I welcome the Minister for Public Expenditure and Reform, Deputy Brendan Howlin.
Financial Emergency Measures in the Public Interest Bill 2015: Committee and Remaining Stages
Amendment No. 1 has been ruled out of order because it involves a potential charge on the Exchequer.
In contemplating reform of the Seanad the provision which prevents the Seanad from creating a charge on the Exchequer should be removed. The Dáil could not possibly have made a bigger balls of the economy than it did under a previous Administration. Seanad Éireann, with its expertise, should be allowed to make suggestions in this area.
The amendment has been ruled out of order. I will allow Senator Rónán Mullen to speak to the section, if he wishes, unless he has another point to make.
We find ourselves in a situation where a series of excellent amendments tabled by Senator Gerard P. Craughwell which I had intended to support have been ruled out of order. We do not have a chance to discuss them because of the overly broad interpretation of the rule that amendments which involve a potential cost on the Exchequer cannot be considered by the Seanad. I know that the Seanad has a different role from that of the Dáil, but in at least one case the amendment tabled by the Senator, who will speak more eloquently to this matter, could not be interpreted as necessarily involving a potential cost on the Exchequer because it would remain for the Executive to make a decision on whether it should take a particular step that might or might not involve a cost. As elected representatives, we find ourselves unable to carry out one of our functions to help a proper consideration of legislation.
There are issues of fairness in regard to people's pensions, people in different unions being pitted against each other and the Financial Emergency Measures in the Public Interest, FEMPI, legislation being used as a weapon. We are not in a position to contribute properly to the discussion of these issues because of a simple administrative ruling out of order of this amendment. Sleight of hand is what I would call it.
I cannot open up a discussion on this amendment. Members can speak to the section. The Cathaoirleach has made his decision. I am not trying to be dictatorial. My hands are tied as colleagues are well aware. The Cathaoirleach has made his decision that the amendment involves a potential charge on the Exchequer and on that basis it has been ruled out of order. I am moving on. Members can make their points when they speak to the section.
Before the Acting Chairman moves on, under the Bill there will be substantial gains for senior members of the Government, while some of those who are worst off in the country-----
The Senator can make that point when he speaks to the section. I must move on.
In fairness, the time when this could have been done was during the debate on the legislation in the Dáil, but similar amendments were ruled out of order.
The Cathaoirleach has made his ruling on this amendment. As I said, my hands are tied. The Senator can make his comments when he speaks to the section. I ask him to resume his seat.
I find this very disheartening.
Amendment No. 2 is in the names of Senator Kathryn Reilly, David Cullinane and Trevor Ó Clochartaigh. Amendments Nos. 2, 5, 6, 9 and 15 are related and may be discussed together, by agreement. Is that agreed? Agreed.
I move amendment No. 2:
In page 6, to delete lines 3 to 29.
I welcome the Minister back to the House. As he knows, these amendments were thoroughly thrashed out in the Dáil. I have resubmitted them as a matter of procedure and will outline the rationale for them. I am sure the Minister will respond with his own interpretation.
A stated objective of the winding back of the FEMPI legislation, as the Minister said, was, in the first instance, to give relief to public and civil servants on low and middle incomes. I acknowledged on Second Stage that those on lower and very low incomes in the civil and public service would receive some relief under this legislation. I also said any alleviation would be welcomed.
With respect to the amendments, the point was made to the Minister during the debate on the legislation in the Dáil - I make it again now - that in terms of equity and delivering maximum relief to those on middle, low and very low incomes in the civil and public service, efforts should have been totally focused on those in the lower income brackets, but we note in this legislation that the only incomes in respect of which complete income restoration is envisaged and set out stage by stage are those above €65,000 and €110,000. This series of amendments seeks to remedy this. Some of them seek to deal with the issues of salaries and pensions.
The Minister rejected similar amendments in the Dáil and I imagine he will reject these amendments also. The reason I have resubmitted them is to outline what could be interpreted as a more favourite position for those on higher incomes. The question that arises is how in the staged process of full restoration of pay and conditions and all other aspects the process is not similar for people on lower incomes? This measure purports to unwind the financial emergency measures in the public interest legislation, but this should be done in a way that is fair and equitable to all.
Amendment No. 6 sets out that nothing in this section will provide for an increase in the salaries of Members of the Houses of the Oireachtas or Ministers of the Government. In the debate on the legislation in the Dáil the Minister stated current Ministers would voluntarily forgo any portion of income returned to them. However, it should be noted again that it is very much a voluntary action and not set out in legislation. We believe that is a mistake. For how long will that voluntary measure last? Can we rely on politicians' goodwill? Circumstances change and those who voluntarily forgo such income may decide they do not want to do so anymore. Given that Members of the Oireachtas, particularly members of the Government, brought forward previous FEMPI legislation which introduced broad menus of cuts, it is appropriate that Members of the Oireachtas should lead from the front in the recovery.
Amendment No. 9 is a similar amendment with respect to pensions. Amendment No. 15 is particularly controversial. I know that the Minister has mentioned the constitutionality issue, but this amendment focuses specifically on former Members or Ministers. There has, rightly, been much public concern about this issue, particularly the very high pensions of which former Ministers and politicians are in receipt. It is not lost on many people that some of those in receipt of these pensions were at the helm of the economy and subsequently when the economic crash occurred. The Minister has mentioned that the constitutionality aspect could bring down the FEMPI legislation, but I have tabled this amendment not least to make the political point that there is considerable concern that while those on lower incomes will not have their incomes totally restored, the big players with big pensions will have their pensions increased.
I do not agree with these amendments. This is the typical public relations stunt to attack the salaries and pensions of Members of the Oireachtas. Whatever about the pensions of former Taoisigh, the pensions of former Members are not enormous by any means. Those who serve the country well deserve to be properly treated.
Senator Kathryn Reilly spoke about relying on the goodwill of Members. Of course, we can rely on their goodwill; politicians fall over themselves to sacrifice themselves and take pay cuts and all the rest. I was around when some of the allowances were created by the then Minister, Mr. Charlie McCreevy. It was sleight of hand because Members of the Oireachtas had decided not to accept the pay increases members of the general public were to receive. It was sleight of hand compensation for the trade unions. Civil servants had them streamed into their pay. Our pay was supposed to be linked with pay rates in the Civil Service, but that coupling was undone. I do not agree with this idea and do not think the public pays much attention to the self-sacrifice of politicians. I have said previously that if we were to strip ourselves naked, give all of our possessions to the Society of St. Vincent de Paul and jump off the roof of Leinster House, the general public would be quite unimpressed. I stand alone in public in saying I think we should receive proper remuneration for the job.
