With the permission of the House, I wish to share time with Deputy Kathleen Lynch.
Private Members’ Business.
Public Service Remuneration: Motion (Resumed).
The following motion was moved by Deputy Richard Bruton on Tuesday, 9 February 2010:
That Dáil Éireann:
rejects as neither just nor equitable in all the circumstances the decision made by the Minister for Finance on 22 December 2009 to reverse the reductions in base salary for the highest-paid public servants announced in budget 2010, while leaving the cuts for the lowest-paid public servants unchanged; and
calls on the Government, in the interests of fairness and solidarity, to implement in full the recommendations of Report No. 44 of the Review Body on Higher Remuneration in the Public Sector.
Debate resumed on amendment No. 2:
To delete all words after "Dáil Éireann" and substitute the following:
"—commends the Government for its actions to restore the public finances and for its difficult but necessary measures to reduce the public service pay bill;
notes that public servants have made a substantial contribution towards the necessary reduction in public expenditure, including through the pay reductions applied under the Financial Emergency Measures in the Public Interest (No. 2) Act 2009;
commends the Government for applying substantially larger reductions to the remuneration of higher paid public servants and notes that all reductions are proportionate;
notes the decision of the Minister for Finance to take into account the reduction in the total remuneration package, including the performance related pay, in considering the appropriate reduction to apply to assistant secretaries, deputy secretaries and related grades in the civil and public service;
notes the cumulative impact of the reductions in public service pay over the last 18 months ranging from one third of the net pay of secretaries general and a quarter of net pay of assistant secretaries to less than 8% of net pay in the case of a clerical officer;
further notes that the review body on higher remuneration pointed out in its report that unique among the grades it examined, the pay level of assistant secretaries was lower than or broadly similar to their counterparts in five other European countries;
notes the intention of the Government to ask the McLoughlin local government efficiency review group to examine the senior management structures in the local authorities and a similar review to be carried out by the HSE;
commends the quality of the work of public servants in these difficult times; and
agrees with the view of the Government that it is necessary to engage with its employees on badly needed reform that will deliver the necessary productivity measures and savings in the costs of the public service."
— (Minister for Finance, Deputy Brian Lenihan).
Is that agreed? Agreed.
What we are ultimately debating this evening is an issue of fairness. Is it fair that working people across the public sector, including teachers, nurses, road cleaners, gardaí and others, should see a significant reduction in their wages as a result of Fianna Fáil's mismanagement of the economy? The answer to that question is "No". It is not fair because these people did not create the mess we are now in, yet they are being asked to clean it up.
On budget day last December, like everyone else, I expected to see a reduction in my wages and other measures being taken also. However, for a large section of society, particularly those who are quite wealthy, budget day never happened. Others, including public sector workers, those dependent on social welfare, the disabled and carers, suffered a significant reduction in their income and in State supports. At that time the Labour Party strongly opposed the cuts in public servants' pay. We considered the cuts to be unfair and we rejected the scapegoating of public sector workers by Fianna Fáil and others. Labour's opposition to the public sector pay cuts is well documented on the Dáil record and in various interviews given by our leader, Deputy Eamon Gilmore, and other spokespersons on the party's behalf.
Labour argued instead that significant savings would and could be made in the public sector pay bill through negotiated reforms. Such reforms could have been achieved if the current Fianna Fáil Government had not collapsed those talks with the public service unions last December. We still believe that the reform documents, which were being considered before the collapse of the talks, offered serious scope for efficiency, cost savings and a better service to the public. On being elected to Government, the Labour Party would reopen discussions with the public service unions on these reforms. As part of that process, the party would be prepared to negotiate appropriate pay restoration. This can be achieved on the basis of efficiency, flexibility, value for money and a continuous high level of service to the public.
Perhaps I could ask Deputy Bruton, if he is not talking to Deputy Lee, to give me a few minutes' quietness if he does not mind.
He never spoke to Deputy Lee.
The amendment before the House commends the Government for its reactions to what it describes as restoring public finances. To my mind, restoring the public finances means recovery, but not through a return to business as usual. The latter would mean bailing out bankers, dealing with developers and putting the type of economy in place which initially got us into this mess. It must be borne in mind that the financial crisis is also a political crisis, and one cannot be separated from the other. The financial crisis is a direct result of political mismanagement over the past 15 years.
The amendment before us sets out to congratulate the Government on its recent actions. However, no reference is made to its decisions that led us into this financial crisis, and no explanation is given as to how the crisis began. Furthermore, there is no mention of the Government's campaign of public vilification that has been orchestrated against public sector workers in recent months. We saw a typical dehumanisation process being carried out before the knife was stuck in. This is a well documented process in any socio-psychological situation whereby before one can perpetrate the act, one must first vilify the person who is targeted. That scenario was set out in the public mind by the Government's campaign.
We should put in place a clear and fair alternative in which the shared sacrifice that is now required will be undertaken by all of us to get out of this mess, which was created by a few for the benefit of a few. That should result in shared prosperity for all, rather than a process of bailing out bankers and developers. The Minister is proposing in future to continue to look after those who are close to Fianna Fáil Governments, as they have been in the past.
The motion before us refers to civil servants whose earnings are at the higher end of the scale, even though I know there are people earning beyond €150,000 and €160,000 a year also. I am not in the business of saying that anyone's pay should be cut. If people work hard and have gone up the scale, in the main they are entitled to what they earn. When cuts must occur, however, there should be a degree of fairness. No matter who a person is or what he or she does, they must realise that cutting 10% from someone on €30,000 a year is entirely different from cutting it from someone earning €100,000, €130,000, €160,000 or more. It is an entirely different prospect for low earners because the impact is far more severe. In addition, it will have a knock-on effect, and not just on individuals themselves. It is the only source of income for the people we are talking about who, in the main, are married women with mortgage commitments and child dependants. We must look at the matter in that context.
I have met some higher civil servants who are annoyed that we are trying to cut their incomes. It is not about cutting incomes, however, but about having a degree of fairness. It is about the person who stands at a desk and deals with the public. This country was divided down the middle by the cuts, which unleashed anger against those people because they are recognisable. Higher civil servants on €150,000 or €160,000 a year are not at the front desk and seldom meet the public. Those on low wages do meet the public and we expect the same degree of service from them, yet we are saying that in some way they are lesser beings.
When the Minister for Finance stood up here on budget day, he knew that what he was saying was not entirely true. He knew he was not including the bonuses, which are not bonuses of course. Only a civil servant could have written such a script for other civil servants. A bonus is now part of their income, but how did that happen? How did it get left out of the reckoning? Eight months after we decided to abolish these bonuses, how did they appear all of a sudden as part and parcel of their income, while they are not susceptible to cuts in the same way as everyone else? It sounds convoluted and is hard to follow, but that was deliberate.
I have great time for the Civil Service whose members do Trojan work. This State could not exist without them. Nonetheless, whoever decided to cut off the Deputies' inquiry line as a form of action to oppose these cuts should think again. The only people who benefit are the Government. Ministers do not want us to have the information. They are thrilled that these inquiries are not being answered. How can the Opposition get this information now?
We cannot get it either.
Whoever made that decision should seriously reconsider it. Maybe they should think about a more directed form of action.
When someone has taken a 10% cut in a very low income, one cannot expect them to visit their GP or solicitor as frequently since none of those professional costs is coming down. In addition, train fares have risen as have education costs and accident and emergency charges. These are all matters over which the Government has control. The Government cannot cut one section without taking the rest of the economy into account and ensuring the cost of living is going down across the board, including the things over which it has control. I appeal to those, who decided as a form of industrial action to cut off the very means by which the Opposition can get at the Government, to think again.
