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Seanad Éireann debate -
Tuesday, 12 Dec 2017

Vol. 255 No. 1

Public Service Pay and Pensions Bill 2017: Second Stage

Question proposed: "That the Bill be now read a Second Time."

I thank the Members for facilitating the Bill.

This Bill seeks to implement the provisions agreed in the Public Service Stability Agreement, PSSA, 2018-2020, of earlier this year. As such, it continues the pay restoration that began two years ago with the Lansdowne Road agreement and with the Financial Emergency Measures in the Public Interest, FEMPI, Act 2015. This Bill provides a roadmap for the full and orderly unwinding and repeal of FEMPI over a number of years.

Many Members here will have been in the Seanad for the FEMPI 2015 Act; some of them will even have been here for the first FEMPI Acts, in 2009. Whether a Senator was here or not, he or she will be aware of the enormous impact that this emergency legislation has had, both on individual public servants and on the Exchequer. Nobody will need convincing that it has entailed considerable sacrifices from public servants and their families, from pensioners and from contractors. However, those sacrifices were necessary to secure the fiscal survival of the State at a time of crisis and the contribution made by public servants must be acknowledged and saluted.

The FEMPI Acts were an extraordinary suite of measures necessitated by an extraordinary set of circumstances but, remarkably, what they were designed to do has almost been achieved. Therefore, I am pleased to say that we are today in a position to set out how we will exit FEMPI, once and for all.

Essentially, there are three interlinked aspects to the Government's strategy in this area. There is the PSSA, which builds on and extends the Croke Park, Haddington Road and Lansdowne Road agreements to the end of 2020. This agreement has been ratified by the public services committee of ICTU. There is the Public Service Pay Commission, the first report of which earlier this year was key to the PSSA, and the second phase of the work of which has now begun. This second phase will examine recruitment and retention issues, where they exist, across the public service. It will conclude by the end of next year, with its first findings, on the health service, due by mid-year. Finally, there is this Bill itself, which I will now discuss in more detail.

At this juncture, I am required by Standing Orders to state that this is a money Bill containing measures which have already been provided for in the budget and it provides for the repeal of emergency legislation.

As such, the Bill, with the full agreement of the Dáil’s Business Committee, has not been the subject of the usual pre-legislative scrutiny. I would also ask the House to note at this point that both the Central Bank and the European Central Bank have been formally consulted in respect of the Bill and that the latter has published its opinion on its website. As a result of those consultations, the Government made some technical amendments on Committee Stage in the Dáil to ensure the independence of the Central Bank.

This is substantial and complex legislation. The majority of the measures are of a financial nature. It is divided into seven parts. For the benefit of Members, I will now outline its main provisions.

Part 1 is a general introductory section setting out the basic terms that will be used throughout, including "covered" and "non-covered" public servants. It also provides for the repeal of the 2009 Act, so that the pension-related deduction will cease to apply to public servants as of 1 January 2019, as from that date the additional superannuation contribution shall apply.

Part 2 is the most substantive part of the Bill. It provides for pay restoration for all public servants, supplementing the increases under the FEMPI Act 2015. By the end of the process outlined in this part, all of the FEMPI pay cuts will be undone. Chapter 2 provides pay increases for all public servants covered by the Public Service Stability Agreement, as set out in that agreement. There will be a pay increase of 1% on 1 January 2018 and a further 1% on 1 October 2018. Where the person’s salary does not exceed €30,000, there will be 1% increase on 1 January 2019. For all public servants under the Public Service Stability Agreement, there will be a 1.75% increase on 1 September 2019. Finally, where the person’s salary does not exceed €32,000, there will be 0.5% increase on 1 January 2020 and, for all public servants under the Public Service Stability Agreement, there will be a 2% increase on 1 October 2020.

In Chapter 2 there is also a new section which was added on Committee Stage in the Dáil. It provides that the Government shall, within three months of the Bill’s enactment, lay a report before both Houses of the Oireachtas on the equalisation of new entrants’ pay. In light of the concerns raised by Deputies, the Government agreed to this measure, although it should also be noted that there is already a process in place to examine this issue as part of the Public Service Stability Agreement.

Chapter 3 provides for the same pay increases for those not covered by the Public Service Stability Agreement, but at a slower rate. Specifically, they will receive every pay increase I have just outlined exactly nine months after their covered counterparts. In addition, as section 21 sets out, they will not receive any incremental increases for the duration of the agreement. It is the Government’s ambition that every public servant will be covered by the Public Service Stability Agreement. The vast majority of public servants have subscribed to the collective approach agreed with their representatives and must be prioritised when it comes to further pay restoration.

