Vol. 223 No. 11
I move amendment No. 1:
In page 4, lines 28 to 36, to delete subsection (2).
One of the central elements of the legislation is the proposal to freeze the increments of public sector workers who do not sign up to the agreement. I raised this on Second Stage and I will not go over the same ground again. I do not have any expectation that the Minister will withdraw this threat but I cannot allow the opportunity to pass without trying to amend this provision and hoping he will take this on board.
The amendment seeks to delete the definition of "increments" in section 1(2). It is a simple but essential element of the legislative proposal for increments in section 7. The Parliamentary Counsel has set out clearly what is the incremental scale and this cuts through much of the rhetoric about it. The legislation sets out an essential definition of "increments", which are dealt with later in the Bill and are an essential part of its architecture.
Amendments Nos. 6 and 7 form a composite proposal and will be discussed together.
I move amendment No. 6:
In page 6, line 26, after "€185,000" to insert "but not over €200,000".
I object to the ramming through of the legislation but I would like to deal with more substantive issues on the section and, therefore, I will withdraw the amendment.
Amendments Nos. 8, 9 and 26 are related and will be discussed together.
I move amendment No. 8:
In page 6, line 35, after “may,” to insert “by way of regulation by the Minister”.
This section confers extraordinary powers on the Minister to change the terms and conditions of public sector workers. Our amendment seeks to ensure the Minister does this by way of regulation. These powers are unprecedented and provide for different classes of public sector worker to be treated differently at the whim of the Minister of the day. The amendment seeks to ensure the decisions he or she makes are done in a much more formal way. I seriously object to this and other provisions in the section.
The Bill is misnamed because, as I tried to point out on Second Stage, an emergency is something that happens swiftly and does not recur. Therefore, the entire Bill is fudged. I would like to put on record something I said to the Minister following the suspension. I watched his contribution in my office and he made a strong speech. I would like my compliments to remain on the record because it was clearly heartfelt and powerful, but I do not agree with him, particularly in regard to this section. We are discussing a situation in which the Minister can tear up agreements, including any statute or other document-like effect of a university or other third level institution, any circular, instrument or other document, any written agreement and contractual arrangement or any verbal agreement. Basically, the legislation is adopting the old Sam Goldwyn-ism that a verbal contract is not worth the paper it is written on. This is a dangerous and sinister power. Most people would trust this Minister with it, but who knows what is to come in the future? As legislators we have to be very much aware of that, because these are swingeing powers.
This is one of the provisions that concerns and worries me about the Bill, because I have always naively believed in the rule of law and, for that reason, I find it rather painful to contemplate the current activities of the US President, Mr. Obama, who is a friend of Ireland and a decent man. However, he has escalated by a factor of ten drone attacks, which completely suspend the rule of law. We are not talking about taking somebody's life here, but it is a serious thing to undermine the law, and by giving people the power to abrogate agreements and contracts, the Minister is undermining the rule of law. It is part of a worrying concentration of power in the hands of the Executive.
The Minister referred to the section and the amendments in his contribution. He said the provisions were not normal, and I agree with him about that, but he also said they will not be permanent. I am sure in his heart he may believe that, but I have never known a government - even a democratic, decent government - to willingly yield powers it has accumulated. Even if the Minister wanted to, the departmental officials would be loth to allow him. I do not refer to the present occupants of the seats behind the Minister. However, it is extremely difficult to reverse such measures. The Minister tried a little flummery when he said that would include office holders, "in particular the Judiciary, whose pay terms are determined not by a Minister but by the Oireachtas." Of course they are determined by the Minister. We are rubber stamps. The other House is a complete rubber stamp, as was shown yesterday.
We might have a little bit more roughness around the edges but the Government will try to get rid of us soon and it has a specially crafted ordered-in-advance rubber stamp, suggested by a well-known public figure - one wonders who - who will preside over this mini-Seanad, a type of yellow-pack Seanad-----
On the amendments.
I am speaking about the concentration of power which is-----
On the amendments.
I am absolutely 100% on the amendments and I agree with all of them. This mini-Seanad will have nothing but civil servants on it and people stuck in by the Taoiseach, Deputy Enda Kenny.
He is the one bellyaching about the fact that we are not properly elected; he stuck in 11 Senators, so he should know about it. Now he wants to stick in the whole bloody lot. Come on. I am worried. I am being a little light in my touch but the concern is quite genuine and is right through government. I am very worried about what is contained in these sections.
I understand amendments Nos. 8, 9 and 26 are being discussed. Section 2B provides that an existing power to fix terms and conditions may be exercised by the relevant employer or Minister of the Government so as to result in less favourable remuneration other than core salary or increased hours for the public servants concerned, notwithstanding any of the terms of any enactment, contract or other document provided for. This is what it states. It is necessary to get the required savings. I hope these powers will not be exercised in the immediate future and that we will have an overarching agreement on the terms negotiated and brokered by the Labour Relations Commission and encompassed in what is called the Haddington Road agreement.
Amendment No. 9 is inconsistent with the terms of the section and cannot be accepted, as it refers to a pay reduction. Amendment No. 26 seeks to amend section 8, which provides a power to the Minister to exempt individual public servants or groups from an increment freeze on limited and exceptional grounds. I explained on Second Stage that it is important there is a residual power for the Minister to exempt individual public servants where an unintended anomaly is created in the circumstances. This is a residual power which is there.
I must tell Senator Byrne that this replicates language already in the original Financial Emergency Measures in the Public Interest Act, which was supported by the Senator in a past existence.
Senator Byrne was not here.
I was not here.
Not in this particular Chamber, but in another.
That is what I thought; he was an unnoticeable.
Will the Minister set out where in the legislation these powers are? That is my next question.
In the Financial Emergency Measures in the Public Interest Act.