I wish to share time with Deputies Thomas Byrne, Mattie McGrath, the Minister of State, Deputy Dick Roche, Deputy Michael McGrath and Deputy Niall Blaney.
Is that agreed? Agreed.
While I appreciate the opportunity to speak on this motion, if ever I saw a "no motion" it is this one because the facts as outlined last night by the Minister are quite clear. Significant reductions have been applied to the remuneration of both grades, 14% in the case of the grade of deputy secretary and 11.8% in the case of the grade of assistant secretary on top of the pensions levy and other reductions that apply to all public servants. It is not correct that there was a large disparity. The facts as put forward last night show that those grades take reductions of a much higher level than was noted or perhaps not clearly noted.
Earlier, Deputy Ciarán Lynch said that we had stirred public vilification of public servants. This is quite untrue and I am tired of hearing it. Every e-mail I get states that we have stirred up vilification against teachers. I was a teacher and never worked as hard in my life as when I was a teacher. It is amazing to put into e-mails the idea that I would publicly vilify teachers. There was no public stirring up of vilification against public service workers. That is a line they have been sold, swallowed, regurgitated and reproduced again in all these e-mails.
Deputy Ciarán Lynch also said when his party came into government it would reopen talks with the trade unions. I sincerely hope that talks will be reopened by then. The transformation agenda is still there and I hope people will start to talk on the basis that Kieran Mulvey of the Labour Relations Commission set out. I have spoken here about it before. He was very forthright when he appeared on RTE suggesting that he could provide a forum in which people could come to talk to him and that he hoped in that way he could address some of the ills and misconceptions which had grown up over that matter.
Deputy Ciarán Lynch also said that when they entered into those talks, they would talk about the restoration of pay. I am hoping that the coming Minister for Finance, who is in the House along with his assistant Minister to be, is taking heed of that. I am quite sure he is.
I agree with Deputy Kathleen Lynch who said that whoever is not answering the telephones is doing an injustice, not so much to the Opposition, but to constituents. Ordinary constituents who want to get answers to their queries cannot do so because of some working out of this vilification of which we speak.
Returning to the motion, quite clearly the higher civil servants of whom we have spoken have taken the hit and at a quite considerable level.
Deputy O'Rourke paid tribute to Deputy Bruton. I would have thought Deputy Bruton would leave his deputy in charge while the vote of confidence was going on in the Fine Gael Parliamentary Party meeting. I saw them all going to that meeting tonight.
They do not need any vote of confidence in Deputy Kenny.
Tonight we are dealing with only one part of the overall budget package which has been pinpointed in a negative context, and that is understandable. While the anger on the issue is understandable, we must consider the budget as a whole, which is what I appeal to the House to do. I ask the Opposition to look at the budget objectively given that we all have the same overall goal of bringing our country back to a state of steady economic success.
On the matter of the second-highest paid public servants, which we are addressing today, we must keep in mind that in 2009 when this so-called performance-related pay or unjustified bonus as it has been more correctly described — which I must say I believe was a scandal — was eliminated, these people took a pay cut above and beyond what other people in the public service were asked to do. These individuals now have a major responsibility to drive reform in the civil and public service. That is a message that needs to go out loud and clear from here tonight.
In comparison to other countries, this country under the Minister for Finance, Deputy Brian Lenihan, and the Taoiseach has handled the economic crisis with a determined attitude. We have been prepared to make the necessary sacrifices that others were not. It must be said that this was in the face of consistent opposition from the Opposition. Sacrifices have been made across the board, particularly by the unemployed. Greece has already been forced into a bailout, whereas we have held strong and avoided this measure. The public disorder predicted by many for this nation has happened in Greece. The leadership and sacrifice from the top down has prevented that from happening here. People were crying out for leadership. When they see what is happening in Greece this week, they know that this party has provided that leadership here in the past year. That is a fair judgment and assessment to make.
Cuts have been made across the board in an attempt to regain financial stability in this nation. For those who do not accept that the cuts are hitting the highest paid hardest, the facts are that secretaries general have lost, I believe, 33%. Assistant secretaries, when this so-called bonus is included, have lost a quarter. While we do not like cutting anybody's pay, clerical officers have lost 8%. The percentages have been much less lower down the scale and have been greater higher up the scale. No one wants to do this; we all hate doing this. However, thanks to the leadership offered by this party in government, the comparisons to Iceland and Greece made by some in our nearest neighbour have fallen off the radar.
Recently we have seen the anger over financial decisions that had to be made. I completely relate to this and have dealt with it head-on in my constituency. However, we must look at the figures, including those relating to consumer confidence. One aim of the budget was to restore consumer confidence and the latest ERSI report indicated that consumer confidence is at its highest rate since January 2008. That is very important and the Opposition has a role to play in encouraging that consumer confidence because we need to get people to spend and we need to get the saving rate down from the very high rate at which it has been.
All the decisions of the budget have been part of a long-term plan to bring the country out of debt. It is a plan that requires sacrifices and patience. It is filled with difficult decisions some of which are popular and some of which are unpopular. Most importantly it is a plan that has worked thus far in comparison to other countries. I am happy to say I support every aspect of the budget because I support the overall plan of which these changes are an intricate part. I support the Minister for Finance, Deputy Brian Lenihan, and respect him for the decisions he has had to make. I trust he is doing what is best for the country based on what he has done already and on what he has yet to do.
I wish the Taoiseach well as he goes to Brussels tomorrow to extend the hand of friendship, example and leadership to the birthplace of democracy in its hour of need. In short, this is a vote of confidence in the two Brians and I am full-square behind them.
I am delighted to have the opportunity to speak tonight on this motion, because I am extremely unhappy with the current situation. I believe that politics is about trying to effect change and I did that on this occasion to the best of my ability. I have fought a hard fight within my party since before Christmas to try to effect change, but I am sad to say that I have failed on this issue.
Since our parliamentary party meeting last week, I have had a number of meetings with the Minister for Finance, Deputy Brian Lenihan, and the Chief Whip, Minister of State, Deputy Pat Carey, where I vigorously pursued the issue as to why the Government ignored the recommendations of the Review Body on Higher Remuneration in the Public Sector and why we were informed that only 160 people were involved in these changes when we now know that the actual number is 630 and growing.
I believe that this was a retrograde decision, giving bad example to each and everyone within the lower grades of the public service, many of whom are struggling to make ends meet and who, contrary to the myths, work hard on a daily basis in line with the old adage of "an honest day's work for an honest day's pay". I appeal to the relevant grades to whom this reversal applies to show leadership and good example at this late stage and to forgo to some extent the benefits of their new situation. I believe that the bonus system has been a bad policy from its inception and the situation was exacerbated when those same bonuses became cavalierly regarded as income of right, which is now being used as justification for these recent changes.
This is nonsense and is anathema to all right thinking hard working citizens of this country whether they are in the public service or the private sector. I have been told on numerous occasions by lower grade public sector workers that it was on the assessment of their hard work that a bonus was awarded to the heads of Departments, which is clearly unfair. During these meetings I have received assurances from the Minister for Finance that the Government has no wish to seek further reductions in public service pay rates especially from the lower paid and I fully accept this. I have here extracts from the Taoiseach, which are on the record of the House from 27 February 2010, which give these same reassurances.
Having consulted widely over the past week with my constituents and supporters, I have decided that although I am clearly unhappy with the current situation, I am and will be in a far stronger position to effect change from within the Fianna Fáil Parliamentary Party as the majority party in Government.