Chapter 4 outlines how the measures I have just outlined will interact with the pre-existing commitments under the FEMPI Act 2015.

Chapter 5 deals with those public servants for whom the pay measures in the Public Service Stability Agreement will not have fully restored pay to pre-FEMPI levels. The vast majority – those earning up to €70,000 and who make up about 90% of the total public service – will have had their pay fully restored by October 2020. However, for the minority I am speaking about here, this chapter will complete that process over a further time period. There are two different cohorts covered by this chapter: those earning between €70,000 and €150,000 and those earning over €150,000. In both cases, the Bill provides that an order must be made by the Minister for Public Expenditure and Reform specifying a date after 1 October 2020, the date of the last pay increase, by which full restoration is to have taken place. For those earning less than €150,000, this date must be no later than 1 July 2021. For those earning more than that amount, it must be no later than 1 July 2022.

I remind Senators of three factors relating to these measures: first, the legal entitlement of these individuals to this restoration; second, the fact that these individuals were proportionally much more severely affected by the pay reductions and are having their salaries restored at a much slower pace than those at lower salary levels; and, third, that while their gross pay will be restored, the additional superannuation contribution, which I will outline in a moment, will act to reduce take home pay on a permanent basis. Finally, in relation to this part, section 20 specifies that all members of the Government will be altogether excluded from this further restoration. Moreover, the Government has decided to waive all of the restoration due under the Public Service Stability Agreement.

Part 3 is shorter and concerns pensions. As well as those currently working, the FEMPI Acts affected many public service pensioners. Just as there is pay restoration and a legal imperative to complete it, there must be further amelioration of the public service pension reduction, PSPR, for those still liable for it. This is done through the phased raising of thresholds, continuing the process which was begun under the FEMPI Act 2015. By the end of 2020, the vast majority of public service pensioners will no longer have any reduction to their payments. For those still liable for the PSPR, the Minister for Public Expenditure and Reform must make an order by 31 December 2020 specifying when it will cease to apply.

Part 4 is also about pensions but in this case it is about how public servants contribute towards their pensions. Since the first FEMPI Act eight years ago, public servants have paid a pension-related deduction, PRD, on all of their earnings. This will continue until the end of next year, as set out in the FEMPI Act 2015. However, the Bill repeals the original FEMPI Act 2009, so that no PRD will be charged after that date. Instead, as provided for under the Public Service Stability Agreement, the majority of public servants will pay an additional superannuation contribution, ASC, from 1 January 2019 onwards. This secures substantial funding towards the cost of public service pensions, amounting to approximately €546 million per annum from 2020 onwards and it will be in addition to some €700 million already contributed on an annual basis. This permanent source of revenue will help to defray the cost of providing pensions for public servants into the future and is necessary to place public service pensions on a more sustainable footing in light of the significant accrued liabilities. Unlike the PRD, the ASC is only chargeable on pensionable pay.

The additional superannuation contribution will apply differently depending on whether a public servant is a member of a standard accrual scheme, a fast accrual scheme or the single public service pension scheme. For those who joined fast accrual schemes before 2013, the ASC rates that will apply will be the same as the PRD rates. For those in standard accrual schemes, the ASC rates will be more favourable than the PRD rates as the threshold will be raised in 2019 and again in 2020. For those who are members of the single scheme, namely, all new entrants to any part of the public service after 2012, the ASC rates will be more favourable again. This reflects the fact, as the report of the Public Service Pay Commission found, that this scheme is already on a more sustainable basis than those that preceded it. For those not covered by the agreement, a larger proportion of their salaries will be subject to ASC compared to covered workers until 2021. However, from 2021 onwards the same ASC rates will apply to both covered and non-covered public servants.

I am sure Senators will appreciate that this is complex. It is difficult to present in the time available all of the information regarding percentages and thresholds, which is far better conveyed and understood in tabular or in written form. It is enough, however, to say at this juncture that the effect of the ASC becoming a permanent feature of the pay and pensions landscape is that public servants will henceforth pay a fairer contribution for the pension they will eventually enjoy upon retirement. That is what this part of the Bill achieves.

Part 5 places certain provisions of the FEMPI legislation on a permanent, non-emergency footing. These provisions relate to the power to vary the fees paid to contractors, mainly health professionals, for services and goods rendered. The exercise of such a power would of course only be possible where a contractual right to vary exists.

Parts 6 and 7 deal with transitional arrangements and miscellaneous provisions, including transitional arrangements for the payment of professional fees. As part of these transitional arrangements and in the context of exiting the FEMPI legislative framework, the Minister for Health has announced that he intends, in consultation with the Department of Public Expenditure and Reform, to initiate a process of engagement in 2018 with relevant representative bodies on service delivery, contractual reform and associated fees.