The Act states that a power conferred by or under any enactment to fix the terms and conditions may be exercised as follows in subsections (a) and (b). What are these Acts? The Financial Emergency Measures in the Public Interest Acts do not allow the Minister to increase pay; that it is for sure.
The Acts are in the recital of the Bill itself.
I wish to deal with the contributions of Senator Norris. I know Senator Norris takes exception to the notion of an emergency, as if an emergency were an event. We have used emergencies in the past. When Dick Spring was Tánaiste he concluded the last Emergency, which lasted from the end of the 1930s. We took emergency powers when there were very discordant happenings in the North of the island-----
I cited that.
-----and all of this is true.
There is a real and extant emergency and the terms of this are in the preamble and recital to the Bill. It sets out the issues, some of which are that we are still availing of a financial assistance programme. It is my expectation as well as my hope that we will shortly be exiting the financial assistance programme. I do not envisage that these are long-term requirements. The entire financial emergency measures in the public interest architecture is by definition in response to a financial emergency which, with the resilience and forbearance of the Irish people and the determination of both parties in government, we will map our way out of in a decent and narrow horizon.
I thank Senator Norris for his kind remarks about my concluding comments at the end of Second Stage. I was responding to an attack on my party and I should have stated that I honestly believe what was done to put our country back on track could not have been done without the coming together of the two largest parties in the State at that important critical juncture in history, because of the external pressures. Much lesser economic pressures existed at other times when there was a tiny majority, particularly in the other House, and it was very difficult to do what was necessary. In a piece I wrote recently for one of the national newspapers I stated that in years to come, how Ireland got out of the crisis will be written up as importantly as how we got into it, and it will be a legacy not only of the two parties in government but also of the forbearance of the Irish people, who endured when others took to the streets elsewhere.
I will not accept these amendments. This is the fabric that is required. The powers to make these alterations are required to make the savings which are essential to contribute to our economic recovery.
The Minister has not said why it is not possible to do it by regulation.
I apologise; I meant to touch on that point.
I recognise that the Government is doing much that needs to be done; we do not always agree with the exact direction of it, but the figures overall are agreed. The Government constantly speaks about the external pressures that existed when it came into power. At some point will the Minister list the external pressures he and the Tánaiste, Deputy Gilmore, keep speaking about that existed subsequent to the signing of the IMF agreement? Effectively, the State was bankrolled by the IMF in November 2010; whether we like it or not, this is what happened. The Government was following a programme and has certainly taken a political hit for taking certain actions. As I stated, we do not agree with the method, but we accept that the deficit must be reduced.
The other point to remember is that when the Minister says he is 85% of the way there, 60% of this 85% comprises measures the previous Government brought into force which he opposed at the time, although he acknowledges now that they were the right thing to do. The crisis resulted in unpalatable policies and Fianna Fáil tried to be as fair as possible.
I have some sympathy with what Senator Norris said, not with regard to whether we have a financial emergency, because we do, but with regard to whether the Bill qualifies as a financial emergency Bill. Senator Norris has raised interesting points. I am not sure whether I fully agree with him, but the issue of allowances has been kicked around for the past year and there does not seem to have been any emergency or urgency about how the matter was dealt with. There was an issue about reducing allowances but it did not happen. This was followed by the Croke Park II talks, which collapsed. Then we had the Haddington Road agreement, and now, after all of this, we have the Bill. One would question whether this qualifies in the same way that the previous measures qualified, although the savings and the impact on people were much greater. The then Government tried to be as fair as possible, but the impact amounted to approximately €2 billion before tax. I may be mistaken on this figure. There were significant hits for the public, but the measures were taken in the context of an immediate emergency, because if we had not done it the country would literally have gone to the wall in the following weeks. That is not the exact position we are in now.
I accept that savings must be made in the public sector pay bill, but this should be done as fairly as possible. I commend those workers who voted against Croke Park II because, by and large, those who brought it down were those who were most affected by the unfair provisions. These were not just about allowances but also about the working week. We certainly came across many of them. Senator Norris has raised interesting points about the Title of the Bill, which lead us back to why it is being rammed through in this very quick fashion. Parliament is being used as a rubber stamp and Ministers will have these powers. I cannot find a copy of the 2009 Act because my phone is playing up, but if the Minister tells me the exact same power to amend terms and conditions is in the 2009 Act I will be happy.
The section refers to any other enactment under which there is the power to change terms and conditions. If the Minister persists with this, I suggest that the best way to do so is by way of parliamentary regulation. However, I will listen to his remarks on the matter.
The Minister is helpful with his explanations, but I am still concerned for a number of reasons. He stated that these powers already existed, presumably under the other emergency legislation that started in 2009. I have a feeling that I voted against them, although I am not 100% sure. I know that I voted against benchmarking and the bank guarantee.
In any case, the powers remained dormant until this legislation. This Bill is the first to give them real teeth. They are like the dormant rights in the Constitution or like dark matter - they are anti-rights that are now being drawn out of previous legislation. The Minister proposed a dangerous principle when he stated that, although this was regrettable, we needed to do it. That is Machiavelli - the ends justify the means.
No one doubts that this is a serious situation, but it is not an emergency. If one suffers from tuberculosis, it is a serious situation, particularly given the fact that certain strains of TB have become resistant to normal antibiotic treatments. However, it is not an emergency, and neither is this. We are not living through an emergency. Rather, we are living through a chronic situation that was caused by a total failure-----
The Senator is straying from the amendments.
I am not.
The amendments are about doing this by way of regulation.
Exactly. I believe that I am discussing that idea, as we are being told that these powers are justified by the emergency. There is a serious situation, but it is not an emergency. The real cause is the dysfunction of the entire system. I sincerely hope that the Minister is right. I said the same to Brian Lenihan when he sat where the Minister is sitting now. Sadly, he proved not to be right. I hope that we will have articles written about how wonderfully we got out of our situation, but I doubt it.
