Brian Lenihan Jnr (Dublin West, Fianna Fail)

In deciding how this €1 billion of savings would be applied to the salaries of public servants in 2010, the Government was guided by the need to ensure that those who earned more would contribute more and that office holders and other senior public servants would lead by example.

The reductions effected range from 5% to 8% in the case of public servants with salaries of up to €125,000. The reductions provided for are balanced and progressive but they are not painless and they had an adverse impact on all public servants in their daily lives. We all have to adapt our financial commitments and living standards to our available income and, therefore, any measures which reduce that income require immediate and difficult adjustments. I am well aware that public servants in many cases are struggling to cope with reductions in their incomes. This is especially the case for those public servants on modest incomes and, in reality, almost two thirds of public servants earn €50,000 or less per annum.

Given the numbers of public servants on lower salary levels, it would simply not have been possible to achieve the scale of reduction required in the pay bill by exempting those on lower salary rates. In deciding on reductions, however, I was conscious of the need to keep the rate of reduction in their salary levels as low as possible.

I was also aware that, in general, public servants on modest salaries have access to incremental pay scales based on satisfactory performance and service and this can become an important element in their salary. The Fine Gael policy suggested freezing incremental scales within the public service. Deputy Bruton and Deputy Kenny regularly held up this measure as an example of how they would deal with the public finances. Where is the fairness in that proposal? It is a direct hit on the pay of lower civil servants.

We, in Government, rejected that option precisely because it would unfavourably and disproportionately impact those on lower salaries for whom increments can represent a significant element of remuneration over time. For example, the average value of incremental increases at lower grade levels in the Civil Service range from more than 3% to in excess of 4.5%. These incremental increases remain in place albeit at the reduced rates.

For public servants with a basic salary over €125,000 reductions were generally as follows: 8% on a salary over €125,000 but less than €165,000; 12% on a salary over €165,000 but less than €200,000; and 15% on a salary over that.

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