On an allied subject, the allowances paid, they are a mess. The interpretation of the regulations is chaotic. Why does the Government not just consider giving Members of the Oireachtas the proper rate for the job? It should have an outside person look at our work ratios and all the rest, pay the rate for the job and cut out all of the allowances. That would cut out the controversies and we would then receive the rate for the job. In the New Year I am seriously contemplating throwing the old allowances back in the face of the Government and saying: "Keep them, they are not worth a tuppenny damn." I do not agree that Members of the Oireachtas should be sacrificed. I do not see why we should be excised from a public movement of pay restoration. Why should we? Why should Members of Parliament be exceptional in being penalised when everybody else's income will be restored gradually by the Government? Ours should be too and I say this quite openly and publicly, although I know that it will not be popular, but I do not give a damn. It is what I believe. I do not accept the amendments.
This is a very sensitive subject for politicians on which even to engage in a debate, as the Minister will be aware. I admire Senator David Norris's forthrightness and political courage, not for the first time, on this issue, but one has to tread like one is walking on eggshells when one talks in the Houses of the Oireachtas about the specifics of the amendments which, in general, are about restricting increases for politicians. There is no question but that it is a populist measure. However, there are a number of contrary views. One is that the Government, in its attempt to abolish the Seanad, played on what the focus groups seemed to suggest would go down well with the general public, that not only would it get rid of a bunch of politicians but that it would save the State some money. Members may remember that they were the two main planks of the proposal-----
All of their figures were wrong.
-----yet the public did not bite. About three or four years ago The Irish Times carried out an attitudinal behavioural survey which was quite extensive, and I vividly remember one of the key questions.
All of the questions offered respondents a selection of answers labelled A, B or C. One of the questions was whether readers believed politicians' pay had increased, decreased or stayed the same since 2008 or 2009. Most respondents opted for choice A, that politicians' pay had risen. In other words, there was no recognition of all the efforts in this area by the former Minister for Finance. As Senator Norris noted on Second Stage, that Minister uniquely took away the increment from Deputies and Senators. We are the only group in the public service that does not have increments. Even in the private sector, the provision of incremental pay increases is a normal part of employment practice. It does not happen in all cases but it certainly is an accepted model. We were sacrificed on the basis of a populist decision of the day. Does anybody know or care about that? No, they do not.
The amount of money involved was piddling.
It was a small amount but, as Senator Norris pointed out, it affected pensions. I will always defend the right of people in these Houses to a pension. The question of how that pension is calculated should be a matter for outside agencies. It is important to remind people that the pay and conditions of politicians were not set by politicians. We need to go back to the infamous benchmarking exercise of 2002, which I consider to be the most anti-democratic action taken in the course of the 15 years or so in which my party was in government. It involved the Government of the day and the trade union movement cooking up this wonderful agreement to ensure politicians and public servants were looked after. Of course, as public servants ourselves, Oireachtas Members gained from that. However, I recall being very uncomfortable at the time about all the money that came pouring out of that agreement in 2002 and in subsequent years. It was morally wrong, as I said when it was done. I remember getting cheques and not having a clue what they were, the only reference being to "arrears". There was a lack of transparency because of the manner in which the deal was done, which was behind closed doors and without any involvement by either House.
Going back to the survey to which I referred, it really brought home to me the point Senator Norris made and on which I am in full agreement with him. Every politician in this and the other House would agree with him, privately if not publicly. The fact is that people in this country generally do not care to know that politicians have taken pay cuts or, if they do know, they very quickly forget it. The general view, irrespective of any reality, is that politicians are lining their own pockets. The reality, of course, is that the reductions Deputies and Senators have taken in the past five or six years amount to a cut of well in excess of 30% of their pay. I am not complaining about that but am simply pointing out that reality and public perception do not always align.
Another source of irritation to me is the lack of acknowledgment of the fact that over the past 30 or 40 years, the average turnover of Members of both Houses at each general election was 30%. As a result of the fluidity of the political situation in the past six years or so, that average might even be higher. The rate of turnover was certainly higher at the 2011 election and it could be high again at the next election. What happens to the people who leave their jobs to come into the Oireachtas, serve one term and then have to try to pick up the pieces of their career? It is not easy for them but there is no attention given to their situation by the media. Instead, the focus is on the amount of money Deputies and Senators receive in their salaries. Moreover, the impression is effectively conveyed that Oireachtas Members receive that money from the cradle to the grave. In reality, a significant cohort of people are elected to these Houses for one term only before having to relaunch their career on the outside. What is worse, some accrue so many expenses in the course of their election campaign, they are left paying off bills right through their term.
To be clear, what I am saying here does not amount to a plaintive cry. I am merely articulating certain realities that do not always seep into the public awareness. The only view presented to people is one that says Deputies and Senators are out to look after themselves. There is a human dimension behind the statistics I mentioned that is forgotten about. It is neither remarked on nor even conceded that there are people trying to keep body and soul together and who, once they leave the Oireachtas, find it very difficult to return to their previous line of work.
To reiterate, I am not against these amendments but am taking the opportunity to point out a few facts. As I said at the outset, I realise I will not gain any friends by saying what I have said. I probably will be accused of defending the indefensible. All I am trying to do is point out the political and human realities behind the facts and figures. Despite all the efforts by the last Government, the results of The Irish Times survey show people's views are not in line with the reality. I have no doubt that if a similar question were put to the public in respect of this Government, the majority would go for option A, that politicians have increased their pay.
The sentiments behind these amendments are understandable. It is important to iterate, however, that there is a very strong bias in this legislation towards the lower paid. Another important point is that public servants in general, at every level, took significant cuts as a result of the various FEMPI Bills. The point was made on Second Stage that although more is going back to the lower paid, everybody is getting something back. It is more a statement of gratitude and appreciation for the work all civil and public servants have done, and the Minister, rightly, has put the emphasis on the lower paid.