This brings me back to the concentration of powers under this section, a matter that is addressed by these amendments. It is worrying that the Judiciary has been included. It should have been exempted. When the people kicked out the committee of inquiries referendum, the Judiciary was handed over as a sacrifice. Many lies were told. Some 85% of the Judiciary's members gave up their increases voluntarily, yet we were told that none of them had. I am not accusing the Minister, but there was uninformed commentary everywhere.
I remain concerned. The Minister asserts that he is setting this Bill down honestly and openly across the table, but is it honest and open when their hands are twisted behind their backs in a half Nelson? If they can be threatened with the removal of increments and the tearing up of their contracts, that is what this is.
It came from the Minister's heart when he stated that we owed our paymasters, the taxpayers and the citizens nothing less. I wonder whether those are three separate identities. To me, our paymasters are not in this country, as we have lost our independence.
Correct.
The Minister may mean that the taxpayers are our paymasters, but they no longer are. Neither are the citizens of this country our paymasters. Unfortunately, our paymasters are located elsewhere and are the interests of capital. I oppose that. We need to find a more nuanced system, one that is a hybrid of capitalism and socialism.
I will try to address the issues raised. We can have a philosophical discussion on the aftermath of the economic collapse at another time.
It was in response to the Minister's comments.
We are on amendments Nos. 8, 9 and 26.
I will respond to this extent: it may be suggested that, once the previous Administration signed up to the troika deal, the job was Oxo, but that was only the start of our woes. As to the notion that it did all of the heavy lifting, it enacted-----
We must stick to the amendments.
If charges are being made,-----
I will try to control the charges.
Let me respond to them.
We would be interested in the Minister's comments.
We must stick to the amendments and get through the Bill.
Let me respond to the charges that were made, as it was stated that 60% of the heavy lifting had been done before we entered into office. Yes, the 2011 budget was passed, but it was not implemented. The previous Government passed the most draconian budget known on its way out the door. In advance of the election, the leader of my party stated on national television that we would implement that budget. We did not go into the election on false pretences. One can recreate history, but that is the truth. Let us deal in fact and truth.
I stated that these powers replicated the measures in the original Financial Emergency Measures in the Public Interest, FEMPI, Act. I do not know if Senator Byrne's mobile telephone is operating again, but I will point him to section 2(6) of the Financial Emergency Measures in the Public Interest (No. 2) Act 2009, which reads:
This section has effect notwithstanding--
(a) any provision by or under--
(i) any other Act,
(ii) any statute or other document to like effect of a university or other third level institution,
(iii) any circular or instrument or other document,
(iv) any written agreement or contractual arrangement,
or
(b) any verbal agreement, arrangement or understanding or any expectation.
This measure was set down in the enactment passed by the previous Administration with the support of the Senator opposite.
I wish to pick up on Senator Norris's point about my putting trade unions in a half Nelson. As a country, we are in a half Nelson. I can pretend that we are not or I can wish up a new hybrid social model. I have strong views in that regard. Unfortunately, I must live with the hand of cards that I have been dealt. Until we exit the programme, we have only one funder - the troika - that will give us money at anything like an affordable rate. The troika has set down hard conditions. We did not negotiate them, but we have renegotiated many of them to their improvement. However, we must live with other conditions that constitute a half Nelson on us all until we rid ourselves of it and resume normal funding. Hopefully, that can be achieved soon. It is measures such as this section that will enable us as a people to get out of that half Nelson.
As to fairness, the pay element of reductions in this legislation starts at €65,000. The previous Government started pay reductions at zero. Every euro one got was impacted upon. This Bill is more nuanced and fairer and has been negotiated. I believe and hope that it will be supported by a significant number of public servants, but that is a matter for them.
The Minister has something of a cushion, in that he can leave the direct pay cuts to the higher paid. He is not trying to save as much money as was sought under the previous legislation. I am trying to get a copy of the Act, but I would be grateful if the Minister could confirm that the section he quoted-----
I shall pass it to the Senator.
That would be helpful. I do not know whether it relates to the power of a Minister, as his quote did not mention that. His quote referred to tearing up contracts and I accept that that was what the Act permitted. We will accept the Minister's comments, but he did not answer the question as to why these measures could not have been made by way of regulation, which is a different beast from a ministerial decision.
I will make a final comment and then we will move on. This is one of the Bill's most important sections and I am grateful to the Minister for his clarity and honesty and for placing on the record the subsection in the 2009 Act. This section is bad, but that subsection was worse. They are both damnable. If I was around, and I must have been, as I voted against the bloody thing-----
I believe the Senator did.
I am "agin the Government", whatever its complexion.
Senator Norris would not have been himself otherwise.
I thank the Minister. His information has been helpful. My instinct is 100% against this provision, but I would be overwhelmed and it is time to move on and face the reality.
The arithmetic does not stack up to give us a chance, but at least we will have put the arguments on behalf of the people, just as the Minister's heart is on their side. I do not envy him his job. When I was in my office, I heard him indicate that he had been privileged and honoured to be asked to do his job, but, on the other hand, if somebody else wanted to take over, he would not weep bitter salty tears. I can understand this. I am concerned about this section and the increase in powers for which it clearly provides. I take it the Minister has acknowledged in his powerful comments about the half-Nelson that our paymasters are outside the borders of the country.
Does the Minister have anything further to add?
We are addressing that issue. For the foreseeable future, like all countries, we will be borrowing money and it depends on who loans us the money. In normal market circumstances we borrow the money and simply pay the interest; it would not come with a string of conditions attached that would determine fiscal policy. We want to get rid of that element soon.
The troika members are our paymasters.