They wrote the Deputy a good speech.
I also have no desire to support Fine Gael here tonight as it clearly does not have a cohesive economic policy, nor has it had one for some time, as witnessed in the events of the past few days.
It is straight out of the Taoiseach's office.
Deputy Bruton and others who welcomed my support can rest assured that while they offered me a life jacket last evening, I will not take them up on their offer. They would have been better served keeping that for their fellow soldier who slipped overboard in recent days.
The Cabinet is looming for the Deputy.
If only the Deputy could get a bit of support from his party.
I wish the man well in his future career and thank him for his input while he was here.
The Deputy must be allowed to make his contribution.
The electorate of Tipperary South who sent me here to Dáil Éireann with my colleagues, the Minister of State, Deputy Martin Mansergh, and Deputy Tom Hayes, have given clear messages over the past week that they want me to remain within the Government to continue to work on behalf of all the people of south Tipperary to deal with many issues that are of fundamental importance to the constituency. I could name dozens but shall confine myself to just a few. One is South Tipperary General Hospital and St. Michael's unit within it. There is also a need to progress numerous school and road projects.
Our most pressing issues as a Government are to stabilise the economy and to get credit flowing from the banks to hard-pressed businesses and homeowners. It is vital that we stop the haemorrhaging of jobs because of the dramatic effect this is having on families and communities and it is imperative that we ensure that no family home can be allowed to be repossessed, even as there are institutions lining up for repossession orders.
As recent events have shown, the Opposition benches offer very little scope to make a difference. I am in the Dáil to represent my constituents, to make things better for them. I am only interested in making life easier for the people of south Tipperary. I want to help find employment for them. I want to ensure that local issues in south Tipperary have a national voice here in Leinster House. There is no point being locked outside the door when issues relating to my constituency are being debated inside. I do not want to be left alone in the coffee docks of Leinster House, like some lone soldiers from the other parties across the benches, trying to get things done. I want to be in a position to make changes where necessary for the good of my constituents. I may not have been successful this time but my voice has been listened to on other occasions and I have no doubt it will be again in the future. I assure my colleagues on all sides of the House that I will continue to be work hard within my parliamentary party.
How does one follow that from my good friend and colleague, Deputy Mattie McGrath?
I am pleased to have an opportunity to make some brief comments in the time available on the motion as put forward by the Fine Gael Party in relation to this pay issue concerning senior civil servants and related grades. I stand foursquare behind the Minister, Deputy Brian Lenihan, on all the decisions he has taken since becoming Minister for Finance in the summer of 2008. I believe he has performed outstandingly well in that role since that time. He is internationally recognised as somebody who has the courage and conviction to take very difficult decisions. He has set the economy on the right path and made decisions that will help us get the public finances in order. We need to discuss this motion, I believe, on the basis of the facts.
When I learned just before Christmas that a decision had been made to reduce the impact of the pay cuts on assistant secretaries and deputy secretaries of Departments, I, too, was surprised until I looked at the detail. We are all acutely aware of the impact budget decisions have had on the low paid in particular. However, in considering this issue, it is important to look at the package of the three budgets since October 2008, including the one in April 2009 and the budget of last December, as well as the decision in February 2009 to introduce the pension levy. We need to examine the impact of the package of those financial decisions on different grades in the Civil Service and within the public sector generally. It is quite clear from any objective analysis that the progression of the impact on people earning higher levels of pay has been quite aggressive. Consider the main elements introduced in those budgets. Under the pension levy, the first €15,000 of earnings is exempt. The levy is 5% on the next €5,000, 10% on the subsequent €40,000 and 10.5% on earnings above €60,000. The income levy is 2% on earnings up to 75,000, some 4% on incomes between €75,000 and €175,000 and 6% on pay in excess of that. I put those figures on the record to highlight the progressive nature of the decisions taken by the Government in recent budgets.
It is fair to say that there can be no question that the basic principle of "those earning the most paying the most" has certainly been respected by this Government and has been at the centre of its approach to tackling the public finances. Take for example the figures which the Minister for Finance introduced last night. The impact, collectively, of those measures on clerical officers was 7% of net pay but 25% on assistant secretaries at the mid-point, equivalent to more than three times in percentage terms. In monetary terms the cut is equivalent to 14 times greater.
I am the first to recognise that every euro is of greater value to someone on low pay compared to a person earning €150,000 or more, but having said that the cuts have been far greater for higher civil servants. The media would suggest in recent weeks that higher civil servants were not taking any cut at all, or that their cut is relatively smaller, when in fact this is not the case. At the heart of this controversy is the treatment of the bonus in the calculation of the pay cut. It is important to address that issue and acknowledge that the Minister for Finance, Deputy Brian Lenihan, abolished what was a very flawed bonus scheme.
Deputy Bruton was correct last night that bonus payments had become par for the course and were being seen as virtually an automatic entitlement, and that was certainly wrong. It defeated the whole purpose of incentivising civil and public servants to achieve high standards.
Now the Deputy is building that wrong into the whole system.
If a bonus is paid anyway, then of course that incentive is not there. I agree with my colleague, Deputy Mattie McGrath, that the Minister should have been advised of the wider application of this decision to more than 600 civil and public servants following the decision before Christmas. I particularly welcome the fact that the Minister has sanctioned an independent efficiency review of local authorities as well as the HSE.
It is difficult to follow the last two speakers without covering the same ground. However, this is a mischievous motion. The Deputies opposite, and in particular the main signer of this motion, knows more than most precisely the precarious and difficult financial situation of the country. I claim it is a base motion as well because at its heart is an attempt to play on discontent within the public service. I have had the experience of serving at several different grades in public administration in this country and I was a trade union representative for the lower grades in the public service. I am well aware of the difficulties facing a clerical officer, clerical assistant or junior executive officer at the lower end of the scale. However, the attempt to create more discontent in those grades than what undoubtedly exists already is not good politics; it is bad politics. It will divide worker against worker. If they were to reflect on the matter, I believe most of those on the opposite side of the House would recognise it is bad politics.
We are all aware of the situation of the country lately and the recently published Exchequer returns make the position very clear. The 2007 tax take was €47 billion and it is now down to €33 billion. One must cut one's cloth according to one's measure. We could do other things but we tried such other things in the past. Previously, the country tried to borrow itself out of difficulties. The proposer of the motion knows as well as I do the damage that did to our economy. We stultified Ireland's economic development in the 1980s because we doubled and trebled our debt. By 1987, every penny generated from personal taxation went into servicing debt. It was insupportable expenditure.
We are also aware the capacity of this country to raise more taxes in the current circumstances is limited. If we did not cut public expenditure, the Government would have to find the money elsewhere. I give credit to Deputy Bruton in this regard, because he had some difficulty within his own party in arguing for the extent of the cuts necessary. Had we not taken the necessary steps, we would have had to find up to €4 billion in extra taxation and in our heart of hearts we know that is simply not a realistic option. The Government could have simply closed down services. Frequently, that is what takes place in business. Let us consider the unfortunate situation of the workers who heard the dreadful news concerning Halifax last night. Some 750 or 760 jobs will go. We sought to protect the public services to the maximum possible extent and we sought to protect employment within public services.
As everyone in the House is fully aware, public services are delivered through people. The greatest single element in most public service expenditure is salaries. The obvious solution is to trim expenditure to the bone. If one is not to lay off staff, which would be a disastrous policy in my view, one must operate in the area of salaries.