Oireachtas Members are public servants and our pay is linked to a pay grade within the public services. Deputies are linked to principal officers, Senators are linked to Deputies and councillors are linked to Senators. The independence of that link is valuable and it should be retained rather than going down the road of a commission that would evaluate the work of public servants. As Senator Mooney noted, there is a danger in asking for the work that is done by Oireachtas Members to be appropriately recognised. The best thing is to have a link with the public service generally. The work we do is a public service role and that is where it rightly belongs. As I said, the sentiment behind the amendments is understandable but it is also misplaced. We are public servants and we, like others, have given up of our salaries. We are not getting a lot back now but we are getting back what is appropriate to people of our pay grade. It is the same for all public servants.
I said on Second Stage that this Bill is biased to some degree in favour of people who are on very good salaries. My colleague, Senator Keane, noted on Second Stage that councillors get nothing out of it. Indeed, it is very hard to figure out what local government members actually earn. They are not employees but officers, a role for which they get a miserable €16,000 per year. For 33% of them, it is the only income they have, but they are being hit with the pension levy, universal social charge, tax and so on. In the case of the spouse of a public service pensioner, assuming the latter had full service, the spouse will receive a quarter of that person's income. Many are on less than €12,000 per year.
Senators gain nothing from this Bill but the Taoiseach is to gain €15,900. The Minister will undoubtedly tell us this increment will be waived. I probably know more about the effects of the financial emergency measures than most people, having taken all the cuts as a teacher and a further annual cut of €8,000 when I came in here, under the relevant statutory instrument. I sit in this House alongside people who can work in the private sector and earn up to €100,000 on top of their Senator's salary.
There is something very wrong with the way in which we balance things in this country.
The Minister tells me the senior Government people will waive this. Both he and I know that we are approaching an election and it is likely that some senior Government people will lose their seats. When they waive this, will it be underpinned by some form of statutory instrument so they cannot come back and say they have changed their minds, are no longer waiving it and would like to have it included their pensions? Is that the case? Is the waiver voluntary for as long as one wants it to be but not thereafter?
We sought some small changes to the Bill. One such change, as I pointed out, imposed no cost whatsoever but it was ruled out of order, which is totally unacceptable. I complimented the Minister the other day, and will do so again, on the Lansdowne Road agreement and on the Haddington Road agreement, in which I was involved. As far as I am concerned, and as distasteful and all as the agreements were for those at the receiving end, the agreements were without doubt the saving of this country at the time they were brought in. The Minister took a huge political risk when he brought them in and I commend him for doing so. I hold him in the highest esteem but we have got it slightly wrong in this case. I have found myself having to walk a thin tightrope because many of my trade union colleagues will benefit significantly from this, which is commendable. However, there are a few who are outside of the frame. None of them is looking for money but rather negotiation on things like flexible hours in universities. It was a bit disingenuous of the Minister the other day to discount the 78 hours given up by lecturers in institutes of technology as just 78 hours. We both know that those 78 hours have found their way into the de facto timetable which means people work far in excess of 78 hours. My colleague, Senator Healy Eames, has estimated that there is four hours per hour of delivery. The 78 hours have become delivery hours, so it is a substantial number of hours.
Colleagues in the Garda Síochána have taken great exception to the fact the Minister has discounted the 30 hours they gave through the Haddington Road agreement. It has been thrown away; it is at the bottom of the scale and it is not considered that important. I want some form of guarantee that senior Ministers, the Taoiseach and the Tánaiste will not benefit from this. We need to look at cases where people in this House have sizeable incomes outside it. Decent people gave their lives to this country and have taken massive cuts in their pensions and yet those who have lived a fairly comfortable life through the public service, including public representatives at the top of the public service scale, will benefit to the tune of more than the pension payable to the people at the bottom. That shows there is something terribly wrong with this.
I want to see the Lansdowne Road agreement agreed, over the line and working. The colleagues I left behind in the teaching profession do not want money. Instead, they want somebody to sit down and discuss their concerns, which is not a lot to ask. The Minister could say today that he will see to it that happens. I also want my colleagues who are not on a full salary to be looked after. The other day I gave the Minister the example of the teacher on €23,500 who will not benefit from this. If his or her next door neighbour who is a civil servant on €23,500, he or she will get all of the benefit because, unfortunately, the teacher, or casualised public servant, does not get any benefit from the pay rise per se because it is based on the salary for the scale and not the income of the individual, a matter which needs to be addressed. The Minister said he would address any anomalies if we specify them to him. I am having the costings done on those scenarios and I will send them to the Minister, who I believe will try to resolve them. I see a situation where we will probably finish up with 50 different points on every salary scale in the public service where casualised people are employed. I do not want to trip this up but I need some serious answers which will allow me to support the legislation in some way.
Has Senator Brennan indicated a wish to speak?
No, I am just a keen listener.
We had a fairly good and open debate here on Tuesday. I recognise the considerable skills of the Minister. He is forensic, very able and he has considerable negotiating skills. However, I am troubled that all of the amendments that had anything to do with a potential cost to the Exchequer have been ruled out of order. I know that the Minister did not make the ruling. By ruling them out of order, what we are saying is that there is no debate and we should throw them out. I do not know why I have bothered to stand up and speak.
I outlined at the very start that-----
I know it is not the fault of the Acting Chairman and that he is only sitting in for the Cathaoirleach.
The Cathaoirleach has made a decision on the amendments under the Standing Orders of the House. I am sorry to interrupt the Senator but I must remind her that the amendments were ruled out of order, as indicated, because there is a potential charge on the Exchequer.
Colleagues will have an opportunity to speak on the section, if they so wish, when we reach it.
I am speaking on the section.
We are now dealing with the amendments.
On that note, I will proceed. The Minister's answers to the questions will be important in terms of providing guidance for staff. I will focus largely on the teaching profession at second and third levels and on pensioners. I will make one point on councillors because other Senators have referred to them. What are councillors? They are not public servants and they do not in any way benefit from this Bill. They are not even classed as public servants. They have no PRSI entitlements and as a result have no pension entitlements. If one works out their actual pay then, in my view, it is way less than the minimum wage. They have got the rawest deal in the country and yet they are the underbody of the entire democratic system.
They are the underbody of the Senator's constituency.
Senator Healy Eames, without interruption.