This process will aim to conclude a multi-annual approach to fees, commencing in 2019, in return for service improvement and contractual reform in line with Government priorities for the health service.

The orderly repeal of the financial emergency legislation is an important milestone in the history of the State, just as the achievement of the medium-term budgetary objective was in the recent budget. Future historians or economists might see this recovery, from their detached perspective, as in many ways a rapid turnaround, relatively speaking. However, the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, and I are conscious that it may not feel that way to those who have lived through it. In fact, they will not feel that way. After all, by the end of the agreement it will have been almost 12 years since the first FEMPI measures were introduced. Notwithstanding that fact, given the fiscal constraints we operate within and the overriding priority for stability and sustainability in the public finances a careful and gradual unwinding of these reductions is the only sensible way to proceed.

This approach is about balancing these requirements with our responsibilities to restore pay for the public servants who contributed so much to the economic recovery from which we are currently benefiting. It is on that basis that I commend the Bill to the House.

I thank the Minister of State for attending the House. I think the last time he was here he was dealing with the mid-term economic review. It is the season of goodwill to all, however, so I am sure we will have a nice, peaceful discussion this afternoon on the Second Stage of this Bill.

I welcome the opportunity to speak on the Public Service Pay and Pensions Bill 2017. The Bill will legislate for the provisions in the Public Service Stability Agreement 2018-2020 made between the Government and the Irish Congress of Trade Unions. The Public Service Pay Commission report was published on 9 May 2017 and was intended to form the basis for the negotiations between the Government and the public sector unions and staff representative associations. The establishment of the Public Service Pay Commission was agreed in the confidence and supply agreement between Fine Gael and my party, Fianna Fáil. It was set up to facilitate agreement on the successor to the Lansdowne Road agreement.

Fianna Fáil has long called for the unwinding of the FEMPI legislation in a fiscally responsible manner and for an agreement that would see a fair deal for public sector workers, in particular those on lower and middle incomes. As a result of the financial crisis in 2008, FEMPI legislation was enacted in 2009 and again in 2010, 2011 and 2013. As part of the gradual unwinding of the FEMPI legislation, the Haddington Road agreement and the Lansdowne agreement were negotiated. Fianna Fáil was not part of those negotiations. However, we believe it is in the interest of the country that the agreement reached is sustainable and fair, particularly for lower and medium-paid workers. It must also allow for more public services to be provided, particularly in health and education. It is imperative that we have strong, sustainable public services. The public relies on these services and it is of the utmost importance to all of us that they are put on a stable footing.

The agreement was ratified by the ICTU, which means that it is agreed across the board. However, individually, the three teacher unions, the ASTI, the TUI, and the INTO, have yet to ratify the agreement. How this will be dealt with is an outstanding issue. As chair of a school board in a school with staff who are members of different unions and none, it is big concern.

Fianna Fáil was prevented by Dáil rules in bringing forward amendments that would have represented a charge on the State finances. As we all know, various money messages and so on are necessary. These amendments would have been ruled out of order and would not have been discussed. Instead, on Committee Stage in the Dáil, we put forward an amendment that would require the Minister for Public Expenditure and Reform to report back to the Oireachtas no later than March 2018 on pay equalisation. The Minister of State referred to it in his contribution. This amendment was passed and we hope that it starts the process towards pay equalisation.

The Bill will remove the effect of the FEMPI legislation for the vast majority of public service workers by 2020. The Minister also referred to this in his contribution. However, many issues remain and need to be raised and considered. Neither the agreement nor this Bill addresses pay equalisation. This means that, despite doing the exact same job, workers who joined after 2011 will still be paid less than their colleagues who took on their posts before then. The agreement states that any solution to the issue must not give rise to implications for the fiscal envelope of the agreement. However, this issue is the main reason the agreement was not ratified by the teacher unions. The Bill will postpone pay restoration for those unions that did not agree to the agreement. This is not unprecedented and ICTU has agreed that individual unions need to sign up to the agreement. It is of utmost importance that the issue is not allowed to escalate further and that industrial action is avoided. Fianna Fáil has long been calling for the Government to come up with a plan to tackle the issue. It is also worth remembering that this is only the Second Stage of the Bill. Further detailed discussion will take place on Committee Stage.

We need to acknowledge that pay inequality is causing dissent in the public sector and is putting pressure on new entrants. When we ask two teachers to teach classes, we pay them differently. When we ask two gardaí to walk the streets at night to protect us, we pay them differently even though they face the same level of danger. The three teacher unions, particularly the INTO and the TUI, have concerns about this Bill which are based completely on pay inequality. We need to move towards addressing those concerns.