I will make a general point now that the issue has been raised by Senator David Norris. I blame the Fianna Fáil Party for the language used. The Senator wants to remove the influence of the troika, as we all do, but we should not forget that the troika is made up of public sector bodies. The IMF is a United Nations organisation and the European Commission is effectively part of our democracy. We will be delighted to get back to the bond market, but who is in that market except for private sector financiers and bankers? That is the dichotomy. In the last few years of the last Government the IMF was presented as a bogey man, which was a major failure. It should have been seen as a rescue package. However, we are where we are, as was said a lot at the time.
During our debate on amendment No. 8 I made the point that section 2 gives the Minister very novel powers and takes power away from Parliament. I thank the Minister's officials for briefing me during the Vote and it proved useful. Part of the reason that I called for a Vote was to seek clarification.
The Minister did tell me that the 2009 Act contained a similar power or provision. It does not. I have been advised that there is a general power for Ministers to vary terms and conditions and I accept that. In my view, it is extremely rare for powers to be used in an adverse manner or for contracts to be interfered with by anybody.
I have a difficulty with the section, apart from its novel value for giving powers to a Minister to make decisions on an ongoing basis. If the Minister already has these powers then why must we enact them today? The provision acts as a threat and hangs over people. The Haddington Road agreement made a provision for the Minister to make changes but section 2 hangs over the people who will vote on the agreement. The provision acts as a threat and that is wrong for two reasons. First, it is wrong for a legislative threat to be made to ordinary workers and their families. Second, it is wrong to give Ministers these expressed powers in legislation. The Oireachtas can enact Bills to cut pay. We do not like doing it but sometimes we are forced to do so. The quote the Minister cited the last time related to the 2009 Act and not to a specific power contained therein for Ministers. In fact, there are no specific powers contained therein for Ministers analogous to the power that is being granted in the section. There is a difference. It is wrong to give Ministers these powers and it chips away at democracy.
Another example of chipping away at democracy are the changes being made to local area boundaries following the submissions made and results provided by the commission. The Government has adopted the constant tactic of chipping away at democracy and wants to take powers away from Parliament to give them to Ministers. It wants to abolish the Seanad but appoint a group of experts who are its cronies. The Government has moved away from its promises.
Significant adverse changes to the terms and conditions of employment of public sector workers, whether in regard to core pay or allowances, should be put before the Oireachtas, if applied on a general basis. I object fundamentally to the powers being granted here.
The reason the 2009 Act had general application was that it was indiscriminate - it simply cut everybody's pay from €0. What I am trying to do is to take a much more nuanced approach. The only pay cut will be that in excess of €65,000. I want to give protection to those who want to register agreements with the Labour Relations Commission in order that we have the flexibility to deal sector by sector in a way that is captured in this section.
The Senator was quite happy to have an overarching let us cut everybody Bill but not a more nuanced one, which states we will be discriminatory and will focus on those who can afford best to carry the burden, that is, those earning more than €65,000, and where there is a buy-in to a freely negotiated brokered deal under the Labour Relations Commission and where Ministers at sectoral level will have the power to deal with it sector by sector. The power already exists and my officials explained it to the Senator. For example, in the case of the HSE, the legal powers are devolved under the Health Acts to the HSE to make those decisions. I want clarity that it resides with the Minister.
There was a High Court decision yesterday which determined that a decision made by the Minister for Education and Skills was ultra vires because that power should have been properly exercised by the VEC and not the Minister. For that level of clarity in regard to workers generally, it is important this provision is here.
As I said, I hope there will be an overarching agreement with the Irish Congress of Trade Unions which will make all of this moot because the full deal, as worked out by the Labour Relations Commission and negotiated with trade unions, will apply across all sectors.
I will vote against the section because it contains a fundamentally coercive element, which concerns me. It undermines democracy when we say to people that they can vote but that if they do not vote the way we want, we will give them a slap. That is basically what is in this section. The Minister may say we are in difficult times and we need to take drastic measures. He is well able to speak for himself and the record will show what he said. I should not try to put words in his mouth and I do not propose to do so but that is what it appeared to me to be. I do not think anybody could deny that this is a coercive section and it is intended to undermine the freedom of individual trade union members and trade unions groups to vote in the way they want. They will be slapped and financial penalties will be imposed on them if they do not agree. I cannot bring myself to agree with this.
In regard to the specific items agreed in the Haddington Road agreement - for example, Sunday pay for those affected by it - if it turns out later in the year, or early next year, that the Minister is not getting the savings he requires, could this section be used by various Ministers? If the Minister for Health has a deficit this year, as he did last year, could he forget the provision in the Haddington Road agreement, which guarantees Sunday pay, and cut it under this section?
I agree with the previous speakers. I was not going to involve myself in this debate as I was waiting until the next section but there is a point to be made about the extraordinary powers which have been given to the Minister and the Government in regard to these pay cuts and the other measures in the Bill. I am the workers' rights spokesperson for my party and part of my responsibility was to meet the various trade unions before and after the Croke Park II negotiations. The majority of, if not all, the trade union leaders we met, including those affiliated to the Minister's party, were very concerned about the very draconian measures which would be contained in this legislation. They labelled this as threatening legislation. They were also very concerned that their members were being coerced into voting for a deal which, essentially, was not in their best interests.
The Minister of State, who was here in the Minister's absence, said to wait to see the outcome of this vote. It is a possibility that the majority of workers might vote "Yes" but only on the basis that they are being coerced. They feel that if they do not vote for what is on offer, the Minister will impose what is in this Bill and then impose something even worse. That goes to the heart of this.
We had a discussion earlier on what might constitute low and middle incomes but if one is on a wage of €70,000 or €80,000, one's partner or spouse is out of work and one has three or four children, when one looks at the deductions and the net pay, it is not a massive wage. It is a comfortable wage but not a massive one. When one cuts such people's take home pay, it has an impact on the domestic economy and on their ability to be able to spend, which is one of the reasons we are not getting-----
Sinn Féin has become very middle class.