The issue at the core of this debate has been disingenuously misrepresented. I agree that political communications could have been somewhat better. However, it seems we are taking a particular issue out of context, twisting the reality and trying to use the discontent which exists for purely political purposes. That is damaging to the nation and the State and it does not serve to help anyone in the House who proposes a way forward.
The situation has been well explained by the Minister for Finance, who had to take into account that the pay of the grades involved had been reduced already because of the suspension of the schemes of performance related play. The Minister had to ensure such people would not bear a disproportionate amount of the cuts. It is wrong, therefore, to use this debate in the way it has been used. I am surprised and not a little disappointed this is the case.
I will take considerable pleasure in supporting the Minister in this matter because he is aiming to create justice for all workers. There is no easy way out. There are no easy solutions or magic wand. A person who came into this House in a blaze of glory some time ago left skulking in recent days because he found out that fact. The Members who moved this motion are aware that is a fact as well.
I welcome the opportunity to speak on the Private Members' motion before the House. As with other speakers on this side of the House I believe the motion represents opportunistic politics at its best. More constructive motions could have been forwarded, especially by the individual heading this motion. It is in no way constructive and does not take account of all the facts.
We must consider the overall context of the adjustments that took place and the realities of several recent budgets to get an overall insight, rather than simply taking an element of public sector workers and pay reductions in the last budget. It is fairer to examine what has taken place in the past three budgets. In doing so, one gets a better idea of what is at issue and of the differences in pay. Public service salaries up to €125,000 will be reduced by 5% for the first €30,000 of salary, 7.5% for the next €40,000 of salary and 10% for the next €55,000 of salary. This produces overall reductions in salary ranging from 5% to just less than 8% in the case of salaries of €125,000. This is a progressive, measured reduction which provides that those on higher salaries will contribute more.
The reductions in rates of pay for public servants earning in excess of €125,000 are based on those recommended in report No. 44 of the Review Body on Higher Level Remuneration. The review body made recommendations on appropriate reductions on a sample number of posts. Since it was a sample, the recommendations have been extended and adapted as necessary to cover groups not specifically examined. The scale of adjustment provided for in the legislation related to secretaries general, deputy secretaries general and related grades. In reaching the decision, it was emphasised that the pay of assistant secretaries was found by the review body not to be out of line having regard to its comparative rates in the eurozone. This point should be considered very closely in respect of this motion.
It is worth emphasising the Government has applied the pay reductions in a progressive way. As with all adjustments to the cost of public service pay, the result is lower paid public servants have suffered less of a net loss compared to those in higher paid grades. For example, over the course of the three budgets since Autumn 2008, a clerical officer on the mid point of the pay scale has suffered a net loss of 11.7% of pay. The loss is still significant, of course, but let us compare it to the net loss of those on higher pay grades. In the same period, the assistant secretary grade has suffered a net loss in pay in excess of 24%, while a deputy secretary has suffered a net loss of in excess of 27% of pay. These are the facts and figures we must consider in respect of this motion. When one considers the facts and figures, this motion should not be even before the House today, because the facts are stacked against the Opposition.
I have no doubt the motion will be defeated. One good aspect of this motion is it provides everyone with the opportunity to present the facts as we know them. It also affords an opportunity to explain the scenario to the people. It is an opportunistic motion and this gives us a chance to put the record straight. There has been too much misinformation disseminated by Opposition parties and trade unions. Many unions are peddling this view locally to public sector workers and causing further division.
Ultimately, we must get our house in order. I hope we can return to a situation whereby our union representatives could come back into Government Buildings and re-start negotiations not only for the good of the lower paid, but for all public sector workers and to ensure job security and value for money is realised in future.
I wish to share time with Deputies Varadkar, Feighan, Connaughton, Neville, McHugh and Doyle. I trust the Leas-Cheann Comhairle will inform me when I have one minute remaining. I am very pleased to be here tonight to support the motion proposed by my colleague, Deputy Bruton. I note Deputy Mattie McGrath has left the Chamber. The only thing that was surprising about his speech was that it was unsurprising. We heard the speech we expected in that there was an about-turn. The Deputy was on the road to Damascus for a while but turned back very quickly.
It is imperative that we deal with facts. The tables produced by the Government are based on net figures but if we base them on gross figures we will note staff at assistant secretary level are taking a pay cut of 3%. They should be taking a cut of 8%. They are, therefore, effectively receiving a bonus of 5% by comparison with everyone else.
I tabled a question for the Minister for Finance asking him the date on which the Government made its Cabinet decision to reduce the pay cuts for certain senior public servants and the discussions that took place prior the decision. The reply was that the position regarding remuneration was considered by the Cabinet on 9 December, the same day as the budget. However, the budget speech states:
The Government has considered the recommendations of the Review Body and intends to apply reductions to all public servants in the higher pay bands [. . .].
[. . .] Those at the top will lead by example in this national downward readjustment of pay. Legislation to give effect to these substantial reductions in senior level pay will be published shortly.
On 15 December, when the Minister spoke on Second Stage of the Financial Emergency Measures in the Public Interest (No. 2) Bill, which was to reduce pay for public servants, he gave no indication whatsoever that there would be a change to what he outlined in the budget. He mentioned a substantial inequity in respect of section 6. Section 6(a) states, “exceptional circumstances exist (because of some particular aspect or condition of their employment, office or position) in respect of such public servant, class or group and a substantial inequity would thereby arise”. In spite of this, the Minister stated he was taking on board the recommendations of the review group, which stated it “remains in favour of moderate, performance-related award schemes, where bonus payments reflect the achievement of challenging targets, as motivators of excellence.”
Deputy Mattie McGrath congratulated the Minister for Finance on doing away with the bonus scheme in February 2009. It was regarded as a bonus scheme last year but this year it is regarded as part of basic pay. The Government cannot have it both ways and there is considerable inequity in its provision.
There was a Cabinet decision on pay on 9 December and the Minister of State at the Department of Finance, Deputy Mansergh, who is present, made no mention of it. There was no reference to it in the budget speech or during the passage of the Financial Emergency Measures in the Public In. The Taoiseach stated the Bill came into being on 21 December and decided on 22 December, the following day, that he would direct, under section 6, that the pay reductions would not apply. He issued a circular on 23 December.
The Government backtracked. Something happened whereby it made a decision at a late date or, worse, made the decision on 9 December and effectively engaged in a cover-up in the House. The same tactic was used in respect of the debate on NAMA, the IMF and the provision of credit flow. The House is entitled to know the exact advice given to the Government. Was a memorandum provided on 9 December?
Is the word "bonus" mentioned in the contracts of employment for the senior public servants? How many people of assistant secretary grade were receiving the bonuses? Were all of them receiving them? It is a question of fairness. Staff on relatively low pay are taking a cut of 5%, at a minimum.
I hope Deputy Mattie McGrath will see the light again before the vote at 8.30 p.m. and vote with us. It is a question of fairness. The Government is looking after the privileged few and neglecting the lower-paid and middle-paid public servants who are under severe pressure.
This is not a cynical motion, as a previous speaker suggested. Fine Gael has been very honest about the issue of public sector pay. During the benchmarking process eight or nine years ago, it pointed out that benchmarking payments would not be sustainable if funded from tax receipts from developers and banks. We stated they should be based on productivity and efficiencies and that, if the were not, they would not be sustainable.
Fine Gael was the first party to call for the national wage agreement to be suspended and the first to say there should be pay cuts for public servants on higher incomes. It is a testament to the responsibility and strength of the party that it was prepared to do so. There are not many Opposition parties or parties competing to be in government in Europe that were prepared to be as honest as Fine Gael. It probably cost us votes but Fine Gael is all about telling people the truth and pointing out solutions to real problems.