Another important issue is staff retention and recruitment, which is affecting many sectors of the public sector yet this agreement fails to deal fully with it. In areas such as nursing and the Defence Forces, numbers have been falling to critical levels. This not only affects the services themselves but also the conditions under which existing employees are working. While the Bill addresses some of the grievances for public sector pensioners, they are not happy with the speed of restoration.

While this agreement will cost €880 million over the next three years, or €1.1 billion over four years, the bulk of the cost will be loaded to 2019 and beyond. The cost in 2018 is €180 million. Unwinding the FEMPI measures on a fiscally sustainable basis has always been a core policy objective for Fianna Fáil. During the financial crisis, the legislation was enacted, but we have unwound much if through this agreement.

Fianna Fáil believes that, in the interests of the country, the agreement reached will be sustainable and fair, particularly for lower and medium-paid workers. It must also allow for more public services to be provided. It is imperative that we make these professions attractive for younger people in order to ensure that we can provide the workforce needed for our growing population. Our public servants are key to providing the services which our population needs and demands.

It is a good day that the Bill is going through. I hope that by the end of the week we will have included many people across the public sector who will benefit somewhat from these provisions. The Minister of State referenced the pension related deduction. I remember for a long time being a councillor and paying a pension-related deduction although none of our pay was pensionable. We were paying a pension-related deduction without getting a pension at the end of it. There are many other people in the public sector who felt very aggrieved at the time. However, it is a positive thing that is happening. I have outlined my concerns and my party's concerns but we are supporting the rapid passage of the Bill through the Houses. I think those who will benefit from it would like it to be done sooner rather than later, and before Christmas.

I welcome both the Minister of State to the House and this legislation. As we all know, going back to 2009, the FEMPI legislation was brought in for various reasons. Basically, the economy fell asunder and something had to be done. I compliment this Government and the two previous Governments on the enormous work they did to bring the public finances back to a position where we are currently able to pay our way. The economy collapsed and the IMF was brought into the country. Everyone's pay was either reduced or taxed through the universal social charge or otherwise. Many Bills were brought to this House over the years. For instance, judges' pay was reduced, which was unthinkable at one stage. It was said it could not be touched, but it had to be done for the sake of the economy. Every sector of society, including the public service, suffered greatly over a ten-year period. As I said, there were a number of Acts. We enacted FEMPI legislation in 2009, 2010, 2013 and 2015 and now this Bill shows the path towards full restoration of public pay until 2021.

I am delighted this legislation is being brought in. It contains the final roadmap as to how everything will be restored. Many people made great sacrifices. People working in the public service had acquired large mortgages and cars and had to pay for education for children. When they saw the reductions in their pay on numerous occasions, it was very hard for them to take it. I am delighted that we have a roadmap that will restore pay and pensions in full by 2021.

Senator McDowell outlined how good the public service pension is at 50% of a person's wages. However, there have been changes to that as well. Heretofore, many public servants could have received a pension after a certain number of years, whether it was when they reached the age of 50, 60 or 65. In future, the vast majority of people will not get a pension until they are 66, 67, 68 or even 70. There have been many changes to pensions and there will be further changes to come. The public service pensions we saw in the past will not be as generous in future. While people in high office will finish on a certain salary, their pensions will be aggregated over their time in the public service. That is a big change as well.

There is also a big change in when politicians get their pensions. Previously, Members of the Oireachtas could get a pension at 50, provided they had the required service and made pension payments. However, Members of the Houses of the Oireachtas will not now qualify for a pension until they are 66, 67, 68 and probably up to 70 in the not too distant future. We all know the vulnerability in regard to politics. Members are in the Oireachtas for an average of 12 years. It is a very vulnerable business for anybody to be getting into. The time spent here is quite short and one might have to wait until one reaches 67, 68 or 70 of age for a pension. One could be a Member of the House for a number of years and then be out on one's ear at 50 or 60 years of age, at which point I do not know what one would do. One would probably be unemployable by the time one leaves Leinster House.

I welcome the legislation. There are three parts to it, as the Minister of State, Deputy O'Donovan, said. It provides the roadmap to the full restoration. It refers to the public service stability agreement, PSSA and the Public Service Pay Commission. I warmly welcome this Bill. I commend the people who faced hardship over the past ten years and who can finally see where they are going for the future.

I thank Senator Paddy Burke for speaking up on behalf of those of us who are new entrants to the House. Our conditions will not be as good as the Senator's as he is here that bit longer.

