Brendan Howlin (Wexford, Labour) | Oireachtas source

This Government afforded trade unions the opportunity to ameliorate the budgetary challenge facing their members in the public service. On two occasions, Deputy Martin's Government cut the pay of public servants unilaterally - no negotiations, no votes, just cut.

There is no doubt, and I say this honestly, that I would prefer to be standing in front of this House this evening defending the outcome of a negotiated process and the need to implement the LRC proposals to reduce the cost of the public service pay and pension bill by €1 billion over the next three years. That was not to be. I do not doubt, though, that if it had been passed, there would be many opposite who would be opposing me, although not necessarily some of those who spoke earlier, who actually have an understanding of these matters. However, I still believe that the LRC proposals were fair and balanced, and, in particular, fair and balanced to the public servants involved. They protected core pay and allowances where those allowances were part of core pay. I have spent two years defending the Croke Park Agreement. I have spent two years explaining why, in many instances, allowances are part of core pay.

In terms of the comments just made on intergenerational solidarity, one of the core objectives of this set of proposals was to end the disparity that had developed in recent years in that regard. The proposals segmented the workforce into four income categories and treated each differently. Those earning in excess of €100,000 would suffer permanent losses in pay. Those between €65,000 and €100,000 were afforded a path to pay restoration following the expiry of the agreement. Those under €65,000 suffered no loss in core pay. In the zero to €35,000 and €35,000 to €65,000 categories, the treatment of increments was similarly progressive. Central to the agreement was a series of productivity measures which reduced the need for cash savings. This was a complex deal, much more complex than Croke Park I because it strove so hard to be fair and balanced. The negotiators, particularly from the trade unions, worked hard to achieve that balance.

The proposals were also, I believe, fair to the taxpayer. We have not heard much about the taxpayer in this debate so far - in fact, I do not believe the taxpayer was mentioned by any of the Deputies opposite. The taxpayer is entitled to have public services that reflect the 24-7 nature of the modern world. I regard that as important as ensuring that the public service reflects best practice in the treatment of its workforce. The proposals also made good on a strong desire of mine to replace the two-tier pay scales introduced by Deputy Martin's Government, the very point that was just referred to opposite.

Let me put it on record that I accept the decision of public servants in the ballot. I do not believe this decision constitutes a rejection of collective agreements by them but, in the absence of an alternative agreement, that is the space we now find ourselves in. I have heard some teacher unions' representatives defend their move towards strike ballots by claiming they are not the "aggressors". I find the language strange. There are no aggressors here, merely a Government seeking to make good the huge hole in the public finances caused by Deputy Martin's party. This issue arises solely because of the place we, as a people, collectively find ourselves in. The public finances - or in normal parlance, the employer - remain in a perilous position. Were this the private sector, there would talk of job losses and jobs would be on the line.

I was concerned about some of the information imparted during the ballot process and felt it necessary to make some statements during the debate. Deputy Fleming and others have sought to make some noise about those comments, and we have heard them again tonight. Why this is so in Deputy Fleming's case, I am not sure, because his only point of substance was to demand €50 million more in savings this year - that was his contribution on the politics programme on the Sunday before the ballot was announced. Nor is there any evidence that he read what I said, although he did accurately quote it tonight, finally.

My message was a simple one. The savings required were and are real, and in the absence of the desired agreement to pursue them in a negotiated fashion, they would still have to be made and there is no escaping that. That remains my position. It was for clarity on this issue, so people would make very difficult and momentous decisions that affected themselves and their families while knowing the full facts, that I made the statements I made, with a rigorous appraisal of the State's finances and laying out the quantum of savings I genuinely believe are required from pay and pensions. Some of those who left the talks on the eve of the agreement had been aware of scale of the challenge for well over a month at that stage.

Listening to some union leaders commenting since the vote, it seems there is now a groundswell against austerity. Austerity is a nice phrase to hang your hat on, so let us deal with that one. I am not a believer in austerity. I believe in a more coherent anti-austerity strategy across Europe, which would be a good idea not only for Ireland but for all of Europe. If President Barroso needs an ally in this regard, given the comments he made yesterday, he certainly has one here, in me. The key threat to Ireland successfully exiting its programme of assistance is the economic environment in Europe itself. I am not a dreamer either, however. I have been in politics long enough to know the damage done to a small country like ours by not being able to pay its way. Burgeoning deficits in the 1970s - Fianna Fáil again of course - undermined our viability and led to the inevitability of an imbalance in our books. As we found out then, who will invest in a country in a permanent sense of crisis? We dragged on that recession unnecessarily because we did not take the necessary corrective action early enough, which is the fault of all parties.