One rarely hears me in here talking about this issue but I respect people who serve the public. I spent three years working as a councillor, so I know the workload. With respect, Senator Norris cannot say the same, although I know that he does a lot. The pay, conditions and entitlements of councillors are worthy of attention and I ask the Minister to tell me where that can happen. I have not seen anything in the legislation for councillors. Democracy relies on councillors. They glean an awful lot of information from the public, their opinions and feedback matter and all of that feeds into the entire democratic system.
I wish to make other points about the section, the first of which is on pensions. As it stands, a huge number of pensioners will not have full restoration of pension under the FEMPI Bill and some have estimated that up to half of retired pensioners will be affected. The Minister can clarify if the estimate is wrong because that is the whole purpose of a debate. If he could give a commitment that the pensions will be fully restored in time, that would be appreciated. Can he give a commitment that people's pension entitlements which they signed up for, paid into and are their right will be restored in time? I am not talking about high flyers or top public servants.
I am talking about pensioners who are on marginally above €35,000 a year. I have been speaking to some of them. They are still paying off mortgages, helping their young children by paying college fees and huge rents in Dublin. I had a call from one woman before I came into the Chamber. She had to take early retirement due to ill health. She told me her outgoings are significant and she has a poor quality of life due to the level of these outgoings. The Tánaiste and Minister for Social Protection, Deputy Joan Burton, said she felt everybody in this country should have a maximum pension of around €65,000. That was her benchmark. I see much merit in her proposal; that is a very decent pension.
Did the Senator say €65,000?
That is what Senators get as an annual salary.
I am not knocking that.
Senator Healy Eames should speak through the Chair.
I am talking about those who are on considerably less than that, almost €30,000 less than that. Given that the good Cathaoirleach - who is not in the House - has ruled amendments out of order which could have addressed this-----
They were ruled out of order because of Standing Orders.
I know. However, what is the point of having a debate when one cannot change legislation? The purpose of our being politicians is to be able to force change, win it or lose it. I am relying on the Minister to answer this question. Will he restore the pension rights to almost half of the people who will not benefit due to the FEMPI cuts?
That is not true in the first place.
I want the Minister to answer that question.
I also want to address a cost the Minister is going to impose on the Exchequer as a result of his not negotiating with lecturers, particularly with those in institutes of technology. Lecturers are doing 18 to 20 hours lecturing a week. Come next summer, when the Minister may not honour the moneys due to others, and then come next September, when those lecturers are likely to go back to the 16-hour or 18-hour week, will the Minister appoint extra staff? He will have to if he enforces this measure. If he enforces, they are likely to enforce back. Who will lose out? The State, the students and the quality of education will lose out. This is not right. We need to have a long-term view on this. If the Minister rejects them now, they are surely going to enforce and bring back their week's lectures to 16 hours and 18 hours, as opposed to the 18-hour and 20-hour weeks they do now. The Minister might claim that is to do with their vote.
This has nothing to do with the amendments.
They are, however, honouring the hours at the moment, which is significant.
My final question is on casual teacher staffing. Thousands of young teachers under 35 are on part-time hours. They have insecure employment, low hours or both. With respect, I spoke to the Minister’s official outside the Chamber and I have checked it again. There is disagreement over the Minister’s explanation, although I respectfully accept it.
I have learned the Lansdowne Road agreement pay increases of 2.5% and 1% are due in January. However, they are linked to the pay scale of a full-time teacher. The lowest point on the scale for a full-time teacher is €31,000. A person on 11 hours’ teaching, who is in insecure and part-time employment, earns €15,000 a year. According to the Teachers Union of Ireland, these teachers, who comprise half of all the under 35-year old teacher cohort, will not benefit from the Lansdowne Road agreement because its increases are linked to points on the salary scale. This needs to be clarified on the record of the House.
We have to plan ahead for teacher supply. That is the job of the Department.
How is this relevant to the amendments under discussion?
The casualisation of staffing arrangements in the teaching profession is leading to talent loss. If the teachers in question will not be linked into the Lansdowne Road agreement, they will move. Half of the current home economics graduates from St. Angela’s College, Sligo, have gone into the food industry because they will have more job security and better pay in it. This is a fact. Who loses out as a result? The young people of this country will lose out. Physics graduates are going into industry too. We need quality in our teaching profession because teachers are the drivers of the economy at a personal and national level. We have to keep up there to be benchmarked internationally or we will lose out completely.
There is a huge load on the Minister’s shoulders because it is not about today or the coming year but about the future of our country. I appreciate that, because the amendments have been ruled out of order by the Cathaoirleach under Standing Orders, we are now relying on the Minister’s answers to guide me and the profession.
A fair bit of latitude has been given to colleagues. Will Members stick to the relevant amendments, as the order of the House is that this Bill has to be completed by 2.30 p.m.?
I was a bit bewildered about the relevance of the previous contribution but I did not interrupt because it is always useful to let colleagues have their say.
There has been a rather mean-minded reference to the Taoiseach’s income. He is the Taoiseach of this country. The fellow from the IFA got €500,000 plus, while the Taoiseach took a pay cut of 30%.
It was 40%.
Was it 40%? That is a hell of a cut. Let us have a bit of respect. We have a Taoiseach making decisions about billions of euro and the future of the country, as the previous Senator referred to, yet we are cheeseparing. Come on. Let us have a bit of respect for the profession of politics. Let us pay people a decent and reasonable wage. If the Taoiseach was earning €200,000, a 40% cut would mean it was €80,000. I welcome openly and publicly the fact that he will be getting €15,000 back. I do not like this kind of begrudgery and cheapness. It is wrong and reprehensible. It is a stunt.
A begrudging reference was also made to Members with other incomes from outside the House. I am one of them. I taught for 30 years in Trinity College Dublin. I was bloody good, bringing in people from all over the world to the university. I get a small pension from Trinity but I am damned if I am going to sacrifice it. I worked hard for it. I earned it and deserve it. I am taking it and I am not giving a solitary cent of it back. I would advise Ministers in the other House to grab it while it is going. Take it. They work hard and unsociable hours. They get dogs abuse from the public. They get hemmed in in their motor cars when they go to give educational awards. Money would not compensate for the lives that some politicians have to lead. They are entitled to it.
I make no apology for saying that. The Taoiseach took a huge cut, equating to 40%, but we heard nothing about this. It is never advertised around the place that he took a 40% pay cut, but when he gets back €15,000, everyone screams about it. That is rubbish.
