Paul Connaughton (Galway East, Fine Gael) | Oireachtas source

Like many Members of this House, I am disappointed that the Croke Park II proposals were rejected by the unions, but now that they have been rejected, it is important that we properly explore the reasons they were rejected and consider the views that were shared in order to determine the best course of action. There is no easy option to be taken. A total of €300 million in savings must still be found from the public pay bill. After the significant cuts to pay in recent years, there are no easy avenues to take on this occasion, and the necessary cuts will be a cause of great concern for many public sector workers. The pay and pensions bill currently accounts for over 35% of all public spending and so, in order to bring the public finances back to a more sustainable level, that bill must be tackled. The savings necessary for this year are significant in terms of getting public spending back on track but are also important in ensuring that Ireland's finances are put on a more sustainable footing in years to come.

At all times the Government has endeavoured to proceed on the basis of consensus, and thus a lengthy negotiation process took place before the proposals rejected last week were finalised. The proposals rejected last week would have seen €1 billion in savings delivered through a range of pay and productivity measures as well as workplace reforms. The aim of the proposals presented last week was to protect lower-paid public servants and would have protected the core salaries of the 87% of public service workers who earn under €65,000. That fact has been lost somewhere in the fog of debate surrounding this issue. Protecting the pay of those who earn under €65,000 was a significant element of the deal rejected last week, and this core protection was a key reason many public service workers opted to vote for the proposals despite the many harsh measures they contained.

If legislation is the route pursued, although I hope this will be a last resort, it will institute pay cuts for public servants, Members of the Oireachtas and members of the Judiciary, and will also involve cuts to pension payments of former public servants.

There was a perception abroad that front-line workers were going to bear the brunt of these cuts. However, the LRC proposals were, in fact, fairer than the perception. For example, a staff nurse working 22 Sundays and public holidays and twilight shifts every two weeks would have seen a reduction of 3.8% in gross pay or 2% in net pay. Similarly, a garda on the maximum point of the scale would have seen a drop of 3.6% in gross pay or 2.3% in net pay, while a primary teacher on the tenth point of the scale would have seen a a reduction of 3.5% in gross pay or 1.9% in net pay. However, there are two points that are not represented by these figures. First, many of the families concerned are already in considerable financial distress, having borrowed at the height of the property boom. They now find themselves in negative equity and struggling to make mortgage repayments. Second, the impact of workplace reforms on teachers whose supervision and substitution arrangements are being totally overhauled has to be noted.

Another misconception relates to the number of public servants on very high salaries. As most public servants are only too aware, there are very few positions at the top end of the pay scale. Some 1% of public servants are paid over €150,000. Under the proposals rejected last week, a senior public servant on €175,000 would have faced a reduction of 7% in gross pay or 5.9% in net pay.

It is welcome that the Government has requested the head of the Labour Relations Commission to contact the various parties involved to establish if further negotiation can yield results. Perhaps a teasing out of the exact reasons people voted "No" might point towards a possible solution to allow progress to be made in the coming weeks.

One element of the entire set of proposals that needs to be looked at is pensions. I note that the LRC recommendations do not relate to pensions currently in payment as the trade unions do not have a mandate to negotiate for pensioners. It is the Government's stated intention to require public service pensioners to make a further contribution, ensuring an element of burden-sharing by higher paid pensioners. It will remain incredibly difficult to sell this deal while former Taoisigh, politicians and bankers enjoy huge pensions. This element needs to be tackled. Many of those at the root of the problems we are facing have, apparently, sailed off into retirement without as much as a backward glance at the trail of destruction they have left in their wake, free to enjoy over-generous pensions paid by a nation which simply cannot afford such generosity.

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