This State is pursuing anti-austerity policies by any definition. We continue to run up a sizeable budget deficit each year despite our enormous debt burden. The size of the budget deficit is being reduced in a steady and rational fashion. The Government has already added a further year to that timetable by negotiation with the troika, but the idea that we can push that debt burden higher and higher on a permanent basis defies reason and mortgages the future for the next generation of Irish citizens.

I know the measures the Government has to take are unpleasant. God knows I do not want to be the bearer of bad news. I wish I was Minister for Public Expenditure and Reform in good times rather than the most awful times in our history. These measures are difficult for people to accept, and I understand that, but this will be the final push to secure the exit from Deputy Martin's troika programme.

On a side issue, Deputy Fleming is much taken with the idea that letters of clarification issued during this process. I find his fascination with the issue to be strange. He seems unfamiliar with the normal practice of industrial relations, at least as practised by his own party. There are numerous letters of clarification in existence in regard to the original Croke Park deal negotiated by his Government.

Today, the Government had an initial discussion on the implications of the rejection of the proposals of the LRC. In line with our overall approach, which is that we much prefer to achieve the reductions that are needed in pay and pensions by way of negotiation rather than by unilateral expropriation, the Government decided to ask Mr. Kieran Mulvey of the LRC, who facilitated the talks process in January and February, to make contact with the parties to see whether there is a basis for a further engagement that might lead to an agreement.

He will do that exploration over the coming days with both sides and report in time to allow for a further discussion and decision by the Government. I do not want to put a timeframe on his work but we estimate it will be about a fortnight. The Government is certainly willing to talk to staff representatives who are prepared to reach a realistic compromise with the Government on how to make these demonstrably needed savings. The reality of the budgetary timetable is such that time for any discussions is running out. I hope this satisfies Deputy Fleming. It certainly meets his dual requirement of holding open the door to a negotiated solution while remaining clear about the scale of the fiscal challenge to be met, although, as I pointed out earlier, he wants to make deeper cuts this year.

Indeed, looking at Fianna Fáil's pre-budget material from last year, one can see a sense of fauxoutrage at the Government's strategy that is manifest in tonight's motion. It is no harm reminding the House of Deputy Fleming's commitments made less than six months ago on this talks process. This is what the Fianna Fáil pre-budget proposal said. It was the published, official position of Fianna Fáil for this year's budget:

We believe the pay and pensions bill is not falling fast enough and an additional €350m needs to be achieved in 2013. However, should agreement with the unions not be reached by March 1st 2013, the Government will have to consider a range of measures to achieve this additional level of savings including: a reduction in the sick leave, including uncertified sick leave bill of €50m; an average cut of 5% in actual allowances to save €75m; deferral of increments for 2013 to save €170m, with no increments payable above €100,000; accelerated targeted redundancy in administrative and management grade numbers to save €30m; additional working hours and a change to work practices.

So said Fianna Fáil six months ago. This House is well used to Fianna Fáil's year-zero approach to anything that took place between 1997 and 2011 but it appears that on this occasion, a special exemption is being made for 2012. Earlier today, Deputy Fleming led a walkout of the Opposition from the Select Sub-committee on Finance, Public Expenditure and Reform, having falsely accused the Government of doing what his party had advocated - same old Fianna Fáil.

In conclusion, as a Government and as a society, we are now facing an extraordinarily serious and daunting challenge. It is certainly the most serious challenge we have faced in generations and is probably more serious than any challenge except those faced by the founding Government of the State. We are entering a critical period of our engagement with the troika, which I met this evening at 6 p.m. We are moving to discuss our exit from the bailout programme. Adherence to our budgetary targets remains as important as ever if we are to achieve this critical national goal.

Despite a media furore about public service pay, since taking office, this Government has remained wedded to walking the route of co-operation with public sector workers. We want to work with trade unions that want to work with us. We would like to afford public service workers the protections of a collective agreement and certainty. It is for that reason that the Government decided today to ask the Labour Relations Commission to talk to all the parties involved to see if, even at this late stage, there is any possibility of an a negotiated outcome which meets the Government's and the country's spending targets. I thank Mr. Mulvey and his team for accepting this task. They contributed hugely to this process in the original discussions. They are respected by all the parties involved and I know engagement with them will be honest and constructive. For those reasons, I commend the amendment to the House.

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