In cutting public service pay, it was crucial that the Government be fair and be seen to be such. The way the cuts were achieved was unfair. It was not right to cut the pay of those earning under, say, €30,000, €20,000 or €15,000. The Government should certainly have protected the first €15,000, €20,000 or €30,000 of everyone's income. The Government needed to be seen to be fair in ensuring that those at the higher level, who could most afford to pay, would take the biggest cuts. This motion states the Government exempted one class of public servant, including those at assistant secretary level and other senior staff in some of the State agencies and local authorities. This undermined the policy that was necessary.
It is important that the Government not only reverse its decision on senior civil servants but also that it not allow senior managers in the HSE to receive the increase. Their receiving it would be an appalling scandal and would further social division, generate more anger among public servants and make it more difficult to implement the policies that must be implemented. We should not allow a second class of people at the top of the HSE to avoid further pay cuts and receive an increase. It is an issue of honesty.
The decision on the pay cuts should have been made and explained when the Financial Emergency Measures in the Public Interest (No. 2) Bill was being discussed before Christmas. It is very clear the provision in section 6 was included in the legislation for a reason. The Minister must have had in mind certain scenarios such as the one in question. There are others that affect disabled people who are earning salaries very close to the minimum wage, as raised by the Minister of State, Deputy Mansergh. This category is one of the exceptions. The Minister for Finance, Deputy Brian Lenihan, must have had in mind that the exception under discussion could arise. He should have been honest about what he was doing when he introduced the Bill rather than make a sneaky announcement, as he did on 23 December when he believed nobody would notice. It undermines every measure he was seeking to implement.
The bonus system was largely a sham. We know that one sets one's own targets, achieves them and thus obtains one's bonus. In some local authorities, every person who applied for a bonus got one. It is not a bonus but a handout.
The Fianna Fáil backbenchers showed their mettle and got great kudos for it when they stood up against the deal the Government almost made with the trade unions with regard to public servants having 12 days of unpaid leave. It will be interesting to see how strong they are on this issue. They were prepared to stand up to the trade unions and all public sector workers when the issue arose before Christmas. Let us see whether they are genuine about their convictions when it comes to standing up to the rich and influential and the staff in the higher levels of the Civil Service.
The Minister for Finance reminds me of the accountant who was once asked what is two and two. The accountant said, "What do you want it to be? That is what was asked of the Minister on this occasion. It appears senior civil servants are the exception to the rule. They succeeded in having an earlier cut regarded as their current cut. It is cynical that the information on this was released before Christmas. People are making huge sacrifices. I accept that many of these senior civil servants have mortgages and are suffering like most people but this measure is sending out a message that sacrifices are for little people and leadership is for somebody else. If we really want to get out of this economic mess, there must be leadership and it must be shown from the top.
The 655 individuals are management personnel working throughout the country in the health service, the Central Bank and hospitals. They did not lead this country, and they certainly would not prove themselves in the private economy.
I hear constantly about sacrifice and mini-revolts within the Fianna Fáil Parliamentary Party. In recent weeks Deputy Mattie McGrath has been very vocal on this issue on local radio in south Tipperary and elsewhere. Who is stopping Deputy McGrath from voting with his conscience? Is it the Minister of State, Deputy Mansergh? Is he leaning on Deputy McGrath and ensuring that his constituency colleague——
I would not dream of obstructing him in any way whatsoever.
He just said the Minister of State was a key figure.
He was so sincere on that side of the House that he wanted to vote with us but he reckoned——
He was following the Minister of State's lead.
Deputy McGrath should be allowed vote with his conscience and vote for the people of south Tipperary. I ask the Minister of State to assist him in that regard.
Hold his hand.
Many people around the country have bought houses, including members of the Civil Service, but there was a bubble in housing. The bonus in 2001 was performance related but there was no performance. It was easy in the market that existed to claim that people could spend as much money as they wanted to spend but we now see that the cupboard is bare and nobody is taking responsibility.
That is what has happened with this Government. Nobody is taking responsibility. Once again, the leadership and the people who matter decide the sacrifices are to be made by the little people. There is an anger among the lower grade civil servants. I can feel it. The Government has caught the mood completely wrong. What it is doing is wrong, and this measure should be reversed immediately.
The Government has made two huge blunders in two years, and it is all to do with lack of fairness. The year before last it made the monumental mistake of treating the elderly in the worst possible fashion in terms of medical cards. Thousands of them marched outside this House. The reason they came to Dublin was because they believed they were being discriminated against and that others were getting a better deal than them. It was reasonable to assume at that stage that whatever else one does, admittedly in the worst of times, one would not make the same mistake the second time.
This is a central issue of fairness, and it has as much to do with perception as anything else. The people who are earning the €30,000, of whom there are many in the public service, genuinely believe that the people at the top are getting away with something they are denied. The Minister of State can put any spin he likes on it, and he can stay here until tomorrow and talk about bonuses and performance bonuses, how they are calculated and so on, but that is the bottom line.
I want to record that what the Government did to the people earning up to €30,000 was shameful. Deputy Richard Bruton's proposal was the plank of the Fine Gael alternative budget and it stood up to every kind of scrutiny. It was tested inside out and the people earning up to €30,000 would not be penalised with the 5% deduction. That is the reason the Government is in trouble today. It is facing more trouble that we can see at the moment, and I hope it will not develop, but there is so much anger at that level. People are asking how the Government expects them to make a living, and the banks and building societies are about to raise the mortgage rates again. How does the Government think these people can live? I have nothing against the cohort of people involved. I am sure they are hard-working people, but it appears they are not being treated in the same way as the people lower down in the grades. No matter how one analyses it, that is what has happened.
I saw a photograph of the Minister of State's colleague, Deputy Mattie McGrath, in the newspaper the other day and he was dancing a four hand reel. He will be dancing tomorrow, but it will be a fast jig to get out of the way of the journalists because if ever he led them by the nose, Mattie did it this time.
The Minister is enjoying this.
I know that. Between the lot of them the Government has made a hames of this issue. I know Deputy McGrath fought with his conscience and it is obvious that he won. That type of thing gives politics a bad name. I call on the Deputy, even though I am sure he has been called already to do this, that if he stands for anything, and I always believed he did — I have no reason to doubt otherwise — there is only one place for him to go but if he follows the flock of sheep that will go through the lobbies in an hour's time, it will be difficult to take that man or Fianna Fáil seriously in the future.
I acknowledge one achievement on the part of the Government. It engaged in a game of divide and conquer. It played it skilfully. Through its spin doctors it manipulated the media and created the public sector private sector divide. Unfortunately, the people left in the middle of the divide and conquer game are faced with a conundrum. They face many problems and challenges, one of them being survival in terms of paying their bills, repaying their mortgages and living day to day in that category.
The €30,000 salary was specified in our pre-budget submission because the people affected are looking at what is happening at the senior civil servant level and deciding whether they will work. They are considering the €30,000 they could get by not working. We have further disincentivised working at a time when we have a spiralling unemployment level which will get worse, particularly in light of the additional taxes, costs and penalties being introduced in the Finance Bill for people who are trying to survive.
Two years ago Deputy Bruton and our leader, Deputy Kenny, who were very strong on this issue, talked about a pay freeze in 2008 and we got hammered for it. I got hammered for it on local radio. Families rang in to say they would never again vote for me because I called for a pay freeze in 2008. That is only two years ago, but the Minister has now taken a very harsh stance on people who cannot survive.