As we are discussing remuneration and public service pay in general, I wish to refer to the situation of local councillors. I was a councillor for 25 years before I came into this House and for the first 15 or 16 years we received no remuneration whatsoever. We were serving the people and wanted to do so. It was a joy and a thrill to be elected and we all got great satisfaction from doing the job. I have to admit that I was one of the councillors who approached the then Minister for Finance on behalf of councillors to advocate quite strongly that they should be paid for their work. I met the Minister with a fellow councillor and my local Deputy. The Minister recognised the work that councillors were doing. I am not sure whether it was him or his successor who introduced in 2001 or 2002 a salary of approximately €10,000 per annum, but for the first 15 or 16 years that I served as a councillor I received no remuneration.
Councillors are not classed as public servants in the context of this Bill, but they are public servants who serve the public, often from their own homes, on a five-day week basis. While they are paying PRSI contributions, they are not entitled to claim anything on foot of them. I ask the Minister to clarify whether they are totally excluded from the provisions of the Bill. Will they be entitled to increases in remuneration? As other Senators have said, councillors are working for far less than the minimum wage. Like others, they should benefit from the provisions of the Bill.
One of the very first acts of the Government on entering office in March 2011 was to cut the pay of all Ministers. In July 2013 the Taoiseach's pay was cut. Many people do not realise that the Taoiseach was the first in the history of the State to cut his own pay - by a cumulative figure of 40%. Former Taoisigh Bertie Ahern and Brian Cowen each had their pensions cut by €30,000. In the past, once a Deputy retired from the House, he or she could collect a pension but now Deputies must wait until they reach retirement age to do so. The Government has implemented a lot of cuts and brought about considerable change which should be enunciated and acknowledged. The cuts were progressive, with those earning less than €65,000 protected. The pay of Senators was reduced by only a small amount.
Many colleagues have spoken about councillors, but they were not affected by the cuts because they were not earning more than €65,000 per year. They would love to be earning even €30,000, but they are actually in receipt of €16,000 per annum. Their wages were cut in accordance with the terms of the local government reorganisation. They now travel more, but they are paid less. When I was a councillor back in 1991, I was able to fulfil my role while holding down a full-time job. However, when I was elected mayor, I had to give up my job. I probably could have continued to do both, but I could not have done either of them right. As a Senator, one must be here and if one cannot, one must make sure someone will stand in. There are both full-time and part-time Senators in this House, but I contend one cannot be in two places at once.
On the issue of the restoration of pay for public servants, legal issues may arise with the differentiation between elected and non-elected public servants. Under the Regulation of Lobbying Act, county councillors are defined as public office holders and designated as having to report on A, B and C. For the first time ever-----
They do not have to report anything. It is the lobbyist who must report.
Yes, but the Act designates county councillors as officers rather than as public servants.
Senator Terry Brennan spoke about being a councillor and not receiving any remuneration, but there is no comparison between the workload in the 1990s and today. It is a full-time job and many councillors cannot take up other full-time employment. They have to accept part-time employment if they want to serve those who elected them well. One could take on a full-time job if one simply signed in as a councillor and did not take the role seriously. That is possible, but most councillors are totally committed to performing their role.
As I said, I would have no problem with delaying the restoration of pay and pensions for politicians and Ministers. However, I ask that the Minister facilitate teachers, although I must declare a conflict of interest because my husband is a teacher. It is important that I declare such a conflict of interest as it could be argued I stand to benefit from the legislation we are discussing.
This is a difficult set of amendments to which to respond because not only were many of the contributions not germane to the amendments, they were not even germane to the Bill. Senators spoke with passion, but some of the issues raised were well outside the remit of my Ministry. However, I will do my best to address them.
I will begin in a pedestrian manner by speaking to the amendments. All of the amendments boil down to one issue, namely, that nobody in receipt of a salary above €65,000 should receive one cent by way of pay restoration. That is what the amendments are about. The first amendment in the group provides for this, while the remainder are not necessary because there is no point in saying nobody earning more than €100,000 should have his or her pay restored because we have already said nobody earning more than €65,000 should enjoy pay restoration. Equally, there is no point in saying Ministers should not benefit from pay restoration for the same reason. I do not agree with this.
We have structured the reductions in a very progressive way. The only reductions in pay the Government of which I am a member introduced for the public service - there were two reductions before our time in office under previous FEMPI legislation - were for those earning more than €65,000. As part of the negotiated settlement, namely, the Haddington Road agreement, with which Senator Gerard P. Craughwell, in particular, will be familiar, the pay-back period was an intrinsic part of the settlement presented by the Labour Relations Commission and endorsed by the Irish Congress of Trade Unions and the Government. I am not going to come before the House and accept a recommendation to break the terms of that agreement because that would completely undermine the basis for engagement with any union in the future. I do not recall any political party asking for such a straightforward reneging on a solemn agreement.
Members might also recall that even the reductions in salaries above €65,000 were carried out on a progressive basis, ranging from 5.5% to 10%. The higher the pay, the greater was the impact. The Lansdowne Road agreement was the restoration element of it. That agreement is exclusively about restoration to the lower paid. Obviously, everybody gets something, but it is focused on the lower paid. On a percentage basis it hugely advantages the lower paid, as I promised it would do. That point is acknowledged by Senator Craughwell. However, I cannot ignore a pre-existing agreement, the Haddington Road agreement, which is what Senator Reilly is taking into account.
I will move to the more contentious issue of whether politicians should be excluded. There is a school of thought that if we all had sackcloth and ashes and went out on the plinth to flagellate ourselves, it would not be enough. I respect the business of politics, and I am sorry Senator Norris is not here at present. I am also in the business of hoping people will get involved in politics and get a decent living from it in a fair way, so they can afford to pay their way and maintain their families. I am a member of the Labour Party and I am mindful of the fact that one of the first measures sought by the Labour Party in Britain, when it was first elected to parliament early in the 20th century, was to have salaries for Members of Parliament, so it would not be an exclusive club for the landed gentry or the barristers, with all due respect to the barristers present, who could breeze in after hours. When I was first elected to the Oireachtas, the sitting hours were often designed to suit some of the professions, so its members could come to the Houses after hours.
