I apologise, it is €400,000. The zeroes are swimming before my eyes.
This is the fourth financial emergency measures Bill to be put before this House since 2009. The application of these measures to public servants in 2009 and 2010 represented the first statutory reductions in public servants' pay since 1933, and it is worth pointing out that the 1933 reductions only applied for a year. The fact that public servants' pay has been reduced since early 2009 shows the difficult position we find ourselves in and the severity of the crisis faced by the State. Despite these measures, the crisis in our public finances has continued. We all heard the Taoiseach's broadcast on national television last Sunday. On Monday the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, announced the expenditure Estimates for 2012 and measures to reduce spending. The Minister for Finance, Deputy Michael Noonan, delivered his first Budget Statement yesterday, setting out taxation and budgetary measures for next year. These difficult and unpalatable decisions are designed to contribute to rebuilding our economy and ensuring that the burden of recovery is equally shared.
In the last few days, details of the public finances, including tax receipts, were discussed in detail. Tax revenue in 2011 is currently forecast at €34,175 million, some 28% below its 2007 peak, and still almost €1.5 billion less than was collected as far back as 2004. In contrast, gross voted current expenditure has grown by close to 50% since 2004, with the increase in unemployment-related expenditure having a big impact in that regard. Tax receipts have been very severely impacted upon by the sharp deterioration in economic activity, and the gap that has emerged between revenues and expenditure is not sustainable. Budget 2012 estimates the general Government deficit in 2011 at €15.6 billion or 10.1% of GDP. The Government recognises the difficulties facing the nation and has set out a framework in the medium-term fiscal statement to restore sustainability to the public finances and to reduce the general Government deficit to less than 3% of GDP by 2015. The difficult announcements of the last two days are proof of the Government's intent in this regard.
Nobody will seek to make the case that the savings generated by this Bill will make significant inroads on the fiscal crisis facing the State. However, that is not the rationale behind the Bill or the proposed amendment. The terms of the Bill reinforce the principles of fairness, ability to pay and burden sharing among all of us. It ensures those in eminent office demonstrate their leadership and, most importantly, their solidarity in a real and concrete way with the burdens faced by those most affected by the economic crisis.
The Government has imposed a policy of strong pay reduction and restraint since taking office last March. All members of the Government accepted reductions in their pay on its first day in office. Since last June, a general pay ceiling of €200,000 applies for future appointments to higher positions across the public service and a general pay ceiling of €250,000 applies for future appointments to chief executive officer, CEO, positions within commercial State companies. A voluntary waiver of up to 15% was introduced for current post holders who have salaries in excess of the relevant pay ceiling and this received a positive response.
In the Civil Service, new pay rates were introduced for Secretaries General of Government Departments. A maximum rate of €200,000 now applies for Secretary General Level 1, representing a 30% reduction of salary since September 2008. Therefore, over a three year period there has been a 30% reduction in salary at the top of the Irish public service. All new appointments to the public service are being made in line with the policy adopted by the Government on pay ceilings. These new reduced pay rates will also reduce Exchequer pension costs into the future for those appointees.
As this is the fourth financial emergency measures in the public interest Bill, it amends and extends the previous measures. I will briefly outline their content. The first Financial Emergency Measures in the Public Interest Act introduced in March 2009 provided for a progressive pension-related reduction, at rates ranging between 5% and 10.5%, to apply to public servants with access to a public service pension. It also contained a number of measures designed to produce savings, which would be remitted to the benefit of the Exchequer. The Financial Measures in the Public Interest (No. 2) Act 2009 provided for the reduction in the gross remuneration of all public servants with effect from 1 January 2010. The Act provided for average reductions of 7% where the salary of the public servant was less than €125,000. Fixed reduction rates of 8%, 12% and 15% applied to salaries higher than that.
Prior to the amendment to the Constitution, the President and members of the Judiciary were not subject to the provisions of these Acts. The Bill today, if passed, gives effect to the application of these Acts to the Judiciary from 1 January 2012.
The Financial Emergency Measures in the Public Interest Act 2010 introduced an income-graduated reduction applied to each gross annual public service pension in excess of €12,000. That reduction already applies to retired members of the Judiciary and will apply to the pension of any public servant who retires before the expiry of the "grace period", after which pensions will be reduced in line with the pay reductions set out in the second Act. I have already mentioned the amendment that is proposed for those on very large public service pensions. The Bill today also includes provision to extend the application of the pension reduction to Central Bank pensioners, with the consent of the Governor of the Central Bank, as was intended by the legislation. This is necessary owing to the legal position of the Central Bank as part of the euro system.
In addition to the three Acts, a 10% reduction in pay from 1 January 2011 was introduced for all new recruits to the entry grades to the public service. This Bill makes provision to apply a similar 10% reduction to new judicial appointments from the enactment of the Bill. The Bill also includes a number of legislative provisions to underpin the significant decision already taken by the Government relating to the remuneration of office holders as well as a number of technical or ancillary amendments.
How much time do I have?