Not everybody is in a position to do their apprenticeship in their own county. Many low-earning civil servants, who have to come to Dublin and rent accommodation, cannot survive. That creates a disincentive to work.
At a macro-economic level, we must get this country working again but we will not do that by penalising people, which is what the Minister is doing. We are creating the paradox of thrift where the people who are in a position to save are continuing to save; the people who continue to save are not willing to spend; commerce is grinding to a halt because people are not spending; businesses are folding up; and there are more and more people on the unemployment register. That is the outcome in this whole debacle — more and more people in an ever-increasing unemployment spiral.
The Minister must look at what is happening. All bets are off in terms of people's survival. They bought houses which they could not afford. Every night they go to bed in fear that mortgage interest rates will go up in the next several months. When the Government sends out a signal that certain civil servants at the higher levels will not be subject to pay cuts, it demoralises and disenchants those affected, leading to a disincentive to work. This is a dangerous position in which the Government finds itself. It is a conundrum out of which it can get by exempting those earning €30,000 and under per annum. It must, however, be addressed in the short not the medium term.
Last year, I issued a statement arguing that public versus private sector was not the solution to our problems. However, as I am not a celebrity Deputy, a guru or an economist but just a straightforward on-the-ground-Deputy it was not covered much. Maybe someone will cover it this time.
At the time I made the point it was hard to persuade those in the public service, particularly those on lower pay, that they were responsible for the country's economic woes. Levies were introduced and we were being dishonest with the public sector, telling them they would have to pay the piper. At the time we were in the throes of protecting the banking sector and keeping financial institutions solvent, a point with which no one argued. The manner in which such moves would be funded, overviewed and how those who caused the problems would be held accountable were being discussed.
However, it was decided we would make the public sector fully responsible. For years Fine Gael called for public sector reform but it was not quite as simple as just pay cuts. The body for higher remuneration from 2000 to 2008 saw it fit to reward those on higher pay in the public sector, including the Taoiseach, Ministers, county managers and others, with a rate of pay increases that far exceeded those given to the lower paid.
The Government amendment takes into account the net decrease to those on higher pay has far exceeded those on lower pay but forgets performance pay has become part and parcel of salary increases. I do not know what a higher civil servant had to do not to get his or her performance bonus. It seems one would have had to have made a major boo-boo and be an embarrassment to one's position before one was denied a performance bonus. To use the performance bonus as an excuse for not cutting salaries in the higher services smacks of unfairness. The Minister for Finance said on the budget day that we have turned the corner because the straws in the wind from abroad indicated a coming out of the worldwide recession. However, it was somewhat premature and most certainly so in the case of Ireland. No matter how quickly other parts of Europe come out of the recession, Ireland will be in the last three to emerge from it.
Ireland has been cushioned by two factors. First, there has been negative inflation except in public service costs which have risen over the past year. Second, interest rates are low. However, as sure as night follows day, serious pressure will emerge for interest rates to go up to prevent the main eurozone areas getting carried away with positive growth figures.
It is delusional that those on the higher and protected public sector salaries should be given a softer landing on basic pay. On Monday I was informed of a young woman working with Wicklow County Council planning department who was paying €800 a month for child care for her two children. She has taken a 25% pay cut and, as there are less planning applications, overtime is very much denied to her. Her husband, a private sector worker, has also taken a 25% pay cut. Their basic costs have continued to rise, however.
I will give the Government one credit. Whoever writes its amendments to our Private Members' motions is a creative genius. Will the Minister of State, Deputy Mansergh, let us know who it is?
Today, I checked the cost of the Government's decision to reverse the pay cuts for higher civil servants. The cost to the State will be €10 million. For the past ten years, I have been asking for €7 million in funding for the National Office for Suicide Prevention to reduce the number of suicides which is conservatively estimated at 600 people a year.
Lives can be saved if the funding which I and many other non-political groups and people request is provided. Ireland has not eliminated or reduced its suicide levels while other countries have succeeded with proper suicide prevention programmes. If the motion is accepted and the Government devotes 70% of the savings made for the State, lives will be saved. In the first half of 2008, there was a 35% increase in suicides. It has been known from research going back to 1897 that in times of recession there is always an increase in suicide.
Various emergencies such as the recent flooding and the freeze-up have been debated in this House and to which there was some response from the Government. There is another emergency in the financial positions and pressures in which many people and families find themselves. Due to their changed economic circumstances some have taken their lives. The 35% increase in suicides warrants an emergency response on the part of the Government. It is not acceptable the Government ignores the issue. There has been a reduction in mental well-being and an increase in mental health problems, substance misuse, relationship breakdown and divorce as a result of the economic pressures on individuals, families and society. The Government easily made a decision to increase salary expenditure by €10 million but it still will not consider increasing funds for suicide prevention by €7 million.
This debate has provided the Minister for Finance with a welcome opportunity to dispel the myths and misrepresentations, which have surrounded one aspect of the implementation of the pay reductions for public servants provided for under the Financial Emergency Measures in the Public Interest (No. 2) Act 2009, Committee Stage of which I took in December.
An immediate reduction of the public service pay bill was necessary to meet the expenditure reductions required under the EU agreed programme for the stabilisation and recovery of the public finances. There was general agreement in this House on the level of expenditure reductions required in 2010 and an acceptance by the public service unions in discussions with the Government that a reduction in the pay bill for 2010 was necessary. The Opposition has the luxury of agreeing on a macro level what is required to address the immense challenges we face in the public finances, while proceeding to oppose nearly all the microeconomic measures decided upon to achieve the required expenditure reductions. The Government, on the other hand, must make the necessary decisions and implement them no matter how unpopular they may be and regardless of the level of plausible misrepresentation, which is very high over the present issue.
Pay cuts are always unwelcome and put extra pressure on those affected by them. Two thirds of public servants earn €50,000 or less, but given the scale of reduction required in the pay bill, €1 billion, it was not possible to exempt lower paid public servants from the pay reductions. However, the average value of incremental increases at lower grade levels in the Civil Service range from 3% to in excess of 4.5%. These incremental increases were retained, despite Fine Gael proposals that they should be abolished, and remain in place, albeit at the reduced rates.
The recommendations made by the Review Body on Higher Remuneration are not binding or mandatory on Government. Looking back on report No. 38 in September 2000 at the very height of the boom, the size of the increases recommended was very large and, in my opinion but admittedly with the benefit of hindsight, too large.
That is very helpful.
As someone who entered the public service in 1974 and who worked alongside civil servants up until 2002, I have strong reservations about the whole concept and applicability of performance related pay as applied to the senior Civil Service to date and the concept of tracking the private sector. It proved difficult to distinguish exceptional performance and the 10% became embedded in pay. The Minster has abolished the performance related pay scheme as unaffordable at present, but it never worked originally as intended. However, in my experience, for the record, assistant secretaries and deputy secretaries, without prejudice to those who work above or below them, are at the cutting edge of policy execution.
A passage that appears to have been overlooked in the most recent report No. 44 states:
We recommend that, in the event that any anomalies arise in the implementation of these recommendations, the Department of Finance should have the discretion, in consultation with other relevant departments and agencies, as necessary, to make such adjustments to our recommendations as may be required to remove any such anomalies.
The legislation in December gave the Minister such powers. He is, therefore, acting in line with the report, not ignoring it, as has so often been alleged. The table circulated by the Minister for Finance yesterday demonstrated clearly the major impact on net pay of budgetary decisions since 2008. With the exception of a few Secretaries General, net pay for all senior civil servants has fallen well below €100,000, with losses of 24% to 27% in the categories in question. The system as it stands, even with the correction of the anomalies, is sharply progressive and there is no justification for claiming they have been spared far more than junior civil servants.