That is not how a modern parliament works. Modern parliaments work on the basis of having decent remuneration appropriate to the skills set demanded for the job. Certainly, I would be interested to see the salary scales of the people I have been negotiating with in the trade union movement for the last time. There were many blanks in the newspapers yesterday, but perhaps we will find out what everybody is paid in the future. Transparency should be part of all of this.
Some people perceive that there is a political advantage in making that argument. It is not one that I make. It is actually protected by a more fundamental argument. Reducing people's pay or pension is an extraordinarily exceptional measure. As I have said repeatedly, it can only be justified by a set of circumstances, one of which is the existence of a financial emergency. That is the reason all of the legislation that does these things is called financial emergency legislation. Please God, and I am confident the day is not far away, there will be no justification for an emergency. This legislation will end entirely, and there will be full pay restoration for everybody when that day arrives. This matter has been repeatedly-----
Will that include the increment?
No, not what was forgone. However, from the date of the ending of the emergency and the certification of that, there will be full restoration. I was mindful of that when early this year I set about negotiating an orderly unwinding rather than a sudden unwinding, which would be catastrophic for the State. The cost of losing the measures that are implicit in the FEMPI suite of legislation is €2.2 billion per annum. If I was asked to pony up that amount of money to restore pay for pensioners and public servants right now, I would have to find it by cutting services. That is not a way I could possibly go. It was on the basis of having that dialogue in negotiation with the trade union movement, which fully accepted and understood this, that we have reached a situation where we have a negotiated agreement.
Not only must the financial emergency continue to exist for this legislation to be valid, I am legally advised that there are also other criteria. One is that it must have general application. In other words, it cannot be arbitrary. I cannot decide that I do not like a certain category of public servants, so they will be excluded from any pay restoration or will have particular cuts. That is what the Senator is doing. Legally, that would not last jig-time in the courts. Imagine saying to the judge that the Minister has taken it upon himself to be selective about individuals in respect of pay restoration or, in the first instance, pay cuts. It must have general application across a negotiated agreement. That is the reason we couched it in a formal negotiated agreement, agreed by the Irish Congress of Trade Unions.
There are a number of other issues, some of which have nothing to do with the Bill, but I will do my best to respond. One of them is pension restoration. We intend to deal with pension restoration separately. We are dealing with pay restoration in this suite of measures. Under this Bill when it becomes operable, and we have tabled an earlier signature motion so it can have effect from 1 January next, there will be three restoration payments in terms of pensions alone - one on 1 January 2016, one on 1 January 2017 and one on 1 January 2018. It is a 24-month period. At the end of that period everybody who has a pension of up to €34,152 will have full restoration. That is 80% of all public sector pensioners. Everybody will have some restoration. To deal with the specific point made by Senator Healy Eames, if somebody is on €35,000 or €36,000 they will get their €34,152 as the impact is the same as on everybody else. It might be more helpful if I give the figures. Up to the level of €34,152 there is no further pension reduction.
On €35,000, one currently has a deduction of €2,280. At the end of this period, it will be a deduction of €600. I can go through the entire scale but at the other end of it, for example, €165,000, which is an extraordinary pension, one will still be paying €30,280 in a pension deduction at that stage.
Can the Minister say what the effect is for a person on €40,000?
On €40,000, one is currently paying €2,280 and that will fall to €1,200. On €60,000, one is currently paying €5,280 and that will fall to €3,600. It ratchets up the further one goes up the scale. I can provide the full table to the Members.
I appreciate what the Minister is doing in this. All pensions will be restored for 80% of pensioners. I do not wish to tie the Minister into anything in this regard but can he give a rough time-line for the final 20%?
I do not have a time-line for that. What we have done is focus on what could be afforded in the time-line that I have. I do not wish to stray into even more dangerous territory but the expenditure that we have signed up for already for next year has generated some controversy, with people saying we are profligate in our spending. As it happens, I was the guest at a dinner last night of the Retired Civil and Public Servants Association, which represents everybody. There were teachers, prison officers, civil servants and a variety of people at my table and I spoke to everybody there. They fully appreciate what is being done. They understand that as the horizon improves, there will be an imperative on whoever holds my office to unwind this at the quickest pace the economy will allow. Ultimately, as the emergency abates the legal robustness of the legislation will become more fragile.
What if there is a continued improvement between 2016 and 2018?
I will not make any commitments-----
I understand what the Minister is saying.
That will be a matter for whoever follows me in this office.
A number of Senators raised the issue of councillors. I am well beyond my competences here but councillors, like everybody else, will benefit from the PRD abatement.
Is that from the first day?
It is because we are moving the threshold.
The threshold is going up from €15,000 to €17,500 so under this arrangement no income below €17,500 would be subject to the pension-related deduction, PRD. Since the basic rate for councillors is currently €16,250 councillors are below the €17,500 threshold and no PRD would be taken from their base allowance. Some councillors would have allowances for mayoral positions or for strategic policy committee chair positions, but I am talking about the core salary. However, all income will benefit from the new thresholds from PRD.
The councillors do not pay into a pension scheme so how can a pension deduction be reduced?
The Senator is opening a very large debate there, and I understand there is an informality here, but this is not a payment into a pension, it is a pension-related deduction. Under the Act any public servant, including those who are not paying into a pension scheme, are captured by it. It has been tested repeatedly in the courts and I have very little flexibility in this without threatening the basis of the FEMPI itself. It is a complicated and long debate which I am happy to have on another occasion.
I will now turn to Senator Healy Eames's contribution on teachers. I have said previously that this is completely outside my level of responsibility. There is, however, a real issue to be tackled in the casualisation of the teaching profession at secondary school level. It suits some schools to have people in for a small number of hours and to have them captured in that cycle. I have tried to address this and I have discussed it with my colleague, the Minister for Education and Skills, Deputy Jan O'Sullivan. I have tried to address this concern in other areas also by pushing strongly to replace agency nurses with full-time nurses, and that is what we have been running to do. Even in the Civil Service people are hired on short-term contracts. It is much better if there are full-time contracts for people and that is what I want to do. In the interim, casual, part-time teachers working fewer than 150 hours per school year are on an hourly rate of €38.78. That is a decent hourly rate.
That includes holiday pay.
That is the hourly rate. The problem is not the rate. The problem is the lack of hours, which needs to be addressed.
