Michael Noonan (Limerick East, Fine Gael)

I am a bit slow on legal issues.

The second issue in the Bill is the proposed reduction in the salaries of the Taoiseach, Tánaiste and other officeholders. Fine Gael agrees with the intent of the proposal but reserves the right to further reduce the salaries if we are in office. We believe the proposals in the budget will reduce the income of so many people, including the poorest in society, and that this has left the Government with little enough moral authority. Given the reduction in payments to a variety of social welfare classes, it would have none if Ministers did not take a significant pay cut themselves. No Government would have moral authority after reducing the payments to blind persons, the carer's allowance, widows' pensions and allowances to the disabled if they had not touched their own pay.

Following the budget there was a view - I believe it was the Minister's fault - that Deputies' pay was left alone. I understand that Deputies' pay was cut by 28% in the past two years. However, it is not correct - as the public seem to believe because the Minister did not include it in his budget speech - that Deputies are unaffected by the budget. A new PRSI rate of 4% will apply to the pay of all Deputies and when this is taken with the decision already made to abolish increments to those Deputies who qualified for them, the loss will be approximately €10,000. Some Deputies, if elected to the next Dáil, will receive €10,000 less than they are receiving at present after the cuts. There are issues here as well and I wonder what the future generation of Deputies will do. At present take-home pay seems to be approximately €4,000 per month for Deputies, depending on their tax. If another €10,000 per annum is taken out in March or April after the general election they will be taking home €3,200 or €3,300 per month, which seems tight enough for Deputies with families at the expensive ages in secondary school and for whom they will need to pay fees in university. I am not beating my own drum - thank God, my adult children are now self-sufficient and are off the payroll for the time being at least. However, I know many of my colleagues have very heavy personal expenses.

It is amazing what the public perception is about the manner in which we are paid and the amounts we are paid. Last week one of my colleagues told me he had to meet approximately 300 pensioners at a meeting of the elderly. He was challenged on a number of occasions about his pay and why he would not take a reduction in pay, which they believed would balance the budget. He produced a payslip from his pocket and they were absolutely amazed that a gross salary of approximately €8,000 ended up being slightly less than €4,000 in his case. There was no more argument when he showed it around. He advised a group of us that we should never go out without a payslip in our pockets. He said all argument died once they saw it.

Fine Gael believes the reduction of €1 per hour in the minimum wage is a bad decision given that the minimum wage applies to less than 4% of the labour force. Many of those on the minimum wage are young and many are also immigrants, including young immigrants. A €1 per hour reduction on the pay of those workers on a 40-hour week results in a reduction of €2,080 on small income, which is a big whack of money. In addition the universal social charge also applies to those on the minimum wage and of course child benefit reductions apply. After this budget, a mother on the minimum wage with three children is down by €2,600. On budget day the Minister announced that one of the purposes of his budget was that those who could best afford it would pay, but he did not carry that through. A mother on the minimum wage with three children is down by €2,600 on a gross income - including child benefit - of less than €18,000, which is a major imposition and is very unfair. We will not wear that and will move amendments on Committee Stage to oppose that.

I return to a point I made earlier today. I am not sure if the Minister is aware that in his calculation of the universal social charge, while he put the income and health levies together, he stopped the levies at 7%. Proprietary directors of companies and self-employed professionals were paying 11% previously on incomes in excess of €200,000. The Minister has cut the PRSI by 1% for those persons, but they still have an advantage of 3%.

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