Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

-----throughout the public service, whether it is the Association of Higher Civil and Public Servants or other unions, through national wage agreements. The most effective way to tackle high salaries is the income tax system, which is progressive in this country. It basically means that when one gets to a certain level, approximately 50% is taxed. That rarely gets said in the debate but it is the reality. That relates both to USC, which is especially harsh or strong on those on very high incomes, and to higher income tax rates. That is the most effective in terms of redistribution of income from higher salary earners and is a more effective way of doing things.

With regard to Civil Service renewal, the Minister, Deputy Michael McGrath, has indicated he will undertake a comprehensive review of all of the issues around Civil Service recruitment and pay. He proposes the establishment of an external review panel to make recommendations to strengthen the recruitment processes of senior public service posts and the process for determining the terms and conditions of employment. To ensure transparency and objectivity in the process, it is proposed that the panel will consist of three members from different relevant backgrounds with secretarial support to be provided by the Department of Public Expenditure and Reform. Officials in the Department of Public Expenditure and Reform are currently examining the issues and will recommend terms of reference, scope of the review and potential membership of the review panel.

This Oireachtas, in previous iterations, already passed financial emergency measures in the public interest, FEMPI, legislation. The process of unwinding the financial emergency legislation commenced under the Lansdowne Road agreement between unions and employers and the State, which covered the period 2016 to 2018, with the remainder of the process largely completed under the Public Service Stability Agreement 2018-2020. The final elements of pay restoration have continued under Building Momentum, a new public service agreement for 2021 to 2022. Salary rebates up to €150,000, which account for 99% of the public service, have been fully restored. Section 20 of the Public Service Pay and Pensions Act 2017 states that the Minister, by order, shall provide for completion of pay restoration to public servants paid an annual basic salary of more than €150,000 by 1 July 2022.

In light of the consideration now being given to an external review to examine the processes and procedures around the recruitment of senior public servants, as well as the process for pay determination at senior levels, the Department of Public Expenditure and Reform is currently examining potential options around how and when this final element of restoration will be implemented. As restoration is provided for in legislation, this will require careful consultation with the Office of the Attorney General.

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