Dáil debates

Thursday, 9 July 2009

Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices Bill 2009 [Seanad]: Second Stage

 

11:00 am

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

When introducing my supplementary budget, I stated that fairness must be the cornerstone of all our efforts to achieve economic renewal. In that context, it was decided that those in these Houses and in the Government must examine their own costs and make their contribution to the savings that must be achieved in this time of unprecedented economic difficulty. The measures in this Bill, along with what Members already have done, show they are willing to play their part in efforts to bring about national recovery. I acknowledge that, in advance of the legislation, many Members made voluntary contributions in respect of their pension arrangements to assist the national finances. This is as it should be, given the sacrifices that have already been made by many across the economy, especially by those who have lost their jobs.

Last October, members of the Government and Ministers of State took a reduction of 10% in their salaries. This cut, along with the pension levy, amounts to a 20% cut in ministerial salaries. The number of Ministers of State has been cut from 20 to 15. Some Members of the Oireachtas also took a voluntary pay reduction and some have also voluntarily forgone their entitlement to their ministerial pensions.

I am acutely aware that the measures in the recent supplementary budget have imposed a burden on people. The Government was guided by the principle that the burden had to be spread fairly, with those who could afford to contributing in accordance with their means. It was, therefore, incumbent on us in these Houses to play our part and, accordingly, the budget provided for changes in Members' remuneration. These measures included a 10% reduction in all expenses other than mileage rates, where a 25% reduction has already taken place and a provision whereby Oireachtas Members will no longer receive long service payments or increments. The arrangement whereby former Ministers are paid ministerial pensions while they are still Members of the Oireachtas will be discontinued.

This Bill provides the necessary statutory basis for the changes announced for long-service increments. Since the budget announcement in this regard, 45 Oireachtas Members have forgone increments that fell due. The budget date was taken as the date for the effective suspension of these increments and they ceased at that point.

The Bill also provides for the abolition of the current arrangement whereby former Ministers are paid ministerial pension while they are still Members of the Oireachtas or the European Parliament. I will be proposing an amendment to the Bill on Committee Stage that will enable me to provide for regulations for a composite expense allowance for Deputies and Senators, in lieu of existing allowances, as proposed by the Houses of the Oireachtas Commission. This is an enabling provision and I am of the view that Members need to consider these proposed changes further before any effect is given to it by regulation. In the interim the existing system of allowances will remain in place and I will be bringing forward the necessary regulations to reduce the majority of the Oireachtas expense allowances by 10%. A 25% reduction in travel rates has already been implemented. I will elaborate on this on Committee Stage.

While these measures are intended to effect savings on public expenditure, their financial impact will not be significant although they are a real contribution by Members as individuals and a signal that Members of both Houses are willing to give a lead in a time of great economic difficulty.

Section 1 defines "Act of 1938" as the Ministerial and Parliamentary Offices Act 1938. Section 2 provides that long-service increments will not be paid to Members who would normally have qualified for a long-service increment on or after 13 May 2009. So far, 45 Members have been affected by this provision. It also provides that long-service increments will not be paid to any Member of the Houses of the Oireachtas after the next general election.

Section 3 addresses pensions to former holders of ministerial and other offices. It concerns pensions awarded to officeholders under the old officeholders pensions scheme, those who qualified for such pensions before 13 January 1993 when the new officeholders pension scheme was introduced and who did not opt to join the new scheme. Officeholders are taoisigh, Ministers and Ministers of State. The section provides that between the passing of this Act and the next general election officeholder pensions paid to sitting Members of the Houses of the Oireachtas will be reduced by 25% and the pensions will cease to be paid to such Members after the next general election. In the case of Members of the European Parliament, the reduction will apply until the next European Parliament elections. Pensions will cease to be paid after that date for sitting Members.

Section 4 concerns pensions awarded to officeholders under the new officeholders pension scheme to persons who have three years or more of qualifying service. New scheme Members are those who first qualified for an officeholder's pension after 13 January 1993, when the new scheme came into effect. It also includes persons who had already qualified under the old scheme but who opted into the new scheme. These pensions are not paid until the person concerned reaches the age of 50 and the pension is reduced to a half while the former officeholder is sitting in either House of the Oireachtas or the European Parliament. The only exception is for former taoisigh, in which case, under the new scheme at present the pension is not reduced.

