David Cullinane (Waterford, Sinn Fein) | Oireachtas source

I welcome the opportunity to have this debate today. The Minister laid his report on extending the FEMPI legislation before the House last week, which I have read in some detail. I have also juxtaposed that report with the summer economic statement. They make for very interesting reading. The language used in the summer economic statement contrasts very strongly with some of the language contained in the Minister's speech today, because he was speaking to two different audiences. The same is true of the language used by the Minister for Finance.

I have spoken directly to the Minister about public sector pay on several occasions. He knows I have a very real interest in the issue, as does Deputy Calleary and many in this House. I met with the Secretary General of the Department of Public Expenditure and Reform to discuss several issues with regard to public sector pay and I have spoken to some of the officials who are in the House today. They have all been very helpful. We are trying to cost a return to a single-tier pay structure in the public service. This week in the House the Minister said he would enter into discussions with some trade unions to try to bring about pay equalisation. I hope the information he gets can be given to us as well, because when we try to cost this we are told the data do not exist, it is impossible because of different systems used by Departments for pay and it is difficult to track where people would be if the changes were to be reversed. It is interesting that the Government is going to pursue this issue and I hope that we in opposition will get the same information the Minister gets when it becomes available.

The Minister for Finance said in his speech and his remarks about the summer economic statement that the recovery was bedded in. It is bedded in when it suits the Government. "We are in full recovery": that was the Government’s mantra before the election. Today, however, the Minister for Public Expenditure and Reform said our economy is growing but we are not clear of all danger. I accept that. I am not saying it is wrong, but the Minister is saying it only in the context of wanting to retain FEMPI for as long as possible.

My party is not in favour of the immediate scrapping of FEMPI because of the cost involved and because those at the top of the public sector would benefit substantially in a very real and unfair way. We want a fair and timely unwinding of FEMPI. If FEMPI was to be unwound here today, somebody on €25,000 a year would get €66 back; somebody on €30,000 would get €577; somebody on €35,000 would get €1,752; somebody on €185,000 would gain €53,000; and somebody on €150,000 would gain €35,000. I am not in favour of giving people who earn very large sums of money that level of pay restoration.

The pay cuts imposed on those earning over €65,000 under the Haddington Road agreement are being restored as part of the Lansdowne Road agreement. There was a separate registered agreement. Those who earn between €65,000 and €110,000 will have their pay restored in two parts: on 1 April 2017, April Fool's Day, and on 1 January 2018. That includes us Deputies, who will get an 8% pay restoration. Ministers of State will get more and the Taoiseach will get more again. Those on more than €110,000 will get restoration in three stages, but for those earning less than €65,000 who had their pay cut in 2010, there is no restoration. There is a €1,000 flat increase, which the Minister says is fair. The big winners, however, from the Lansdowne Road and Haddington Road agreements are those earning more than €65,000 and those earning over €110,000. That is one of the reasons I will not support the immediate scrapping of FEMPI. The emergency powers that the Minister and previous Ministers gave themselves in respect of public sector pay need to be repealed. The way forward is through negotiation. We want a negotiated unwinding of FEMPI, where the trade unions sit down with Government and others to create a fair and timely way to fully and faithfully unwind FEMPI. As part of that, for all the reasons the Minister mentioned about the problems in our public services and the need for money for health and housing, we cannot pay people earning over €100,000 or €150,000 more. We have to prioritise those on low and middle incomes. They have to be our absolute priority. Pay equalisation is a red-line issue for me. People need to understand, and some do not, that this is outside the terms of FEMPI. Even if FEMPI was scrapped it would not deal with that issue. That was brought in separately in 2010. There was no need to do it through emergency legislation because it affected new entrants who had no contracts.

This is the sorry list of FEMPI legislation and pay cuts brought in since 2008. First, in 2008, there was a pay freeze: workers were told their pay would be frozen for a year and that they would get an increase of 2.5% in September 2009. The 2.5% increase never came, but what followed crucified many public sector workers. There was the pension-related deduction, PRD, a pension levy on public servants in March 2009, and the comprehensive pay cuts for all public servants in January 2010.

That was followed by the Croke Park agreement, which introduced so-called productivity measures. The changes to the pay levels of new entrants were also made around this time. We had the Haddington Road agreement as well. The payments received by existing retired public servants were also cut. Then we had the Lansdowne Road agreement. We had five separate pieces of FEMPI and two pay agreements. All of that involved a lot of pain for those on low and middle incomes. Unfortunately, they have not benefited.

It was interesting to hear the Minister say that workers in the public service have to wait. I remind the House that I am talking about those on low and middle incomes. The Minister said we cannot afford to give them back money that was taken from them because of potential dangers and external shocks, etc. At the same time, he is saying the cuts of €5 billion that have been announced are safe. Maybe he is not saying that, and those cuts are now on the table. What about the €3 billion that the Government is putting away for a rainy day? Is that safe as well? It seems that the cuts and the rainy day fund are safe and cannot be touched. The Government intends to give taxes back to people at the top who may not need those additional moneys. The policy of making €5 billion in tax cuts is solid, as is the safeguarding of €3 billion for a rainy day. It seems that those funds will somehow be shielded from the external shocks and dangers mentioned by the Minister. At the same time, the Minister is using a set of different criteria when it comes to the unwinding of FEMPI.

I cannot get a sense of the Minister's plan. I told him during yesterday's discussion that I cannot understand his approach. He does not seem to have a plan beyond 2018. When the Government set out its net fiscal space in the summer economic statement, there was no provision for public sector pay in 2019, 2020 and 2021. I know the Government intends to enter into discussions and to establish a commission, etc. I ask the Minister to give us an indication of what he thinks will happen. Can he at least tell us he envisages that some sort of agreement involving the further unwinding of FEMPI will be in place for the three years in question? At least then we would know that progress is to be made. The Minister has not given us such an assurance up to now. I would like to know whether he will do so today.

Many people called for a debate on this issue. I do not see the spokesperson for the Labour Party here. Given the importance of the issue of public sector pay, I do not believe there are enough Deputies in the Chamber for this debate. People were jumping up and down about this last week.

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