And Senator McDowell's.

I think Senator McDowell outlined his own conditions earlier. He is probably okay relative to some of the newer Members.

I welcome the unwinding of the financial emergency measures in the public interest, FEMPI, reductions and adjustments as it makes sense at this stage. Of course, there is another angle at which we have to look, namely, those areas where there is two-tier remuneration, with a view to ensuring it is equalised or got rid of as soon as possible, unless there is a very strong case that the prior level of remuneration was excessive. People doing the same job in the public service should have roughly the same salary.

There are two points I want to mention in particular. I have to declare an interest in that I have an accrued public service pension of sorts as a Member of the Oireachtas, as an Attorney General, a Minister and a Tánaiste. However, under changes brought in, I am not in receipt of that pension now because I am a Member of the Oireachtas. I make no complaint about that. It was payable as soon as I left office. Senator Paddy Burke made an important point in that if the pensionable age is to be raised to 70, a Deputy who gave the best of her or his life in 20 years' service from the ages of 30 to 50 is going to have to wait a long time to see the benefit of any accrued pension if 70 becomes the starting point.

In law, the Supreme Court has ruled that pensions are deferred remuneration. We have to realise that in our country, we are not the same as say the United Kingdom. Former MPs and former Ministers, in particular, could look very easily to alternative employment having lost their seats at Westminster. That is not the case here. There are few enough former Ministers of my generation and the generation before that who have been endowed with directorships and jobs of that kind on their retirement. On the contrary, it seems that most of the private sector, at any rate, shies away from them. I am not whingeing about myself, just in case anybody thinks I am. However, most of the private sector wants to appear apolitical. Businesses do not want somebody who was, in former times, a Minister and who may or may not have been controversial in his or her time, sitting on their boards. There is not a huge gravy train at the end of public life in Ireland if and when the electorate decides to dispense with one's services. One's memoirs might get a few thousand euro on a good day and a couple of libel suits to boot. One might end up in the red with that enterprise.

In terms of one's capacity to end up in the media, I notice the BBC is very generous to former politicians. It allows them to do this, that and the other. In Ireland, we seem to be a little more abstemious in this regard.

If we want to attract people who already have substantial incomes into politics, it will be increasingly difficult unless they have a very generous State or semi-State employer, such as a university, RTÉ, which would give them leave of absence or the teaching profession from which they can get a leave of absence of sorts, or analogous positions to those. To hazard one's entire prosperity and one's family's means of support on the idealism that is required to go into politics, to put one's name on the block and to make the sacrifices that are part of becoming a politician will become increasingly insuperable and the obstacles to participation for those people will become more and more insurmountable.

We should be very careful about making sacrifices in the hope of appeasing some people in the media when the net result is that the kind of people who go into politics becomes narrowed down to those who have nothing to lose. That is not a good idea.

The last point I want to make relates to judicial pensions. Some time after I left office as Minister for Justice and Equality, a Bill was passed in these Houses which increased the number of years that a judge would have to serve, from 15 to 20, before he or she would get a pension. The consequence is that in order to obtain a full pension as a judge, which is half of one's salary from the date of retirement at 70 years of age, one has to have been appointed a judge at the age of 50. One cannot say at the age of 48, for example, that one will be a judge in two year's time. The world does not work that way. To be considered eligible, suitable and desirable as a judge is not something within an individual's own gift. If a top solicitor or barrister who is making decisions in his or her mid-40s about whether to seek promotion to the bench succeeds in that enterprise by the age of 50, that person is probably not at the top of his or her career at the time of becoming a judge. The 15 year rule allowed people to become a judge at the age of 55 and by that stage, they probably should be at the top of their career because they are not going to become much more successful thereafter unless something great happens to them in their declining years. We should restore that particular provision to 15 years to make it more attractive to people at the top of their careers to seek judicial appointment.

I would make one more point that I hope is not taken badly by the Minister or the Department. The section which changed the pension criteria from 15 to 20 years was hidden away in a Schedule to a large Act. No reference was made to it in the explanatory memorandum. I checked the Dáil and Seanad debates but no reference whatsoever was made to the fact that it was being done. It was a sleight of hand between two Departments to achieve something in total secrecy. None of the Members of these Houses had their attention drawn to the fact that they were making that change. It was a bad idea that was never debated in either House of the Oireachtas and the sooner it is reversed, the better. It is suitable as an amendment to this legislation.