The Minister said earlier one cannot escape the working class. I do not know whether he was including himself in not being part of the working class but I would look at it a bit differently.
At €150,000, we are all working class, according to the Senator's definition.
I would look at it a bit differently from the Minister. I look at this on the basis of whether it is economically-----
Senator Cullinane, without interruption.
I thought I had escaped the working class but it seems to be all over the place nowadays.
As I said earlier, we can look back at a whole raft of promises the Minister's party made in opposition. The Minister raised the issue of us seeking votes.
Senator Cullinane on section 2.
The Minister is being entirely disingenuous. I know for a fact that if he was sitting where we are sitting now in opposition and this Bill was being brought forward by a different Government, he would not support it. I do not know any Bill which cuts the wages-----
Senator Cullinane on section 2.
This is about the section and the powers being given to the Minister. If a different Government brought forward a Bill such as this which gave the powers to a different Minister and a different Government, included provision to cut the pay of people on €65,000 and €100,000 and involved cuts to people's overtime rates and increments, the Minister would not support it. I do not remember the Minister supporting any such measures when he was in opposition or any Government budget either.
It is very frustrating for us at times when the Minister sits there and accuses my party of playing politics for opposing his policies. That is what the Opposition does and what he and his party did when in opposition. They voted against Fianna Fáil budgets and pay cuts in the public sector and cuts to the public sector generally. Now they are in government, they are doing exactly the same but are not prepared to accept any criticism or any charge of hypocrisy because they seem to think that if they do it, it is somewhat different. I will come back to some of those issues in the next section because it might be more appropriate.
I will deal with some of the issues raised. The coercive issue raised by Senator Norris and others that if the trade union members do not accept this, the consequence will be worse. Let me be very clear. I believe in the principle of solidarity. If the employer opens the books and says there is a crisis and that he or she wants the workers to make a contribution to solving that crisis, it is not reasonable to allow some people to say "No", that they are a unique group and are to be exempted from it.
I do not accept Senator Norris's view of the Judiciary that some of the best paid people should be exempt.
I do not say that.
It was right and proper-----
I must correct the Minister. What I said was that an incorrect impression had been given that none of the judges, or a tiny minority, had accepted voluntary cuts - 85% did.
The problem is that it should not have been a matter of choice for people on that level of pay when it was not a choice for others. It was important that the rule would apply to everybody. I do not think any section of workers can simply decide that the rest of the population can carry the burden and that they are exempt because they say so, with no consequences. That cannot be right. We must have the power to ensure that the claim that some should be immune from this is not allowed to sit. That is why this power is contained in the legislation, should it be required. My hope and expectation is that it will not be exercised at all because I am hopeful of an overarching agreement being reached with the Congress of Trade Unions. That, however, is a matter for individual unions and individual union members to determine.
In response to the specific question from Senator Byrne as to whether Ministers can vary the Haddington Road agreement, the answer is "No". It will be a solemn undertaking by Government and it will not be a matter for the Minister for Education and Skills or the Minister for Health or any other Minister to tweak certain elements. The exercising of that power will have to be done with my consent.
I do not know whether I should allow myself to be drawn by Senator Cullinane again but I will make one comment. I remember, in advance of and immediately after the last general election, the leader of the Sinn Féin Party, Deputy Adams, saying that what we should do as a State was send the troika home and tell them to take their money with them. That was a brilliant economic strategy. It would have meant that would have had literally no public expenditure because our economy would have collapsed. We would not have been cutting pay but doing what collapsed economies do, namely, letting go hundreds of thousands of workers, closing schools, hospitals and so forth. While "send the troika home" is a lovely soundbite, it is economically illiterate. That was the basis on which the general election was fought.
It is important, as we emerge from the disaster that this Government inherited, that we have a clear sight of the pathway to recovery. As we, please God, enter into a better place, there will be many different versions of the truth. No doubt, Fianna Fáil will say that it was its own brilliance in bequeathing a budget to us that pushed us on the way or the fact that it spancelled us into a troika deal set us on the path to recovery, while Sinn Féin will have a different view of it all. We need to clearly and properly acknowledge the hard lifting that was done by the Irish people and the cohesion of two large parties, trusted by the people, above all else. Senators have spoken about broken promises but the one important promise, above all else, was that we would regain our economic sovereignty and return our economy to a safe place. That is a promise we are determined to keep.
Is section 2-----
I am sorry to interrupt but I wish to make one brief comment. The Minister has confirmed what I felt in what he said and I regret that. He appeared to suggest that people had no right to withhold their assent from these proposals.
There has to be a consequence to it.
Yes, and that is precisely the point I am teasing out. If they do not have the right to dissent or if that dissent will lead to punishment, why give them that right in the first place? Why consult them? Why not just ram it through? The flaw in the argument, in my opinion, is that it suggests that democracy is discretional and that is a dangerous road to go down.
Nobody would deny that this Government inherited a disaster. It was an absolute disaster and it was partly, though not entirely, manufactured by the previous Fianna Fáil Government. I was against every measure it produced that helped to lead us there. It was not entirely the fault of that Government but it was partly so. In that context, I have sympathy with the Minister but it seems to me that, implicit in the Minister's comments, is the idea that the democratic element of trade union negotiations is now discretionary. I do not think that should be the case. We will have to differ on this point. Indeed, we may even differ on whether that really is the Minister's position.
It is not my position.
He says, very clearly, that it is not but I believe it is. We could argue about it all night. I am only a politician so I cannot be trusted. I am saying it now and will not speak again, but one never knows.
The Minister talked about consequences for people who are in trade unions who may vote against the Haddington Road agreement. The membership of the CPSU, for example, is mainly composed of clerical workers, many of whom would be in the low to middle income brackets to which I referred earlier and will not be in the over €65,000 bracket. The reason those workers will say "No" to this deal-----
The Senator might let them vote.
