or she pays the higher rate of income tax, levies and so forth, one finds that the net reduction in his or her pay will be proportionately less than the net reduction in pay for a public servant earning less than €20,000. The Minister of State must agree that the proposal will result in a larger reduction in net pay for those earning less than €20,000 than for those earning up to €160,000.
This legislation is scandalous and should not have been brought before the House. Sinn Féin disagrees with the other Opposition parties, both Fine Gael and the Labour Party, on the matter. With the exception of those earning more than €100,000, public sector workers should not have been targeted. Those earning the average industrial wage and others should not have been targeted in this manner.
I reject the proposal and appeal to my colleagues from County Donegal, Senators Ó Domhnaill and Keaveney, to understand the Government spin about large numbers of high earners——
Senators should not refer to a Member who is not present in the House.
This measure is not aimed at chairpersons of State boards who earn up to €500,000 or other public sector workers on high salaries but people in our constituencies. To amplify my earlier point, based on the most accurate information the Department can furnish, two thirds of public sector workers in County Donegal earn less than €20,000 per annum. The measures proposed will reduce their net income by 5%. The proposal should not be supported in any shape or form. The required savings could be made by ensuring appropriate measures are taken to reduce the salaries of those who have the highest incomes and can afford to pay.
We had a lengthy discussion on the Taoiseach's remuneration. A 20% reduction may look good and go down well with spin doctors, but the Taoiseach will continue to have a massive salary. While I accept he does an important job, he and his Ministers should not be remunerated at the levels proposed. Taking into account the effects of taxation, levies and so on, the true reduction in their pay is not sufficient. It is outrageous that the lowest paid public sector workers are having their pay cut by 5%.
Progress reported; Committee to sit again.