Exactly, and those hours are spread thinly over a number of days.
With regard to this legislation, and from my perspective, that is not something we can compensate for by boosting the hourly rate. To do that would dislodge the symmetry between people working full time and people working a number of hours, but I hear the point the Senator makes.
With respect to the Minister it is not the ones under-----
I do not want toing and froing. That is not the way debate operates in the House. I would prefer to allow the Minister to respond.
With respect if I am completely out of order, but none of this has anything to do with the amendments we are debating. On the basis of the fact that such latitude was given to people to make the case-----
That is why I do not wish to extend the discussion because there are relevant and pertinent issues to be raised.
Yes. However, with regard to the issues themselves and how they are dealt with, what is being asked in essence is that nobody above €65,000 should get a cent back, despite the solemn agreement negotiated with the trade union movement. I do not think the consequences of that have been thought through. For example, principals and deputy principals in secondary schools and some primary schools, senior nurse managers and people who work at superintendent level and above would be affected. It would flatten the differentials. Why would anyone want to be a nurse manager if the pay was static? Why would they take on the job? Why would anyone become a school principal if there was a ceiling on the income?
The amendment is designed ostensibly to pretend that high pay is to be cut, but in fact it is to malogen down all pay in the public service. Most of us would regard high pay as over €100,000, with judges and academics getting sums above that. However, more than half of the people in the entire public health service are consultants in our hospitals. We are struggling to get consultants into many of our rural hospitals, but if pay begins to be cut it will ensure there is no public health system. There would only be a private health system.
The Minister would need to tell Sinn Féin.
That would be a disastrous path to follow. It might sound populist but if it collapsed the possibility of staffing our public hospitals, that would be ruinous. That is why I oppose these amendments.
I thank the Minister for his response. I thought I had opened a can of worms with the debate around my contribution. I wish to set out very clearly that we are not against anyone who earns more than €65,000 earning a cent above that. I will not make that argument as it is not the point.
The rationale for the amendments is that we should start at the beginning and totally restore income for those who earn under the €65,000 threshold. That would be a good, equitable way to proceed given that this legislation only partially restores the income for those who earn under €65,000. Those on incomes over €65,000 receive the full restoration whether it be over two or three stages. That was the rationale for the amendment. It is not against those who earn over €65,000 getting income restoration but the restoration should start with those who are below €65,000. I want this to be clear on the record.
I thank the Minister for a comprehensive set of answers. I agree that the debate went beyond where he expected to go. He is making it difficult for me to vote against this Bill as he has been so forthright in his answers but perhaps the Minister could clarify some issues.
With regard to the teacher who works up to 150 hours, the Minister has satisfied my concerns there. The teacher who is on a fixed-term contract - previously called the EPT contract - and who is over 150 hours per annum has a salary calculated on the point of the scale. If this teacher's take-home pay falls below the €32,000 or the point where he or she would benefit from the PRD reduction of 2.5% because the salary for the scale is above the cut-off figure, the teacher then falls into an anomalous section.
The Minister said he had an agreement. I congratulated him on both the Haddington Road and Lansdowne Road agreements, which we fought hard on. Many people within the trade union movement are very dependent upon this legislation getting through. However, I can see that we have two difficulties. One is gardaí and the other is teachers. Gardaí say the Minister has reneged on a promise which was a review of structures, remuneration and the industrial relations process within the Garda Síochána. I do not know if the Minister can address those concerns and I do not wish to put the Minister on the spot.
The other difficulty is that of flexible hours in the teaching profession and the institutes of technology in particular. The Minister referred to the lecturers' 78 flexible hours during a previous debate here. There is no cost in dealing with this issue. The teachers and lecturers just want someone to sit down with them to discuss the usage of those hours. In light of the junior certificate and the hated 33 hours that have been brought in under the Croke Park agreement - I believe that even school principals hate those hours - it is the usage of those hours that needs to be addressed. Sitting down and discussing these hours would not breach the Haddington Road or Lansdowne Road agreements. I ask the Minister that while he may not be able to give a commitment here, he could talk to his colleagues in the relevant Departments to see if they were willing to sit with the various representative bodies to solve this problem. Nobody wants this to fail. I thank the Minister for his comprehensive answers and for being so generous with his time.
I was interested in what the Minister said regarding the Constitution.
Under the Constitution one cannot discriminate against a subset of a group. The Minister’s predecessor, Brian Lenihan, by selecting from the public servants Members of the Oireachtas alone to suffer the complete abolition of increments, accorded selective treatment to a subset of the public service. That seems to open the way to legal action because it appears to be against the Constitution. A small subset of the Civil Service is being discriminated against and is the subject of selective treatment.
I will do my best to bring Senator Craughwell on the final leg of the journey to be with me at the end.
The Minister is very kind.
The teachers working more than 150 hours are paid a pro rata rate of a full-time rate. It depends on how many hours they work over the 150. Taking the minimum annual salary at €30,702, divided by 52 and again by the 22 hours to be worked, the indicative hourly rate is approximately €26.83. That would be paid to teachers who are not full-time but work more than 150 hours per year. The solution as I see it because that is not a bad hourly rate-----
After six years of education?
The problem is there are not enough of them-----
Not enough at all.
-----if they were getting full-time work but the issue will not be resolved on the pay side.
In response to Senator Norris, it seems to me that these protections in some people’s eyes do not apply to politicians, that they apply to everybody else. I am not accepting the amendments in respect of picking out politicians or anybody else because I believe the Haddington Road agreement cuts imposed on people earning over €65,000 were done in a very fair way, picking a reasonable salary below which nobody was affected by additional wage cuts although they were asked to work additional hours and that is why in the restoration of it I have to be mindful of that too. Everybody will have pro rata restitution and I am not going to parse and analyse categories of people and say some public servants are worthy, some are not. My successor might feel differently about this. Even if the sins of the past are ascribed to some I am not going to say they are not worthy. That would be not only an invidious but an unconstitutional position for a Minister to take. If the day comes when a political party or a government should determine who is worthy or not, that would be a dangerous, slippery slope which I hope we would avoid. Maybe that is the view taken by Senator Reilly’s party, although I do not want to sound contrarian. I hope in terms of this set of amendments that I have said enough to assuage people’s concerns.
I will return to the Garda structure.
