Vol. 514 No. 6
190 Mr. Sargent asked the Minister for Finance his views on whether the State's profits have risen by 120% in the past five years and the State's wages bill has only risen by 49% and the level of increases for high earners has been greater than that among low earners. [5228/00]
The State does not have profits as such but the Deputy may be referring to the change in the difference between the income and expenditure of the Exchequer in the past five years, which has moved from being in deficit to being in surplus. It is true that depending on the measure taken the Government's finances have improved by a greater extent than the increase in the Exchequer pay and pensions Bill. However, I am not clear on the inference that the Deputy can take from this.
The main factor influencing the increase in the pay bill over the past five years has been increases in the pay rates of public servants. I assume the Deputy is not suggesting that public servants should have received increases in excess of the terms agreed between the social partners in the successive national programmes. Apart from any other considerations, this would inevitably have had an impact on private sector earnings and damaged our national competitiveness.
In addition, I do not share the Deputy's apparent equanimity about the rate of increase in the Exchequer pay and pensions bill over the past few years. We are inevitably facing some fall-off in the extraordinary high rates of economic growth that this country has experienced in recent years and annual increases in the pay bill of the order of 9% and 10% are simply not sustainable in that context.
Our membership of EMU, and the lack of national discretion in relation to exchange rate and interest rate changes, highlights the importance of public expenditure and taxation as elements of economic policy. In order to meet the requirements of the Stability and Growth Pact, it is essential to maintain control over public expenditure, of which public service pay constitutes a significant part. Prudent economic and budgetary policy has delivered major benefits to all of us and the Government is determined to ensure that this will continue to be the case.
Nor am I clear what the Deputy has in mind when he refers to high earners and low earners. Developments in the pay of public servants at all levels are governed by the pay agreements which form part of successive national programmes. I think what is important in this area is the need to respect the terms of those agreements and to ensure that wage increase are such as to maintain our competitiveness. However, the Deputy may wish to note that the new Programme for Prosperity and Fairness contains a package of measures – including measures in relation to pay, a statutory minimum wage, taxation and PRSI – which is specifically designed to address the particular position of the low paid.