I will let them vote. The leadership-----
They must vote before the Senator can say what they will do.
The leadership of the CPSU is recommending a "No" vote.
I ask the Senator to speak to the section.
We will see what the outcome of the vote is but a "No" vote has been recommended, to put the point differently, because of the impact the agreement will have on those in the lower and middle income brackets not just in terms of pay cuts, but also the increment freezes, additional working hours and so forth. That is why the CPSU is recommending a "No" vote. I do not want to get into a Punch and Judy show with the Minister about what Sinn Féin or the Labour Party said at the last general election but he used the phrase "economically illiterate". That phrase was used by Fianna Fáil at the height of the Celtic tiger against my party and possibly even the Labour Party as well. I would remind the Minister that my party was not in government before or after the Celtic tiger and our policies are untested. Therefore, to say that they are economically illiterate is a false charge. The Minister also referred to what Deputy Adams said after the last election-----
We are dealing with section 2 of the Bill.
If the Minister is allowed to make a charge, then I must be allowed to respond to it.
I am trying to keep everyone on the section before us.
I will finish on this point. He talked about-----
Section 2, please, Senator.
The Minister spoke about sending the troika packing. It was not so long ago that it was Frankfurt's way or Labour's way.
On the section, Senator.
What about that for a soundbite?
I wish to be clear, in response to my friend and colleague, Senator Norris, that democracy is not optional. However, Senator Norris cannot get into his car and decide to drive on the right hand side of the road because that is his democratic right. Societies do not operate like that. There are consequences. One can exercise one's democratic right to absurdity.
I would not be jailed for trying to persuade the Government to introduce laws to change society-----
The Minister, without interruption please.
People are perfectly at liberty to reject the Haddington Road agreement. At the same time, it is reasonable for me to say that we need to make savings, or rather, we must make them and this is what I propose to do. This is the democratic Chamber that will make a determination on that. The elected representatives of the people set out the law. No more than one can decide to drive on the right hand side of the road because one feels a flush of Americana, one cannot decide that one can reject this agreement without suffering consequences. It is not equitable, fair or reasonable-----
What would the consequence be of campaigning or voting to drive on the right hand side of the road?
Senator Norris has spoken on a number of occasions already. I ask him to allow the Minister to speak.
It is not equitable, fair or reasonable to expect workers on the front line, for example, to carry the burden while others refuse to carry it with no consequences. We must lay out the savings that are required and negotiate to see if we can reach an agreement on that. Failing that, Government must govern because we must have a sustainable path and must ensure that there is pay and pensions for workers this year, next year and into the future.
Is section 2 agreed?
If I was driving on the right hand side of the road, I might end up with a black eye.
Amendments Nos. 10 to 21, inclusive, are out of order.
Amendments Nos. 23 and 24 are out of order.
Amendments Nos. 25 and 32 are related and will be discussed together.
I move amendment No. 25:
In page 11, before section 7, to insert the following new section:
“7.—Section 2 of the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 is amended by the substitution of the following Tables for the Tables in that subsection:
“Table 1
Holders of certain offices and allowances
Table 2
Hospital Consultants with total annual remuneration over €150,000
Many people find it difficult to accept that when so much is being demanded of them, they are being treated differently from Oireachtas Members. We heard this on the doorsteps during the recent by-election campaign and we hear it every time we interact with members of the public, especially at budget time. On Second Stage, the Minister commented on the current salary of the Taoiseach compared to the salaries of previous Taoisigh. People believe public officeholders and Oireachtas Members are being treated differently from them. The Bill provides an excellent opportunity to tackle the pay of Deputies and Senators and to slash additional payments for officeholders such as Ministers, abolish payments to committee Chairmen, group leaders and others. Were this amendment to be accepted, people would find it easier to stomach the measures in the legislation. Some of the payments in question are not acceptable. We should not protect the salaries of certain individuals, especially in times of recession.
Amendment No. 32 seeks to abolish the pay increase for super junior Ministers. There is no justification for paying someone an extra €17,000 for the privilege of attending Cabinet meetings. Elected politicians should consider it a privilege to serve at Cabinet and use whatever unique skills they may have at the Cabinet table for the public good. The pay increase for such Ministers should not proceed.
I will not accept either amendment. It is unconstitutional to cut the pay of the President. It would not be possible to reduce the salary of the President as it is set in the Constitution. I am not sure it was the intention of the Senator to reduce the entire remuneration of all officeholders in the House to nil. The amendment would result in a 100% reduction in the remuneration of the Leader and Deputy Leader of the House, leaders of the Opposition and assistant Whips, all of whom would be expected to turn up for work for no pay. I do not believe that was the intention.
I move amendment No. 27:
In page 14, between lines 2 and 3, to insert the following subsection:
“(3) The pay reductions in this Act shall apply to all bodies in receipt of state subventions, subsidies and transfers including those in the Schedule to the Act of 2009.”.
I welcome the Minister to the House. It is frequently stated in the House that where the chief executives of bodies in receipt of State subvention or subsidies earn more than the Taoiseach, they should at least be liable to have their salary reduced to the level of the Taoiseach's salary, which I understand is €180,000. There are advocacy bodies and so forth which have extremely highly paid chief executives. It would not be out of line, given all that the Minister has said about the cutting of the pay of nurses, teachers and so on, if the Minister were to prescribe formally in the Bill or as a rule of thumb that we cannot pay chief executives more than the Taoiseach and that some penalty must apply to the staff of such bodies whose pay exceeds €65,000.
The Minister amended the Schedule to remove two bodies from the principal Act of 2009. While I support this change, I wonder how some of the bodies in question were included in the legislation in the first instance. Perhaps he will consider removing some of them from the list.
