Brian Cowen (Laois-Offaly, Fianna Fail)

Savings of approximately €1.4 billion will be made in a full year. As has been said, we are talking about a reduction averaging 7.5% in the public service pay bill as a pension levy or a contribution to a pension. The Pensions Board has done work on the benefit of public sector pensions and the difficulties private sector pension schemes have had in recent times. This will be a contribution towards the value of the pension at the end of one's one working life and not the payment of the full cost up-front. The reason we approached this as the means by which we could deal with the matter was it would not affect current pensioners' incomes. If one went for a payroll cut, one would also affect the income of existing pensioners.

Public service pensions are paid for out of current Exchequer funding and, therefore, this contribution is like an appropriations-in-aid for the payment of the pensions on an ongoing basis. The €1.4 billion is the full year cost and it will be approximately €1.16 billion in 2009. The proposal put to the ICTU was a levy of 3% on the first €15,000, 6% on the next €5,000 and 10% on the balance.

Statements have been made regarding the conduct of the negotiations. Experienced negotiators have been involved in this process for a long time. Social partnership is a well established process. It is standard negotiating practice in an industrial relations context to deal with the specifics of a proposition at the end of a process following the consideration of the background and relevant contextual issues and that practice was followed on this occasion. There was, however, significant discussion, both formal and informal, in advance of the tabling of these specific proposals about the contribution the public service payroll should make to the necessary fiscal adjustment. The fact that congress felt unable to agree to the proposals tabled by Government was due to the contents of the proposals not to the timing of their presentation. The measures proposed were what the Government regarded as necessary and appropriate having regard to all the relevant considerations including those put forward by congress itself.

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