The Government recognises that the pay cuts applied to all public servants are onerous and difficult. They were not undertaken lightly but they are absolutely necessary. I would suggest that they must be considered in the context of the magnitude of the adjustment and contribution required from all those in our society, including social welfare recipients; the fact that the reduction of 5% in the consumer price index over the 12 months to December 2009 offers at least some mitigating effects; the devastating effect of the recession on jobs and incomes in large swathes of the private sector; and the current serious threat to European economies that do not demonstrate their determination to put their houses in order.
I wish to share my time with Deputy Bruton. I was delighted to see the Minister of State, Deputy Mansergh, put on the record that in hindsight many of the decisions taken in the past ten years by the Government may well have been wrong. It is a bit late for that. He is coming very late to it, especially since considerable pay increases have been awarded to people over a very short period.
I refer specifically to the most recent increases outlined in the report of the review body on higher remuneration in the public service of October 2007, covering 1,600 top civil servants and the extraordinary increases proposed in it. The increase at the assistant secretary level was approximately 5.5%, and that at Secretary General level was approximately 11.3%. The proposed increases for the chief executive officers of IDA Ireland, Enterprise Ireland, Forfás and FÁS were in the order of 22.5%. Compare that with what principal teachers obtained. Principals got nothing out of that, yet their proposed increase in terms of the allowances and changes in the last benchmarking award has not come into effect. The awards to principals, the senior managers within our education system, were never paid. Therefore, under the last review, an assistant secretary got a 5% increase; a principal got nothing. When one considers that in the most recent budget the pay reductions of principals was in the order of 8% and those at assistant secretary level within the Civil Service saw the now proposed 3% reduction, one cannot compare them only in respect of the last budget. One must compare them in a context of extraordinary pay increases over recent years.
The Minister is also wrong when he and his colleague told the House in a debate in which I participated that only those public servants who were paying the pension levy would be affected by the pay cut of December last. What we were told was totally untrue. It emerged in the Committee Stage debate, as the Minister of State, Deputy Mansergh, well knows, that those substitute teachers and temporary workers within the public sector saw a percentage pay reduction across the board.
Therefore, there is no fairness in the way in which the Government has dealt with the issue. Many lower paid civil servants and public servants are now having to be bailed out by family income supplement because they have seen a reduction in their take home pay, a reduction as a result of the pension levy and the income levy.
It is grotesque and unacceptable that the Government has introduced this sweetheart deal for more than 600 top civil servants. It sends out a negative message to other public servants, especially those on lower grades who are struggling to make ends meet.
I put it to the Minister of State that the Government's policy is all over the place. It shunts from one day to the next. There is no clarity in the way in which the Government has gone about this. It is grossly unfair to give a sweetheart deal to one group of civil servants and public servants over another in a circumstance where those people have seen significant increases in their pay over recent years. Deputy Bruton put on the record of the House last night that over the past six years those civil servants have seen an increase in the order of 70% to 80% in their gross pay and will obtain that very handsome pension at the time of retirement. This has not been fair. It has been a bad day for the public service and it has been a bad day for the Government which has botched this scheme right the way back to the budget.
I am glad to have the opportunity to conclude this debate. I would have to start by congratulating the Minister of State at the Department for Finance, Deputy Mansergh, for his powers of persuasion in persuading his colleague, Deputy Mattie McGrath, a Fianna Fáil TD who many would admire for speaking it as it is. Even today, Deputy McGrath recognised the gross injustice of what we are considering here, but he was prevailed upon by the golden words of the Minister of State, Deputy Mansergh, to which we are often treated. Pearls of wisdom that flowed from the Minister of State persuaded Deputy McGrath that he would have to leave his sense of fairness at the door and instead seek to use his influence within the party. It is a sad day when Deputy McGrath felt obliged to do that because he is allowing the Government get away with something that is grossly unfair. That is the position here and what we are voting on.
The Minister of State, Deputy Mansergh, was most economical in quoting from the high level review group. He found one quote which referred to the possibility of some anomalies. He has blown the possibility of some anomalies into a Government decision that is horrendously unfair. Let us be blunt. When the high level group made its recommendation that deputy secretaries should take a 12% cut and assistant secretaries should take an 8% cut, it did so fully in the knowledge that the pension levy had been imposed on these groups in the structure about which we all know, fully in the knowledge that the bonus system had been suspended and was now no longer applicable to these groups and fully in the knowledge of the progressive nature of the tax code the Minister had introduced in his previous budget which, naturally enough, asked everyone in every sector to pay more if they earned more.
Is it not remarkable that not one speaker on the Government side referred to the fact that the high level group, when it made this recommendation which was adopted by Government in the budget, knew all these things? Notwithstanding the existence of the pension levy, the suspension of the bonus scheme and the progressive nature of our tax code, it still recommended that these highly paid public servants should, in equity, take a pay cut greater than those on lower levels of pay. That was its recommendation which was very fair in any man's language. The only people who do not see that as fair are the members of the Government and, no doubt, some of those affected by these cuts who are now delighting in the fact that bonuses, which were never part of their core pay, are being given as a free pass to them to avoid taking the cuts everyone else has taken. It is an issue of fairness.
When the Minister goes back to his Department, he will see the clerical officer and the porter at the door working away. They are being asked to take much bigger pay cuts proportionately than the bosses in their comfortable offices who have had high pay, huge bonuses and so on over the years. Where is the equity in that?
Let us not forget the powers the Minister is using to make this decision. They are very clear. There must be a substantial inequity and it must be just and equitable in all the circumstances to use this power to reverse a pay cut imposed by the high level group. There is no substantial inequity. If the Fianna Fáil backbenchers were willing to come into the House, they would know that everyone agrees the substantial inequity in these pay cuts is that the person on the lowest pay has been asked to pay — the person on the minimum wage, the person struggling to get by, the person trying to pay a mortgage and the person trying to cope with children in the wake of cuts to child benefit. These people ought to have been spared. If there was a grain of money available to show some equity and fairness, would they not be the people to whom one would turn and say why should the porter pay so much and a person on the minimum wage take a 5% cut and let us use a little bit of discretion to exempt some of these hard put upon people?
That was not the way the Minister or any of his colleagues in Government saw it. They saw the assistant secretaries, the deputy secretaries and the 655 hangers-on to the same grades as the people suffering inequity. I do not agree with the Minister nor do many of the Government backbenchers.
This has nothing to do with tackling the nation's finances. It is enough to make a crocodile cry to hear Ministers lecture the Opposition about the need to face up to these difficult times. What are we being asked to do to face up to these difficult times? We are being asked to exempt the best paid public servants from taking their share of the cut. It is astonishing and unfair and most people will not forgive the Government for what it is trying to do here. I am not surprised people at the bottom level of the public service are angry and frustrated and are doing things which, in my view, are futile. They are angry and frustrated and they look up to the top of the tree and see these people taking advantage of a situation.
I was amazed by the table the Minister produced last night as if it were some great evidence and that we should melt away and say assistant secretaries are experiencing hardship. The Minister said the pension levy, the higher health levy and the higher Lenihan levy should be all taken into consideration in regard to the higher paid. What about the lower paid and people in every sector who have been paying all those progressive taxes? That is the nature of a fair tax system and it cannot be used to defend exempting those at the top of the tree from paying their share when it comes to cutting pay. It is offensive to see the resources of the Department of Finance being used to try to dupe us. No doubt one of these people on these high bonuses came up with this extraordinary matrix to try to justify what is unjustifiable.