On the section relating to chief executives, the review of the assets and liabilities of State bodies examined the pay of some of the chief executives of these bodies. Some of those who have been deemed to be exempted from the legislation, unlike nurses and teachers, include the chief executives of the Dublin Airport Authority, Bord Gáis Éireann, Bord na Móna, Coillte, the ESB, EirGrid, Dublin Port, Irish Aviation Authority, An Post and Raidió Teilifís Éireann, who earn €560,000, €394,000, €231,000, €417,000, €753,00, €407,000, €317,000, €324,000, €500,000 and €326,000, respectively. These are remarkable figures, all of which are earned by individuals in the public sector. They are more remarkable given the reduction in salary taken by the Taoiseach and Ministers.
Average pay in the State bodies is also high. It is €51,700 at the State airports, which is 58% more than the average private sector income to which the Minister referred. In Bord Gáis Éireann, average pay is €77,200, while average pay at Bord na Móna, at €46,900, is the only case where it is lower than the public sector average. Average pay at Córas Iompair Éireann, Coillte, the ESB, EirGrid, the Dublin Harbour Board, the Irish Aviation Authority, An Post and Raidió Teilifís Éireann is €54,000, €63,700, €94,300, €96,700, €110,600, €120,300, €49,200 and €65,600, respectively. Should those employed in these bodies not be treated the same as those who earn more than €65,000 elsewhere in the public sector?
The Minister stated that the average salary in the public sector is €46,000 and the reductions will be applied to salaries well in excess of the average.
Given those numbers, there must be many people who have been paid increments and increases under the Schedule 1 exemption. Some of the others are even stranger. As far as I can see, although it is an independent body commercially - I believe that was the purpose of Schedule 1 when the late Minister, Brian Lenihan, introduced it - between 2001 and 2010 Horse Racing Ireland received €538.7 million in transfers from a levy, which is a form of taxation, for which I am sure the Minister could have found alternative uses. In the same period Bord na gCon received €135 million. It appears those bodies are commercial for the purpose of Schedule 1 but they know where the Minister is when they are seeking €530 million or €135 million. In the case of CIE, for some years it has received up to €800 million in subsidies. That suggests that those on the list should participate in the adjustments for which I voted earlier. Some very strange exemptions have occurred. The Irish National Stud lost €4.7 million in the year in which that committee reported and over the decade it lost €1.8 million per year, but again, it knows the Minister for Public Expenditure and Reform and the Minister for Finance will pay up. Is that body in the public sector? With regard to the exemption of ESB, our electricity costs are higher than anywhere else and are always above UK costs in international surveys. The airport exemption is amazing. There was a reduction, as the report notes, of 25% in the number of passengers going through the three airports in the years to 2010, but a 2% reduction in staff, so although there was a huge reduction in productivity, the staff were being paid increases and were not subject to the levies. What the report says is that we must regulate those bodies much more harshly and on a more commercial basis. In fact, in the case of the airports, the former Minister, Mr. Noel Dempsey, exempted them from regulation and gave them a 41% increase, which precipitated the 25% reduction. We need proper regulation by the energy regulator, as our gas prices are also high.
With regard to the exemption of these extremely highly paid people in the public sector under that Schedule, I support the Minister in his removal of two of the bodies, but the inclusion of some of the bodies appears to me anomalous. By exempting them the Minister increases the cost base of the economy, and he may find them knocking at his door seeking a subsidy to pay the increases that they get by being exempt under Schedule 1. When we have asked for such a contribution and sacrifice, some of these factors might be examined. I say this as a supporter of the Bill. For how long more should Schedule 1 remain in place? I compliment him on the removal of two bodies, but in general, we should not have a situation in which bodies whose members are earning more than the Taoiseach are coming to the Minister seeking assistance, subsidies, subventions or funding.
I am always attracted to the Senator's arguments. The whole purpose of the Bill is to make a saving for the Exchequer in the pay and pensions bill. To cut pay in the commercial semi-States would not accrue any money to the Exchequer. One could suggest a new levy of an appropriate amount on these bodies to make them pay it back to us, and I suppose that would be possible. However, there is a commercial mandate for companies. We should have an open and clear debate about this. When I established a cap of €200,000 on public servants' salaries shortly after the Government came into being - that cap has been reduced many times, and we are all well below that now - I put another cap of €250,000 on the salaries of commercial semi-State chief executives, which we have enforced. The Senator may be aware of the Hay rates. In order that ESB is not equated with Bord na gCon in its treatment, there is a hierarchy of boards and an appropriate differential between each of the chief executives. We can forward a copy to the Senator. We have proportionately reduced that to fit into the €250,000 cap and it has been a challenge to enforce it. One of the issues that has come up time and again is that if one is trying to drive a commercial mandate one needs people of commercial capacity. To be blunt, one will certainly get people to fill the posts - there is no difficulty in doing that - but the question is whether one can find the right people, with the appropriate skill sets, to drive what are in some cases multi-billion euro enterprises, while one is fishing in the same pond as other commercial entities. One issue arises, although it is probably not for today. The reason we have taken such a hard line on high pay is on equity grounds, because we know the pressure that is falling on ordinary citizens in this economic crisis. The problem that arises again and again is that of holding on to people of high calibre and quality in the public sector. It is something on which we need an open and honest debate.
I am not minded to accept the Senator's amendment. We need a commercial mandate for those companies we want to be in public ownership but to compete in the commercial sphere without being hampered. We had a similar debate when were talking in general terms about whether the commercial semi-State companies should come within the remit of the freedom of information provisions in the same way as companies. That fact that a company is in State ownership should not spancel it from competing on a level playing field with privately owned companies. I made the decision in respect of the National Treasury Management Agency because it is paid from the Central Fund and so the savings will accrue to the Central Fund, and similarly in respect of the Railway Procurement Agency because it is paid from the Exchequer. We can have a debate about whether all of the bodies should be excluded, but certainly the blanket inclusion of all is not warranted.
