Seán Fleming (Laois-Offaly, Fianna Fail)

According to the memorandum we received from the Minister last night the new scheme will reduce annual expenditure by approximately 35%, or €1.8 billion, based on current rates. The estimated savings comprise €1 billion from linking future pension schemes to the CPI as opposed to salary increases, €500 million from changing to career averaging and €300 million from the later pension age. I imagine the savings to be made if this section is implemented would greatly exceed those figures.

I believe that one of the reasons why public servants who knew about section 47 are not overly concerned about it is because pensions are covered by the Croke Park agreement. The Minister would be in breach of the agreement if he tried to implement the section now and, as he supports the agreement, we know he will not do so this year or next year. That begs the question of why the Minister included the section in the Bill in the first place. The issue of pensions for current public servants should be discussed in the context of negotiations on a successor to the Croke Park deal and the legislation could be amended at that stage. It is quite something for the Minister to give himself the power to change the fundamental basis on which pensions are paid to public servants 18 months before the end of the Croke Park agreement. The vast majority of public servants are not even aware that such powers are included in the Bill. The provision is not needed, although the Minister may decide he needs it at a future date. It certainly cannot be implemented while the Croke Park agreement is still in place. The Minister has indicated that the provision would be implemented by a draft order requiring the approval by the Oireachtas but the Government has a majority and does not need to reach agreement with the Opposition or public sector unions.

The current arrangements linking pay and pensions are the result of various labour conciliation agreements over a lengthy period of time. There is a clear understanding in labour negotiations that one is linked to the other. Even in the absence of Croke Park, the Government would be unilaterally breaching these agreements by implementing the section. These provisions could happily be parked for the next year or 18 months. Even at that stage it might not be possible to change the arrangements for the 300,000 public servants currently employed because these issues are covered by conciliation agreements that one hopes the Government would not unilaterally breach. If anything is to change in this area I hope it will only happen through negotiation. Like any good employer, the Government should only change terms and conditions of employment through consultation and agreement.

I ask the Minister to accept amendment No. 37 and delete the section. If need be, we can revisit the issue this time next year. We are fundamentally opposed to the section because it is not needed at this stage.

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