I thank the Minister of State for coming to the House today. I empathise with Senator Paddy Burke when he refers to political vulnerability, particularly when there are retired Mayo footballers coming onto the political pitch. However, I cannot concur with what was said around pensions and vulnerability in the context of some of our former taoisigh earning in excess of €20,000 for an hour's work delivering after-dinner speeches. The issue of judicial appointments and scrutiny of same will have to keep for another day because we are here today to talk about the pension levy and the Financial Emergency Measrues in the Public Interest Act, or FEMPI.

The pension levy was introduced in 2009 by way of FEMPI. Many of our public and civil servants such as nurses, teachers, gardaí and fire fighters did not believe that the Act would happen. They believed that Fianna Fáil would not go to war or attack them as civil servants. The 24/7 alliance that formed in response, based on the belief that once the Government had started with this one measure it would continue and go after those receiving premium pay packets, was impactful due to its collective activism and trade unionism. Sinn Féin has long been calling for a fair and timely bottom-up restructuring of FEMPI, as the current two-tier system has caused pay inequality. Those with the lowest incomes must benefit before those with the higher incomes in order to reduce this pay inequality.

The failure of our two-tier system is a major contributor to Irish emigration which has led to difficulties in recruitment and retention in our nursing and hospital services, as well as in our education sector. It has also decimated many rural areas which still have yet to see any improvement or to see people returning in any significant numbers. The longer we fail to address and fix the two-tier system, the more it will cost the Exchequer in the long run in terms of services not being delivered and expensive overtime bills. In addition, we are losing some of the most qualified and brightest individuals that Ireland has produced as the two-tier system has caused many of our graduates to leave the country with no intention of returning. This should be of upmost concern for our Government. This is no more obvious than in the severe staff shortages in the emergency department in Mayo University Hospital. That department is down at least five full-time staff since this time last year and cannot operate properly. At the same time, we will see fully qualified nurses coming home for the Christmas holidays and leaving again. We cannot allow that to continue to happen.

Many of our civil and public servants are doing the exact same job as their colleagues but are being paid up to 15% less. This is demoralizing, dehumanizing and fundamentally wrong. Three teachers’ unions and UNITE have all voted against this deal. This Bill will continue payment inequality for civil and public servants who have been recruited since 2011. This is wrong and the Government must acknowledge this very serious and very real concern of our public and civil servants. Sinn Féin has long been fighting and advocating for the right to equal pay for equal work. We are being told that economy is improving, as is the situation of some of our people but the continuance of the two-tier pay system has not allowed our newly qualified teachers and recent nursing graduates to feel this benefit. Industrial action, in particular by the teaching profession, is a very real possibility. Putting into legislation matters that should be the subject of normal industrial relations procedures is quite an aggressive act and will have the effect of angering civil and public servants. It will send a message just like the one from the Taoiseach when he alluded to the possibility of outlawing strikes.

We must work hard to talk about these issues and take action to address concerns rather than just recognise that they should be dealt with and then push them to one side. Failing to acknowledge the concerns of the teacher’s unions will only further exacerbate our recruitment and retention crisis. It is important to acknowledge that the public service stability agreement, PSSA, has been accepted by the majority of trade unions. We will be proposing amendments to this legislation as appropriate. We do not oppose the Bill but we will continue to work with teachers, nurses and other civil and public servants to reverse unequal pay.

I welcome the Minister of State to the House. I note that this Bill has passed through the Dáil without amendment. I also realise that it is a money Bill and it will continue on its journey. While there are measures in the Bill that have already been talked about and praised which are positive and which will lead to a concrete and meaningful, albeit partial, restoration of pay and conditions for many public servants, there are other aspects of the Bill that are of very serious concern. One is the distinction the Bill makes between covered and non-covered parties. That is set out in section 3 and its impact is felt in a number of other sections, including sections 22 and 34 in particular.

Effectively, what we see in this Bill are penalties attached to non-covered persons. I recognise most unions have agreed to these proposals. Those who are members of unions, primarily teachers' unions, which have not agreed to these proposals, are being punished by being denied increments, being asked to make a higher superannuation contribution or by having an increment frozen over a period of three years.

Why are they being penalised? We must go back to the step before what this Bill purports to do. The Minister of State spoke about the contribution made and the cost to public servants during the period of the recession and austerity. This Bill proposes to restore these conditions. Instead, however, it is a Bill whereby the Government will only reward those who have agreed it has done a good enough job in restoration. If the Minister is seeking to restore public pay and increments, as well as reversing the measures put in place, that is a decision for him to make. He makes that decision based on the current state of the economy, on Exchequer returns and after weighing up the issues. The Minister must make decisions as to what are appropriate and achievable levels of pay, increments and pension contributions. What is not appropriate, however, is unless one agrees with the decisions the Minister has made and states they are positive, one will be effectively penalised.