Let us look at this honestly and fairly for a change. The net effect of the Government's decision is that assistant secretaries will take a 3% pay cut whereas the person on the lowest pay, the porter and the cleaner, will take a 5% pay cut. That will be further modified by the fact that in terms of disposable income, it will be less for the higher paid person. That is the effect of this. If one includes the pension levy, the effect is that these assistant secretaries will have taken an 11% cut over the two budgets while the clerical officer, who the Minister tried to pretend was walking away scot-free, will have taken a 10.5% cut. The person at the bottom of the administrative structure will take the same pay cut as the person at the very top as a result of the Minister's decision.
Let us look back at the history of this. The Taoiseach had the audacity to come into the House and pretend these high paid public servants suffered awfully over the intervening years and had been pressed down because they had access to the bonus. The truth is completely the contrary. Those assistant secretaries and deputy secretaries enjoyed a 78% increase since 2000 while the clerical officer at the bottom of the scale enjoyed a 48% increase, and the porter got even less. These assistant secretaries and deputy secretaries were privileged people not only enjoying their bonuses but enjoying bigger pay increases than anyone else. A pay increase of €64,500 was given to an assistant secretary while a clerical officer got only €10,000 — a six and a half times bigger increase in absolute terms for the people at the top of the tree.
The Minister had the opportunity to find the people who were suffering extreme hardship and substantial inequity, but to whom did he go? He went to the people who got the €64,5000 increase in the past eight years. It makes no sense and is an offence to fairness. That is why the Government backbenchers have put the Minister in the dock. He will survive this one but the sense of unfairness in what he is doing will resonate right through the system. It undermines the capacity of this Government to deliver the sort of reforms and the changes in work practice we need to see.
Let us be very clear. We are in a time of great difficulty and our public service will have to accept huge changes in the way we work, and we should accept that here as well. That is the reality of the world in which we live. One does not start a process of asking people to make changes to the way they do their work by singling out for exemption those people who are supposed to be the leaders of change. How can one justify that? Those people should lead by example and show that this is the time for change, for sacrifice and for doing things in a way they were never done before.
Instead, the Government used this Buggins's turn bonus system, where everyone got a slice of the action regardless of how bad was his or her performance, which time and again we were told should not be administered in that way. The high level group insisted time after time that this could not be regarded as part of core pay or something on which one should count and that one should get it only for exceptional performance above and beyond the norm. The Government, however, turned all that on its head.
We are at a time of economic peril. That is about the only thing on which I agree with Government speakers. However, the way in which we confront this must be seen to be fair and purposeful. The ordinary five-eighth should not be asked to make a sacrifice — they will be asked to make more sacrifices in the years ahead — by saying that our view of what is substantially inequitable about the recent pay cuts is that the people at the top of the tree have suffered a pay cut by losing their bonuses. Bonuses are gone in the private sector and no one is getting compensation for that. That is life. Bonuses were paid when the economy was successful. That time has passed. Similarly with senior public servants, the era of bonuses has passed. The Government's attempt to relieve them now and give them substantially greater pensions in the future as a result of this approach to bonuses is morally wrong, unfair to the people at the low end of the scale and will undermine the capacity of the Government to address the really difficult problems which lie ahead.
Amendment put.
The Dáil divided: Tá, 80; Níl, 73.
Tá
- Ahern, Dermot.
- Ahern, Michael.
- Ahern, Noel.
- Andrews, Barry.
- Andrews, Chris.
- Ardagh, Seán.
- Aylward, Bobby.
- Blaney, Niall.
- Brady, Áine.
- Brady, Cyprian.
- Brady, Johnny.
- Browne, John.
- Byrne, Thomas.
- Calleary, Dara.
- Carey, Pat.
- Collins, Niall.
- Conlon, Margaret.
- Connick, Seán.
- Coughlan, Mary.
- Cregan, John.
- Cuffe, Ciarán.
- Curran, John.
- Dempsey, Noel.
- Devins, Jimmy.
- Dooley, Timmy.
- Fahey, Frank.
- Finneran, Michael.
- Fitzpatrick, Michael.
- Fleming, Seán.
- Flynn, Beverley.
- Gogarty, Paul.
- Gormley, John.
- Grealish, Noel.
- Hanafin, Mary.
- Harney, Mary.
- Haughey, Seán.
- Healy-Rae, Jackie.
- Hoctor, Máire.
- Kelly, Peter.
- Kenneally, Brendan.
- Kennedy, Michael.
- Killeen, Tony.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Lenihan, Conor.
- Lowry, Michael.
- McDaid, James.
- McEllistrim, Thomas.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John.
- Mansergh, Martin.
- Moloney, John.
- Moynihan, Michael.
- Mulcahy, Michael.
- Nolan, M. J.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- O’Brien, Darragh.
- O’Connor, Charlie.
- O’Dea, Willie.
- O’Donoghue, John.
- O’Flynn, Noel.
- O’Hanlon, Rory.
- O’Keeffe, Batt.
- O’Keeffe, Edward.
- O’Rourke, Mary.
- O’Sullivan, Christy.
- Power, Peter.
- Power, Seán.
- Roche, Dick.
- Ryan, Eamon.
- Sargent, Trevor.
- Scanlon, Eamon.
- Smith, Brendan.
- Treacy, Noel.
- Wallace, Mary.
- White, Mary Alexandra.
- Woods, Michael.
Níl
- Allen, Bernard.
- Bannon, James.
- Barrett, Seán.
- Behan, Joe.
- Breen, Pat.
- Broughan, Thomas P.
- Bruton, Richard.
- Burke, Ulick.
- Burton, Joan.
- Byrne, Catherine.
- Carey, Joe.
- Clune, Deirdre.
- Connaughton, Paul.
- Coonan, Noel J.
- Costello, Joe.
- Coveney, Simon.
- Crawford, Seymour.
- Creighton, Lucinda.
- D’Arcy, Michael.
- Deasy, John.
- Deenihan, Jimmy.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Enright, Olwyn.
- Feighan, Frank.
- Flanagan, Charles.
- Flanagan, Terence.
- Gilmore, Eamon.
- Hayes, Brian.
- Hayes, Tom.
- Higgins, Michael D.
- Hogan, Phil.
- Howlin, Brendan.
- Kehoe, Paul.
- Kenny, Enda.
- Lynch, Ciarán.
- Lynch, Kathleen.
- McCormack, Pádraic.
- McEntee, Shane.
- McGinley, Dinny.
- McGrath, Finian.
- McHugh, Joe.
- McManus, Liz.
- Mitchell, Olivia.
- Morgan, Arthur.
- Naughten, Denis.
- Neville, Dan.
- Noonan, Michael.
- Ó Caoláin, Caoimhghín.
- Ó Snodaigh, Aengus.
- O’Donnell, Kieran.
- O’Dowd, Fergus.
- O’Keeffe, Jim.
- O’Mahony, John.
- O’Shea, Brian.
- O’Sullivan, Jan.
- O’Sullivan, Maureen.
- Penrose, Willie.
- Perry, John.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Ring, Michael.
- Shatter, Alan.
- Sheahan, Tom.
- Sherlock, Seán.
- Shortall, Róisín.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Tuffy, Joanna.
- Upton, Mary.
- Varadkar, Leo.
Tellers: Tá, Deputies Pat Carey and John Cregan; Níl, Deputies Paul Kehoe and Emmet Stagg.
Amendment declared carried.
Motion, as amended, agreed to.