Alan Shatter (Dublin South, Fine Gael)

Tairgim: "Go léifear an Bille an Dara hUair anois."

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

I thank colleagues for agreeing to consider this legislation at an early stage. Deputies will recall that when I published the Bill at the beginning of August it was with a view to everyone having adequate opportunity to consider it ahead of our debates in this House.

This Bill honours a commitment in the programme for Government. I am happy we are in a position to proceed with this referendum at this early stage of the Government's term and at the same time as the presidential election. The terms of the Referendum Act 1994 require that a referendum Bill pass both Houses of the Oireachtas no later than 30 days prior to polling. I am grateful to all Deputies for their co-operation in taking it this afternoon.

The Government's main objective in bringing forward this proposed amendment to the Constitution is to put before the people an option which would allow the pay of judges to be reduced on the basis of certain conditions and in very exceptional circumstances. The proposal will protect the independence of the Judiciary while also maintaining the good public standing the Judiciary following a period during which, through no fault of their own, judges have found themselves in a very difficult position.

Safeguarding judicial independence is of value to every citizen. It means that people can be assured that judges' decisions are taken solely on the basis of law, independent of any fear, favour or influence, whether personal, political or media driven.

The power of judges to uphold the Constitution and strike down aspects of our law is a fundamental bulwark against the risk of tyranny and oppression. Impartial judicial decision-making and public confidence in that impartiality when disputes occur between the State and-or State agencies and individual citizens is an essential cornerstone of our constitutional democracy. Guaranteed this independence, the judicial system in a democracy serves as a safeguard of the rights and freedoms of all the people. We have been well served by our independent Judiciary and I have not, been nor will I ever be found wanting in ensuring its independence is strengthened and secured. As Deputies may be aware, in November 2009, when a member of the Opposition, I tabled a Private Members' Bill to amend the Constitution which, had the then Government seen fit to accept it, would have ensured that judges were in a position to accept the same pay reductions which had then been imposed on the public service. However, in the event it was not accepted and instead the previous Government, by specifically excluding the Judiciary from a levy applied to everyone else paid from public funds, put the members of the Judiciary in a difficult position, not of their own making. As Deputies will be aware, this resulted from the previous Government's interpretation of the terms of Article 35.5 of the Constitution.

This was not, I am convinced, the original intention of this provision which is operated in most common law countries, including the United Kingdom, Australia and the United States. Indeed, the current terms of Article 35.5 are taken from the original 1922 Constitution which replicates almost directly the terms of Article 3 of the US Constitution. Some countries, including the United States, have overcome the unfairness of the difficulty presented by the blanket protection of judicial salaries by allowing the salaries of judges to decrease in real terms over decades by failing to increase them in line with inflation or other public service increases. This explains to some extent why Irish judges are among the best paid internationally. However, in my view, this is not a valid approach, given the importance of the Judiciary as an institution of the State.

The Judiciary holds a unique place in the structure of our democracy, required daily to adjudicate on disputes between citizens and the other branches of Government and for that reason it is vital that its independence is protected from all potential attack. The respect for and confidence in judicial decisions is based on the confidence that every person who enters a court is secure in the knowledge that the judge is independent of the State and not subject to interference or threat, irrespective of the outcome of the litigation. This safeguard is fundamental to our constitutional system.

Some have argued that to adjust the Constitution in the proposed way undermines the framework of judicial independence outlined throughout Article 35. The point has also been made that the amount of money potentially saved would be relatively small. If implemented, the savings in respect of serving judges would amount to approximately €5.5 million per full year. Legislation setting a new lower pay rate in respect of newly appointed judges will be introduced this session by my colleague, the Minister for Public Expenditure and Reform. However, the savings are not the main objective. The Government approaches this issue from the point of view of fundamental fairness. Our strong view is that, far from attacking judicial independence, the proposed amendment is designed to strengthen and uphold the standing of the Judiciary and to ensure that, at a time of unprecedented fiscal and economic difficulty, members of the Judiciary are not perceived as an elite group immune to the current crisis who either will not or cannot contribute their fair share, in common with all others paid from the public purse. I believe the proposed amendment strikes a balance between the traditional protection afforded to judges' pay while allowing for the very difficult position in which Ireland now finds itself.

The Bill itself is short and contains just three short subsections that will be the focus of today's debate. The Bill as published proposes that Article 35.5 of the Constitution be amended by the substitution of the following:

5. 1° The remuneration of judges shall not be reduced during their continuance in office save in accordance with this section.

2° The remuneration of judges is subject to the imposition of taxes, levies or other charges that are imposed by law on persons generally or persons belonging to a particular class.

3° Where, before or after the enactment into law of this section, reductions have been or are made by law to the remuneration of persons belonging to classes of persons whose remuneration is paid out of public money and such law states that those reductions are in the public interest, provision may also be made by law to make reductions to the remuneration of judges.