We know it is not a simple and technical measure because the Government made it clear that in three years' time it will get around to unfreezing the pay increments for those who did not agree with these proposals. There has been no suggestion that the non-payment of increments is in any way related, for example, to people not performing their duties or not taking industrial action. This is simply because they have not signed up to the public service stability agreement, PSSA. I do not question the integrity of those unions which have signed up to it. All of them have made their choices. However, in the cases of those who chose not to sign up, their rationale in many cases was that they felt there was not enough urgency in addressing the issue of unequal pay for new entrants and the two-tier pay systems. For many, this decision was made on the basis of a principle of solidarity and equality. Now, we will go from having a two-tier pay system in the public service where new entrants and existing staff are paid differently to having another two-tier system imposed on that. For example, two teachers or two public servants, working alongside each other, doing the same work on delivering the same outcomes with the same level of experience, will now be paid differently based on whether their union signed up to the PSSA. We will now have two layers of a two-tier system. How is this positive for public service morale? How does it indicate we understand the sacrifices made and are keen to reverse them?

I will be putting forward amendments in respect of the differential, disadvantageous, unduly punitive and inappropriate treatment of non-covered persons in this Bill. I am concerned there are measures contained in section 3 whereby a person who leaves a union which has not signed up to the PSSA will potentially be rewarded with their pay increments being restored. Again, there is no indication that might happen but there is a concern we are creating a perverse incentive for people to de-unionise. Trade unions have brought us and contributed greatly to social stability in Ireland at times when other countries in Europe would greatly have sought and hoped for such stability. I am concerned at the potentially negative impact of this Bill's measures on trade union membership, which I believe is a public good and is one of the ways we can ensure industrial disputes are managed in an appropriate way, as well as allowing us find constructive ways forward together. Will the Minister measure the impact of the Bill's proposals on trade union membership? I will be putting forward an amendment to ensure positive steps are taken to encourage the restoration of the tax relief for trade union membership to ensure we are actively encouraging it as a core part of our social stability, social cohesion and our shared future.

We are all aware that several of those trade unions which have not signed up to this agreement, and whose members are likely to be penalised as a result, represent the teaching profession. We have a serious concern about ensuring we are able to recruit and retain high-quality teachers for our next generation. Our education system is the seedbed for our future development and growth in our economy which will, in turn, sustain society. What are the Minister's plans to address the concerns of those in the teaching profession, in particular, and to ensure we re-engage with those issues for new entrants in nursing, the Defence Forces and across so other many areas of public life?

I welcome the comments of the Senators present. It is worth noting the small number of Senators who showed an interest in this significant Bill. The unwinding of the financial emergency measures in the public interest legislation, FEMPI, in such an orderly way affects every parish, community and public servant. I thank the Senators who have stayed for the debate.

Senator Michael McDowell put a personal matter on the record, and I will too. I was a new entrant teacher in 2008. I went back and qualified as a teacher, as did many of my cohort when the country was banjaxed and fell asunder. Many of us, for one reason or another, had been made redundant. We entered into the public service in the full knowledge that we were entering into a different pay agreement and pay rate. That was difficult but nobody has a monopoly on politics as to what is and is not a fair rate and the commitment to unwind it.

The Government has, through the public services agreement, the cornerstone on which this legislation is based, and with the agreement of the unions, an oversight body built into the agreement, which will examine the exact way in which we can make progress on pay parity. This is a matter the Government takes seriously. As a Minister of State I take it seriously when many of my contemporaries are affected by this.

In dealing with it, however, we have to be mindful of the amount of fiscal space we have and the cost of ensuring we can do this. We cannot do it in one fell swoop. We want to do it in an orderly way. That is why the majority of unions and public servants have voted for this agreement. That is why this legislation needs to be enacted as soon as possible to ensure we can pay people on 1 January 2018.

Several amendments were proposed in the other House. One, which was accepted and proposed by Fianna Fáil, provides for the publication of a report by the Minister on achieving parity of pay.

There is provision to ensure the report will be produced by the oversight body that will work with the Department and the officials present.

Many Senators have alluded to the disparity between high and low salaries. It is fair to say this and the previous Government which was in office until 2016 have restored the salaries of most of the lower paid. We have some work yet to do, but our commitment is clear.

