Tommy Broughan (Dublin Bay North, Independent) | Oireachtas source

I am delighted to have this brief opportunity to speak on the important issue before us, namely, pay inequality in the public service. Of course, I voted against the blanket bank guarantee in September 2008 which led to the series of shocking cuts and unfairness within the public sector and caused serious damage to the services offered to the Irish public. In November 2011, I voted against the renewal of the bank guarantee. From 2011 on, budgets continued to slash public servants' pay and significantly impacted upon those on lower pay scales in particular. The Department of Public Expenditure and Reform released a report in March 2018 which showed that lower-paid staff in the public service are paid considerably less than their counterparts in the private sector. The report also found that over 60,000 people had been affected by the lower pay rates introduced for public service personnel recruited after 2011. There has been damage from decision made by the then Government in late 2010 to reduce pay rates for new entrants to the public service, including in the context of the capacity of the service to recruit and retain staff.

The policies followed by the Government in response to the financial crisis in 2008 added huge banking debts to our national debt. These policies were introduced by the then Government of Fianna Fáil and the Green Party, supported by Deputy Finian McGrath and Fine Gael, the members of which sat on these benches at the time. The years of austerity over the lost decade since have had an enormous impact on the salaries of public and civil servants at all levels as massive unilateral pay cuts were combined with significant increases in charges and taxes. There were four waves of cuts after 2008, including by way of the Financial Emergency Measures in the Public Interest Acts, the first of which imposed an 11-month pay freeze. All previous pay agreements were abandoned.

In March 2009, the pension levy on public servants was introduced and their pay was deducted, causing a drastic reduction in gross pay. The second FEMPI Act in December 2009 introduced a comprehensive pay cut from 1 January 2010. Following these cuts, a clerical officer in the civil service suffered on average a pay loss of €1,500 gross per annum. That was followed in 2013 by the Haddington Road Agreement which introduced further cuts in public service pay and pensions.

This agreement introduced increment deferrals, overtime rate changes and changes in flexible work practices. As well as these four waves of cuts, the Government also restructured two levies, the income levy and the health levy into the universal social charge. It is a shocking history of austerity that has impacted very severely on our public servants and the services they offer to the public.

During these years successive Governments cut public service employment. Overall, there was a 10% reduction in jobs across all the public sector. These cuts have resulted in huge income losses for all public and civil servants, but particularly those on lower incomes. For example, teachers who entered the profession after 2010 are on completely different pay scales to their colleagues even though they have the same duties and responsibilities. Budget 2011 slashed new teachers’ pay by 10%. In 2012, most pay allowances above the basic salary scale were abolished for those entering teaching.

While the Association of Secondary Teachers of Ireland, ASTI, has made some progress in having these cuts restored, it remains that new and recently qualified teachers are on an inferior pay scales. The joint statement by ASTI, my own union, the Irish National Teachers' Organisation, INTO, and the Teachers' Union of Ireland, TUI, about six weeks ago rightly concluded that pay inequality is having a divisive and damaging impact on teaching and education. The presidents of the three unions pointed to increasing evidence of a brain drain from teaching as well-qualified young teachers are being offered full salaries and long contract jobs abroad. As a result in the science, technology, engineering and mathematics, STEM, subjects especially, schools are experiencing serious difficulties in recruiting qualified teachers. Since February 2011, graduates who entered teaching are on reduced pay and their projected income losses over a 40 year career, compared to colleagues who began teaching before 2011, range from €70,000 to €100,000. The three unions' call for equal pay for equal work is unanswerable in fairness and justice and the Government must move urgently to completely right this wrong imposed in 2011.

The damage to public services over the last decade by the FEMPI legislation cannot be underestimated. During the period from 2008 the public service was slashed by over 10% from 320,000 to a low of 288,200 in the last quarter of 2013. Much of this resulted of course from a moratorium on recruitment and promotion in the public service introduced by the Fianna Fáil-Green Party Government in March 2009. The impact of such a dramatic slashing of public services, education, security, namely, An Garda Síochána and the Defence Forces, the public service itself and in local authorities created severe pressures on our public infrastructure which persists down to today. Many of the recent controversies that we have discussed day in, day out in this Chamber, from housing to health services, all go back to the outrageous cuts and the slashing of public services staff and the failure to recruit key staff. Recently, for instance, we discussed assessments of children with disability, early intervention assessment. That comes down to what the Minister of State's party, Fianna Fáil and the Green Party, supported by people such as Deputy Finian McGrath, did over this lost decade.

The Department of Public Expenditure and Reform should immediately commit to full pay restoration for the 60,000 public servants, including teachers, who have been affected by the lower pay rates introduced for public service personnel since 2011. The cost has been estimated at €200 million to end this two-tier pay system which has existed for nearly eight years and which affects almost 20% of public service staff. This cost equates to roughly €3,301 on average for new entrants on top of exiting benefits under the Public Service Stability Agreement. The health sector accounts for around €84.3 million of the estimated €200 million incremental adjustments needed. The education sector pay equality bill would be about €83 million, with around € 59 million for teachers. The similar cost for civil servants would be almost €16 million with an additional €12 million for the justice and defence sector and about €4 million to achieve pay equality in local authorities.

The recent Department of Public Expenditure and Reform report of course referred to the merging of new scales and the existing scales under Haddington Road which equated to adding a lower two points of the new pay scale to the existing scale and so implementing a new larger pay scale. The impact of this has produced an extraordinary unfairness where people doing the same work are not being paid the same. The general secretary of the Irish Congress of Trade Unions, ICTU, Patricia King, correctly called for an urgent pathway to remedy this wrong.

It seems ironic that the continuing refusal of the Government to address this issue coincides with a Cabinet decision to establish a so-called rainy day fund. I asked the Tánaiste, Deputy Simon Coveney, and the Taoiseach about this earlier. Our pension fund, which was initiated by the then Minister for Finance, Charlie McCreevey, was robbed and decimated by Fianna Fáil, Fine Gael and their allies in the last decade. I always favoured a sovereign wealth fund on the lines of Norway or the Gulf States for the long-term welfare of our people. I am also well aware that the NTMA is refinancing huge trenches of our national debt of in excess of €100 billion in 2018 and 2019. However, setting aside €500 million a year for the next three years, plus €1.5 billion from the Ireland Strategic Investment Fund, which is our sovereign wealth fund, seems bizarre in the context of rolling back FEMPI and creating a modern well qualified and focused public service, not to mention addressing escalating hospital waiting lists and addressing the current housing emergency.

The Committee on Budgetary Oversight has discussed this at length. The Minister appeared at the committee where he spoke about the rainy day fund but he could not explain why he needed it, other than that the European Union is asking us to establish it. He could not explain if it was an emergency fund for the bad weather period we had with flooding and snow, for instance, or if it was a counter-cyclical fund. We still do not know its purpose but the Cabinet has decided to go ahead with it nevertheless. We know that next year's fiscal space should be €3.2 billion but this has been seriously eroded by earlier spending commitments after 2018. The removal of another €500 million for the so-called rainy day fund makes the task of addressing pay inequality and other critical issues significantly more difficult. Full pay restoration for our public servants must be a key priority for Budget 2019 and the Minister for Finance should factor the additional necessary €200 million into the budget arithmetic in the summer economic statement which we expect in the next three or four weeks.

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