As is evident from the proposed wording, the general protection afforded the Judiciary in most countries is retained. The second subsection confirms the current position, upheld by the Supreme Court in the well known case, O'Byrne v Minister for Finance in 1959, which held that the imposition of taxes on judges' salaries is valid. The final subsection provides that reductions made in the past or future in public service pay on the basis of the public interest can be applied, "by law", that is, by primary legislation enacted by this House, to judges' remuneration. In other words, reductions will only be done in exceptional circumstances.

It is essential to set out why this amendment is being put before the people by this Government. In early 2009, the Fianna Fáil-Green Party Government introduced legislation to apply a public service pension levy on all public servants. The members of the Judiciary were specifically exempted from this levy or deduction because, it was then stated, of the constitutional ban on reducing their salaries as in Article 35.5. Following on the pension levy introduced by the Financial Emergency Measures in the Public Interest Act 2009, a second Financial Emergency Measures Act was introduced later that same year which reduced the gross salaries of all those paid from the public purse. Again, the Judiciary was exempted from this reduction. Judges are not public servants; they are constitutional officeholders. They are, however, paid from public moneys and operate within the public service environment.

As the Chief Justice has observed, judges are daily witnesses to the difficulties which the current economic crisis brings - whether in family law, criminal proceedings or civil and bankruptcy cases. I believe it is essential that they themselves are seen to be subject to the very different circumstances which now prevail. The Judiciary recognised this necessity through the arrangement entered into by the then Chief Justice with the Revenue Commissioners which facilitated judges to make a voluntary contribution equivalent to the pension levy introduced in the first of the Acts to which I have already referred. I understand a majority of judges have made this contribution in respect of the pension levy deductions.

The current provisions of Article 35.5 have, in effect, led to an anomaly that puts judges' pay out of line with pay in the public sector at a time when that pay has been the subject of financial emergency measures approved by this House. It is worth noting that the 2009 report of the review body on remuneration in the public sector, which recommended pay cuts for higher-paid public servants, stated that the review body would have considered a cut in judges' pay in line with those borne by senior public servants but was precluded from doing so by virtue of Article 35.5 of the Constitution. This objective and independent report recognised the duty of judges to contribute proportionately, that is to say, on the same basis as others paid from the public purse, to tackling our financial emergency. In view of the inequity of the situation and cognisant of the difficult position in which judges found themselves, this Government, as part of our agreed programme committed to hold a referendum at the earliest opportunity on this matter so as to allow the people determine whether these Houses should have the power to cut judges' pay on the same basis as it has cut the pay of others paid out of the public purse. By enabling judges to pay their fair share, in this instance contributing an annual saving to the State of some €5.5 million, I believe public confidence in the administration of justice will be maintained and enhanced in the eyes of many of our citizens.

I will now turn to the specific draft amendment put forward by the Government in this Bill. The proposed Article 35.5.1 restates the existing general constitutional protections afforded to judges' remuneration while allowing for certain constitutionally based exceptions to this protection. It is important that this measure be retained.

As I have noted, judicial independence exists not for the protection of the Judiciary but for the protection of citizens. This proposed wording will continue to afford judges full constitutional protection from arbitrary or maliciously motivated reductions by any Government.

It was argued in the O'Byrne case in 1959 that the constitutional protection in Article 35.5 extended to exempting judges from the payment of income tax. This argument was rejected by the Supreme Court with the Chief Justice Maguire noting that:

To require a judge to pay taxes on his income on the same basis as other citizens and thus contribute to the expenses of government cannot be said to be an attack on his independence.

The proposed wording of subsection 5.2 simply acknowledges that judges are, like any other citizen, subject to the imposition of taxes and levies.

The substantive change in this provision is contained in subsection 5.3 which is drafted to allow that when, and only when, reductions have been made or are in future made by law to public service pay on the basis of the public interest, these reductions can be applied "by law" to judges' remuneration, that is to say, it can only be done by way of primary legislation passed by the Oireachtas. The provision clearly limits the reduction in judges' pay to cuts applying to others paid from the public purse. It also guards against any danger of successive reductions being made to judges' pay alone as it can only be done where reductions are being made to public service pay. To ensure that no misunderstanding of any nature whatsoever as to the purpose of this provision can arise, and that its intent is clear, I will on Committee Stage be tabling an amendment to subsection 5.3 to insert the word "proportionate" in the last line of the subsection so that the final words read "proportionate reductions to the remuneration of judges". As a consequence, if this amendment is accepted by the House, Article 35.5.3° - to be put by way of referendum - will read as follows:

35.5.3° Where, before or after the enactment into law of this section, reductions have been or are made by law to the remuneration of persons belonging to classes of persons whose remuneration is paid out of public money and such law states that those reductions are in the public interest, provision may also be made by law to make proportionate reductions to the remuneration of judges.

See this speech in context