Reference was made by the Minister for Finance, Deputy Paschal Donohoe, to the covered and non-covered pay aspects. Anyone who has read the Dáil debates will know that the cornerstone is the public service agreement. Collective bargaining has been the hallmark of industrial relations. I remember as a young fellow in school the Programme for Economic and Social Progress. Senators Paddy Burke and Michael McDowell were probably knocking around at the time. It comes with the territory in having collective bargaining or an agreement. No one wants to go back to the winters of discontent in the 1980s when there was one union after another coming in. We believe in bargaining and negotiating with the unions as a collective. The collective representative organisation is the Irish Congress of Trade Unions and we have no reason to believe we have anything other than full co-operation in how the agreement is will play out. The Government believes everyone is and should be covered by the agreement, rightly so. There will be those who agree and those who do not. Naturally, if people communicate their decision not to agree, there will have to be swings and balances to be struck, as the Minister has pointed that out. Otherwise, what is the point in having an agreement? The agreement is about maintaining industrial peace. In recent years we have come through the worst economic recession since the foundation of the State. It is testament to the public service and three Governments in office, to which Senator Paddy Burke referred, that no strikes were foisted on the people. Schools and offices were kept open and public services continued to be delivered in a winter of tough decisions that had to be taken.

It is important to point out that we have an agreement that is orderly. We know that we want to try to achieve an orderly unwinding of the financial emergency measures in the public interest legislation which no one wants to have on the Statute Book, but we have to work within the amount of money available. It has been pointed out what will be available to us in 2018, 2019 and 2020. We have been very honest and upfront with the trade union leadership. As a former member of the Irish National Teachers Organisation, I understand from where members are coming. However, I know from speaking to individuals on a case by case basis that they are acutely aware of where the State is. We do not want to go back to where we came from. We are working with the oversight body and union representatives to ensure that, ultimately, everyone will be on the same pathway.

I want to go back to a point raised by Senators Paddy Burke and Michael McDowell. It is one on which I agree entirely with them, although perhaps it is a debate for another day. Senator Rose Conway-Walsh also referred to the issue. Senator Michael McDowell is absolutely right. We are going to wind up with politics being confined to a small narrow group who will have nothing to lose. That is not right for democracy. We have had considerable debate on the question of trying to get more women to become involved in politics. I came into the Houses in my 30s, but if he or she is anything south of 40 years of age, a person would want to have rocks in his or her head to put his or her name forward for election He or she would be putting himself or herself in a very vulnerable posittion if he has a wife or she has a husband , family and mortgage, like most of us do. Why, in the name of God, would a person enter politics in his or her 30s, given the way in which it has descended to the lowest common denominator and been run down into the ground?

The first thing I had to say about high pay was that members of the Government were not covered. It is the awful sad reality that every time we have to speak about any resolution, we must apologise for our existence as politicians. We have had debates on the involvement of women in politics, about quotas and young people, rightly so, but we need to start to have an honest discussion in the Houses on what we want from politics. If we want to keep it as the preserve of those who have nothing to lose, as Senator Michael McDowell said, that is fine. I have no problem with it. However, we should at least be honest about it. This place will only have seats for those who, if they are kicked out, will go back to where they had come from. If we truly want to have a representatives sample of the men and women of Ireland, we will have to reflect on what we should put in place. We need to put in place proper systems and schemes that will stand up to scrutiny, be fair and that the media might not like. I have never heard media representatives express views on their terms and conditions or pension remuneration. Everything I do, from the number of biros I keep to the amount of paper clips and toner I consume, is public information, rightly so, and I have no problem in standing over it.

No public servant covered by the agreement should be put in a situation where his or her job will come within the confines of a narrow set. I know that I am moving off script, but I agree entirely. The Seanad would do us all a favour in life if in the new year if it were to have a good, proper and mature adult conversation on the kind of politicians we want to have in this country in the future. If we want all of them to be from the same cohort, that is fine. As is said, we get what we vote for.

I have taken note of the remarks made. The main issue is pay parity and I have dealt with it. I have also dealt with the covered and non-covered pay aspects. It is welcome that amendments will be tabled, but I remind Senators that this is a money Bill and everyone knows that when it comes to money Bills, it is the Government prerogative. I remind Senators that we need to have this done before 1 January. I appreciate the comments of Senator Alice-Mary Higgins about the fact that the Bill is not being opposed. Many public servants are in the wings and want to ensure we will pay them what they are owed under the agreement. That must be the over-riding principle. I look forward to dealing with the rest of the matters raised on Committee and Report Stages.

I thank the Minister of State and again thank all Members. It has been nice and peaceful this afternoon with a Christmas-like season sense of goodwill.

Question put and agreed to.

When is it proposed to take Committee Stage?

Next Thursday.

Committee Stage ordered for Thursday, 14 December 2017.

When is it proposed to sit again?

Tomorrow at 10.30 a.m.

The Seanad adjourned at 5.55 p.m. until 10.30 a.m. on Wednesday, 13 December 2017.