Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Public service pay has been governed by a system of collective agreements since the Croke Park agreement was negotiated in 2010. These collective agreements have helped to ensure that public pay is managed in a sustainable, affordable and orderly manner. These agreements have also enabled significant reform of public services and changes to work practices.

As the Deputy will be aware, the current public service agreement, namely, Building Momentum, was due to expire at the end of 2022. Discussions recently concluded between the parties to the agreement following the triggering of the review clause of the agreement by public service unions and associations due to the increases in the cost of living. These were challenging discussions given the impact high levels of inflation are having on living standards of workers, but also because of the uncertainty in the global economic outlook. The Government’s aim in these talks was to strike the right balance and seek to achieve a deal that is fair and affordable to both taxpayers generally and public service employees.

The outcome of these discussions was a set of proposals put forward by the Workplace Relations Commission to extend Building Momentum for a period of 12 months, to the end of 2023. Three additional pay adjustments totalling 6.5% are provided for under these proposals over this and next year. The Deputy will be familiar with the detail of that.

The cost of these proposed pay adjustments under the extension to Building Momentum is estimated to be €1.6 billion spread over three calendar years - 2022 to 2024, inclusive. This extension would make Building Momentum a three-year pay deal. The extension acknowledges the higher than anticipated rates of inflation that have emerged since 2021 and, in particular, the impact of cost of living pressures. The existing agreement provided headline benefits of 3%. In total, including the existing agreement and the extension, headline benefits over the lifetime of Building Momentum amount to 9.5%, or just over 3% per year.

In respect of public servants at lower pay levels, the extended Building Momentum, as proposed, provides for increases of 12.5% over its lifetime, which is an average of just over 4% per annum.

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