The other impact of the amendment, in terms of extending the provision to anybody who receives money from the State, would be a very broad blanket and would include charities and so on. I have strong views on the levels of pay in some charities, but I do not think we can say that because the State makes a contribution to any organisation we can control the pay scales in that organisation. That would be a bridge too far.
I thank the Minister and will not push the amendments. As he said, there are items in there that are debates for another day. I believe measures to regulate charities are being considered at present. I wish the Minister every success with the €250,000 cap.
I move amendment No. 28:
In page 14, subsection (1), between lines 29 and 30, to insert the following:
"(e) an actuarial assessment of the impact of this reduction in pension related deductions will be published annually.".
This is a brief amendment. The Minister referred earlier to a reduction of €125 in the pension levy. The concern I have is based on the report of the review group on State assets and liabilities, which stated that the State bodies had a pension deficit of €3.4 billion, while the assets were 69% of the obligations. There was other legislation here, with universities, the ESRI and the Institute of Public Administration, where bankrupt pension funds were lobbed in. My fear is that, left to themselves, this generation - I include myself in that - will award each other added years and lower contributions, but will there be an actuary to say, "By the way, guys, you have blown it. The pension fund is now broke."? That is a suggestion, although I will not push it. When we give away €125 to this generation, what will be left in the pension fund? The Minister for Social Protection has published documents showing that we need to get serious about pensions. We have raided the National Pensions Reserve Fund to a huge degree and, according to the review group, we have €3.4 billion in net liabilities in pension funds. I am worried about the proposal to give people €125 as a sweetener. It comes at a cost, and that should be explicit.
If we are left to ourselves, we will raid the pension funds, have a party now and do nothing about planning for the future, which is the reason we got into this trouble in the first instance.
Obviously, that is a much wider issue than what is involved in this instance. The Senator will be aware that we have a new overarching pensions provision that I brought into force, having brought it through both Houses of the Oireachtas, one year ago. It came into force on 1 January last and comprised new pension provisions generally.
The pension related deduction is not a pension contribution. I made this clear when I met the trade unions during the negotiations. They had raised the issue of the pension related deduction or levy, as we call it normally. They made the case that when added to their regular pension contribution, the result was that they would never get the benefit of it. I made it clear that the pension related deduction was part of the financial emergency measures in the public interest, FEMPI, architecture and that it would lapse. It is not a permanent feature and, therefore, cannot be regarded as a permanent contribution to pensions. What I am doing is signalling the beginning of a little payback to workers in the public sector of a modest €125 a year. The burden of annual reporting outlined in the amendment is not warranted and would be unduly prescriptive.
I understand the general point the Senator is making. The Comptroller and Auditor General is undertaking an analysis of total pension liabilities because the most recent analysis is somewhat dated and we want to get a clear picture. We have changed the entire architecture with the new Public Service Pensions (Single Scheme and Other Provisions) Act which came into force on 1 January last.
I will not press the amendment. I again thank the Minister for his elucidation and determination to build a properly funded pensions scheme.
I move amendment No. 29:
In page 15, subsection (2)(d), line 16, after “review” to insert the following:
“to include confirmation that a financial emergency continues and to include confirmation that the Schedule to the 2009 Act should continue to apply”.
Amendments Nos. 30 and 31 are related and may be discussed together.
I move amendment No. 30:
In page 15, before section 13, to insert the following new section:
“PART 2
REPEAL OF SECTIONS 6 & 7 OF THE SUPERANNUATION AND PENSIONS ACT 1963
13.—Sections 6 and 7 of the Superannuation and Pensions Act 1963 are repealed and this provision shall come into effect immediately on the passing of this Act.”.
These amendments are straightforward. They deal with the pension calculations of former senior civil servants and county and city managers. They seek to apply retrospectively to them the changes the Minister has recently introduced for new entrants to the public service. They are aimed at curbing pension payments to former Secretaries General and city and county managers. Their purpose relates to the point we have been making all along, that is, if one wants to make savings, one must start at the top and reduce the pay and pensions of those who earn most. The Minister has articulated previously that this cannot be done retrospectively and I imagine he will say as much again. I call on him to elaborate on why exactly it cannot be done retrospectively and why he will probably not accept the amendments.
The Senator is right: if we were to accept this amendment, it would only have prospective impact. We have had this discussion before. We cannot retrospectively alter these conditions. We have already fundamentally altered the top level appointment committee, TLAC, terms and all new appointments made since shortly after we came into office have been on the revised terms. It was a surprise to many of us. I have been around these Houses a long time and as far as I can recall, the TLAC terms were introduced in 1987. They applied to Secretaries General and some others, including county and city managers. We have already altered the terms, but we cannot retrospectively alter them for those who already have these rights.
I move amendment No. 31:
In page 15, before section 13, to insert the following new section:
“PART 2
REPEAL ARTICLE 78 OF THE LOCAL GOVERNMENT (SUPERANNUATION) (CONSOLIDATION) SCHEME 1998
13.—Article 78 of the Local Government (Superannuation) (Consolidation) Scheme 1998 is repealed and this provision shall come into effect immediately on the passing of this Act.”.
Amendments No. 32 has already been discussed with amendment No. 25.
I move amendment No. 32:
In page 15, before section 13, to insert the following new section:
“PART 2
REPEAL OF STATUTORY INSTRUMENT NO. 28 OF 2012 OIREACHTAS (ALLOWANCES) (CERTAIN MINISTER OF STATE) ORDER 2012 (S.I. NO. 28 OF 2012)
13.—Statutory Instrument No. 28 of 2012 Oireachtas (Allowances) (Certain Minister of State) Order 2012 (S.I. No. 28 of 2012) is repealed and this provision shall come into effect immediately on the passing of this Act.”.
Amendments Nos. 33 and 34 are out of order.
When is it proposed to sit again?
On Tuesday, 11 June, at 2.30 p.m.
