Brian Cowen (Laois-Offaly, Fianna Fail)

Even in Deputy Ó Caoláin's world facts are facts.

The question on less of a reduction being applied to higher-paid people than lower-paid people is the central thesis of Deputy Ó Caoláin's argument.

We applied the pay reductions in a progressive way, as we did in regard to all the adjustments to the cost of public service pay. This has meant that lower paid public servants have suffered less of a net loss, proportionately, than those in higher grades. For example, a Civil Service clerical officer on the middle point of a scale will have suffered a net loss of 11.7% over the course of the three budgets since Autumn 2008. That loss, while significant, should be compared to the net loss of those in higher paid grades over the same period. An assistant secretary has suffered a net loss of over 24% of pay and a deputy secretary of over 27%. The most highly paid civil servants, level 1 Secretaries General, who volunteered for additional pay reductions, have seen reductions of more than one third to their net pay.

I am acutely aware of the difficulties that the reductions in public pay will cause but the Government had to take these decisions to stabilise the public finances. The reductions do not reflect any lack of recognition of public servants or the quality of the work they do. They are simply a matter of budgetary necessity in these extraordinarily difficult times.

The Minister of State at the Department of Enterprise, Trade and Employment with responsibility for labour affairs has indicated that he intends to include in the Industrial Relations (Amendment) Bill 2009 an inability to pay provision in respect of the employment regulation orders and registered employment agreements. Such a provision would have to balance current demands of trade unions and employers by continuing to modernise and streamline the joint labour committee system as well as strengthen the legal status of registered employment agreements, which alleviate the financial pressures employers face under the current arrangements. The final details of the provision remain to be decided. It is proposed to introduce an amendment to the Bill on Committee Stage in the Dáil to give effect to that objective.

The decisions which had to be taken by the Government were aimed at ensuring that we did not impose too great a burden through a reduction in the level of services which would have been required had we not considered the public service pay bill. They were taken after due consideration of the limited options available to us in the context of stabilising the public finances as our top priority. We must now see how we can proceed, having recognised that an agenda exists for further efficiencies on the non-pay side. We need to get more for less while continuing to stabilise the public finances. The aspirations of everybody in regard to these matters are reflected by the economic realities we all have to face. Our ability to cover the public sector pay bill is also determined by that consideration. The Government brought forward these proposals because they were necessary but we have no desire to follow the same route again. We want to engage on an agreed agenda in a proper context for further efficiencies on the non-pay side.

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