Under the Haddington Road agreement the pension-related deduction measures will increase the take-home salary of all public servants earning in excess of €15,000. Counsellors earn €16,000 which is in excess of €15,000 but they are not getting anything back under the Bill. Will the Minister please consider that?
I do not think the Senator was listening to me.
I am not sure it is relevant to the amendment.
A sum of €16,000 is €1,000 over €15,000.
In terms of the pension-related deduction, nothing was deducted from a salary of €15,000. We are increasing the threshold to €17,500. Those people will benefit because that portion of their salary that was subject to a pension-related deduction will now not be subject to it.
How much will they benefit by?
I appreciate that some of the issues the Minister responded to were perhaps outside the remit of the Bill. However, they were part of the Second Stage debate and there were unanswered questions.
Just because the Senator raised them does not mean we put them in order.
They have been raised by many people, public servants, in the context of the Bill.
I appreciate the Minister’s understanding of the damage that casualisation can do to the teaching profession. It is a huge problem because we are losing talent. If we lose the talent standards go down. We cannot say that often enough. The Minister did not address the impact of the Bill on the lecturers’ hours come 2016. They now do 18 and 20 hours. If they go back to 16 and 18 hours, extra staff will be needed in the institutes of technology. Where does the Minister stand on that? He might say that is for the Department of Education and Skills but it is triggered by this measure being pushed through. If the Minister could touch on that I would appreciate it.
I am intrigued and would like to follow on with this. The Minister, I think under advisement, suggested that politicians were a separate and special category.
No. I was saying that in the eyes of some but obviously not in the eyes of the Constitution.
That means that in fact there is a constitutional question over the removal of the increment because it is was not removed from any other group within the public service. That is a specific targeting of Members of the Oireachtas as against the larger group of civil servants involved.
What would the Minister’s sentiments be towards the restoration of the increment? People who have been here for 30 years earn exactly the same as people who have just been elected at a by-election.
New kids on the block.
Yes, exactly. I very much take the Minister’s point, which I heard when he talked about the way the Labour Party in Britain introduced pay for the first time. We do not want a parliament of industrialists and squireens. We want to make it possible for people to come in but given the way politicians are treated that is increasingly unlikely. I have heard several young people who had an interest in politics saying they would not go near it now. They say we are not financially rewarded and are subject to continuous abuse. The Minister is not saying that politicians are a special category but that in the view of some people they are. However, in the view of some people we are all complete blaggards in both Houses. We can discount the views of some people. It is a very nebulous concept.
I am interested in this aspect because it seems there is a kind of masochism about politicians generally and they rush to embrace cuts and pretend to be coy in public about getting restoration of these things but it is a different thing in the Members’ bar or in the restaurant or in the coffee dock. I will say what everybody else is thinking, apart of course, from the honourable people of Sinn Féin but I cannot supplement my income by doing a bank.
We do not all have pensions from Trinity.
Amendments Nos. 3 and 4 are out of order.
I move amendment No. 5:
In page 6, between lines 29 and 30, to insert the following:
“4. Notwithstanding the generality of the foregoing, nothing in this section shall provide for increases in the salaries of public servants in receipt of salaries in excess of €100,000 before the coming into effect of this section.”.
I move amendment No. 6:
In page 6, between lines 29 and 30, to insert the following:
“4. Notwithstanding the generality of the foregoing, nothing in this section shall provide for increases in the salaries of members of the Houses of the Oireachtas or Ministers of the Government.”.
If I may raise one point on section 5, I draw the House's attention to line 13 on page 7 of the Bill. There is a small administrative change in section 5(2). The original word "is" in the Bill as distributed is now "was", which is better English, I am afraid. The text now reads: "Where an amount was deducted ...”.
Is the Minister asking for a correction?
Yes. It is corrected.
I will direct the clerk to make that correction.
I move amendment No. 9:
In page 9, between lines 4 and 5, to insert the following:
“6. Notwithstanding the generality of the foregoing, nothing in this section shall provide for decreases in the pensions related deduction of members of the Houses of the Oireachtas or Ministers of the Government.”.
I move amendment No. 15:
In page 12, between lines 8 and 9, to insert the following:
“(8) Notwithstanding the generality of the foregoing, nothing in this section shall provide for a reduction in Public Service Pension Reduction of former members of the Houses of the Oireachtas or Ministers of the Government.”.
I move amendment No. 16:
In page 13, between lines 6 and 7, to insert the following:
“Report on public service pensions
8. The Minister shall, within one month of the passing of the Financial Emergency Measures in the Public Interest Act 2015, prepare a report on the number of people whose annualised amount of public service pension exceeds €34,132.”.
Amendment No. 16 is not accepted for two reasons. I am happy to give the information and we had this discussion in the Lower House. What the Senator is asking is that I cause a report to be made on information that is already in the public domain, as I have given it to the Dáil and answered on it by way of parliamentary questions. It can be answered and updated at any time. I do not intend to put it in as a formal part of legislation to give a single report when it should be answerable to a Member of the Oireachtas as a matter of course.
Amendments Nos. 17 and 18 are related and may be discussed together by agreement.
I move amendment No. 17:
In page 14, lines 4 and 5, to delete “in a collective agreement” and substitute “in collective agreements”.
These issues were discussed in the Dáil. In the Lower House, the Minister outlined that negotiations on public sector pay are extraordinarily complicated because there are so many unions and so many different agreements. I accept that it is important to take a sectoral approach and that such an approach has been taken with a number of key organisers. In terms of amendment No. 17, we are seeking an assurance that this legislation will not render null and void other agreements outside the Lansdowne Road agreement.
Amendment No. 18 was submitted to seek reassurance that this legislation is not going to render null and void other agreements. In the Lower House, the Minister referred to issues surrounding the striking of different sectoral arrangements between different categories of workers in bilateral arrangements and agreements. Perhaps he could clarify the position for the Seanad by reading his speaking note into the record.
I can give the Senator that assurance. This Bill relates to a particular agreement. That is why it refers to "a collective agreement". It is the legislation to implement the Lansdowne Road agreement. It does not, of course, void collective or sectoral agreements that are in place in any event.
Amendment No. 19 is out of order.
Can the Acting Chairman give the reason amendment No. 19 was ruled out of order?
It would involve a potential charge on the Exchequer.