Brian Lenihan Jnr (Dublin West, Fianna Fail)

I move: "That the Bill be now read a Second Time."

When introducing my supplementary budget, I stated that fairness must be the cornerstone of all our efforts to achieve economic renewal. In that context, it was decided that those in these Houses and in the Government must examine their own costs and make their contribution to the savings that must be achieved in this time of unprecedented economic difficulty. The measures in this Bill, along with what Members already have done, show they are willing to play their part in efforts to bring about national recovery. I acknowledge that, in advance of the legislation, many Members made voluntary contributions in respect of their pension arrangements to assist the national finances. This is as it should be, given the sacrifices that have already been made by many across the economy, especially by those who have lost their jobs.

Last October, members of the Government and Ministers of State took a reduction of 10% in their salaries. This cut, along with the pension levy, amounts to a 20% cut in ministerial salaries. The number of Ministers of State has been cut from 20 to 15. Some Members of the Oireachtas also took a voluntary pay reduction and some have also voluntarily forgone their entitlement to their ministerial pensions.

I am acutely aware that the measures in the recent supplementary budget have imposed a burden on people. The Government was guided by the principle that the burden had to be spread fairly, with those who could afford to contributing in accordance with their means. It was, therefore, incumbent on us in these Houses to play our part and, accordingly, the budget provided for changes in Members' remuneration. These measures included a 10% reduction in all expenses other than mileage rates, where a 25% reduction has already taken place and a provision whereby Oireachtas Members will no longer receive long service payments or increments. The arrangement whereby former Ministers are paid ministerial pensions while they are still Members of the Oireachtas will be discontinued.

This Bill provides the necessary statutory basis for the changes announced for long-service increments. Since the budget announcement in this regard, 45 Oireachtas Members have forgone increments that fell due. The budget date was taken as the date for the effective suspension of these increments and they ceased at that point.

The Bill also provides for the abolition of the current arrangement whereby former Ministers are paid ministerial pension while they are still Members of the Oireachtas or the European Parliament. I will be proposing an amendment to the Bill on Committee Stage that will enable me to provide for regulations for a composite expense allowance for Deputies and Senators, in lieu of existing allowances, as proposed by the Houses of the Oireachtas Commission. This is an enabling provision and I am of the view that Members need to consider these proposed changes further before any effect is given to it by regulation. In the interim the existing system of allowances will remain in place and I will be bringing forward the necessary regulations to reduce the majority of the Oireachtas expense allowances by 10%. A 25% reduction in travel rates has already been implemented. I will elaborate on this on Committee Stage.

While these measures are intended to effect savings on public expenditure, their financial impact will not be significant although they are a real contribution by Members as individuals and a signal that Members of both Houses are willing to give a lead in a time of great economic difficulty.

Section 1 defines "Act of 1938" as the Ministerial and Parliamentary Offices Act 1938. Section 2 provides that long-service increments will not be paid to Members who would normally have qualified for a long-service increment on or after 13 May 2009. So far, 45 Members have been affected by this provision. It also provides that long-service increments will not be paid to any Member of the Houses of the Oireachtas after the next general election.

Section 3 addresses pensions to former holders of ministerial and other offices. It concerns pensions awarded to officeholders under the old officeholders pensions scheme, those who qualified for such pensions before 13 January 1993 when the new officeholders pension scheme was introduced and who did not opt to join the new scheme. Officeholders are taoisigh, Ministers and Ministers of State. The section provides that between the passing of this Act and the next general election officeholder pensions paid to sitting Members of the Houses of the Oireachtas will be reduced by 25% and the pensions will cease to be paid to such Members after the next general election. In the case of Members of the European Parliament, the reduction will apply until the next European Parliament elections. Pensions will cease to be paid after that date for sitting Members.

Section 4 concerns pensions awarded to officeholders under the new officeholders pension scheme to persons who have three years or more of qualifying service. New scheme Members are those who first qualified for an officeholder's pension after 13 January 1993, when the new scheme came into effect. It also includes persons who had already qualified under the old scheme but who opted into the new scheme. These pensions are not paid until the person concerned reaches the age of 50 and the pension is reduced to a half while the former officeholder is sitting in either House of the Oireachtas or the European Parliament. The only exception is for former taoisigh, in which case, under the new scheme at present the pension is not reduced.

The section provides that between the passing of this Act and the next general election officeholder pensions paid to sitting Members of the Houses of the Oireachtas will be reduced by 25%. This provision is given effect by reducing the pensions by 62.5% rather than 50%. It also provides for a reduction of 25% in the pension paid to former taoisigh who are Members of the Houses of the Oireachtas or the European Parliament. At present, such a pension is not reduced.

The section also provides that the pensions will cease to be paid to such Members after the next general election. In the case of Members of the European Parliament, the reduction in the pension will apply until the next elections for the European Parliament and then the officeholder pensions will cease to be paid after that date.

Section 4 also provides for some technical amendments to the legislation by the renumbering existing provisions. Section 5 deals with ministerial, secretarial, minister of State and other officeholder pensions awarded under the new scheme to persons who have more than two but less than three years qualifying service. The qualifying period for officeholders' pensions was reduced from thee years to two in 2001. The provisions of section 5 are essentially the same as those in section 4 of the Bill. It provides that the officeholder pensions will cease to be paid to former Ministers who are sitting Members after the next relevant election. In the meantime, the pensions paid to such sitting Members will be reduced by 25%.

It is a matter of considerable public debate but the Attorney General advised the Government on the drafting of this legislation and the maximum possible reduction that can be effected on those with existing pensions. Section 6 of the Bill concerns the Short Title and collective citation. When it comes to politicians' pay, it is next to impossible to please. It has ever been thus and Ireland is not unique in this regard. By these measures, Members of the Oireachtas and the Government show our readiness to play our part in the national effort to restore this economy to health. I am sure other groups in the State will show similar readiness.

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