The section provides that between the passing of this Act and the next general election officeholder pensions paid to sitting Members of the Houses of the Oireachtas will be reduced by 25%. This provision is given effect by reducing the pensions by 62.5% rather than 50%. It also provides for a reduction of 25% in the pension paid to former taoisigh who are Members of the Houses of the Oireachtas or the European Parliament. At present, such a pension is not reduced.

The section also provides that the pensions will cease to be paid to such Members after the next general election. In the case of Members of the European Parliament, the reduction in the pension will apply until the next elections for the European Parliament and then the officeholder pensions will cease to be paid after that date.

Section 4 also provides for some technical amendments to the legislation by the renumbering existing provisions. Section 5 deals with ministerial, secretarial, minister of State and other officeholder pensions awarded under the new scheme to persons who have more than two but less than three years qualifying service. The qualifying period for officeholders' pensions was reduced from thee years to two in 2001. The provisions of section 5 are essentially the same as those in section 4 of the Bill. It provides that the officeholder pensions will cease to be paid to former Ministers who are sitting Members after the next relevant election. In the meantime, the pensions paid to such sitting Members will be reduced by 25%.

It is a matter of considerable public debate but the Attorney General advised the Government on the drafting of this legislation and the maximum possible reduction that can be effected on those with existing pensions. Section 6 of the Bill concerns the Short Title and collective citation. When it comes to politicians' pay, it is next to impossible to please. It has ever been thus and Ireland is not unique in this regard. By these measures, Members of the Oireachtas and the Government show our readiness to play our part in the national effort to restore this economy to health. I am sure other groups in the State will show similar readiness.

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Ceann Comhairle)
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Before calling Deputy Bruton, I remind the Minister for Finance that the Ceann Comhairle and the Leas-Cheann Comhairle also took a 10% reduction voluntarily.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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There is no doubt about the desirability of dealing with pay levels and allowances in the Oireachtas and having a system that is seen as fair is important. Fine Gael advocated that pensions payable to serving Members of the Oireachtas should be entirely abolished. I received a letter from the Minister indicating that he had received legal advice to say that this could not be done but no such advice was furnished. I then heard that the Minister had decided to cut the pensions by 25% but no legal advice was furnished on why he could cut them by 25% but not 100%. There is considerable confusion about the legal restraint on the Government implementing these changes. The legal advice indicates that a general election provides a threshold at which one can change because people knowingly enter a new contract. That is understandable but I am not clear how legal advice would suggest that 25% is allowable but 100% is not.

Some Members will be adversely affected by this and will look ruefully at how someone who served as a Minister can take up well-paid positions outside the House and continue to enjoy a pension, while those who continue in the House cannot do so. I understand how people see this as unfair but there is a sense of fairness in that one is continuing in the same profession.

The question arises of whether the Minister will apply similar rules throughout the public service. There must be clarity that one cannot draw a pension as a former teacher and continue teaching. There must be a level playing pitch. There is not much point in a system where people in the Oireachtas are paid on a basis that is seen to be fair and objective but not having rules that are consistently applied.

An issue of the pensionability of the long-service increment cut is raised, which the Minister does not appear to have dealt with in his address to the House. It would seem that an individual who retires at the next election will have his or her final salary based on a long-service increment but someone who runs in the next election and retires at the end of the following term will have his or her final pension based on a lower base. The issue raised relates to what is the final salary. There ought to be a level playing pitch for all Members of the Oireachtas and the Minister should not create fish of one and flesh of another.

While I am on this subject, I will ask about the reduction in ministerial pay, which is somewhat akin to the reduction in the long-service increment. Will the pension treatment of Ministers who have given up pay be on the same basis? There is no point in Ministers being able to have their pensions based on the full 100% pay which they did not take for a period while long-term pensionability for Deputies is on a base that is not similarly calculated. The Minister needs to ensure that treatment is equitable for various Members.

This brings me to another subject that I believe is a source of irritation for quite a number of Deputies who are members of parties. Some Deputies who are Independent Members receive what is described as a party leader's allowance, but unlike the party leader's allowance it is not vouched. There is no return of accounts to show that the allowance was used for purposes legitimately related to parliamentary activities. If we are dealing with anomalies, the situation whereby some Independent Deputies have €41,000 available to them each year, which can be built up and used for all types of advertising or election activities, again raises the issue of a level playing pitch. I recognise that Independent Deputies are entitled to access research support and legitimate matters related to their parliamentary duties. However, if we are to have such a system, in a new spirit of realism such moneys should be based on the presentation to an authority, presumably the Standards in Public Office Commission, SIPO, of the legitimate use to which that money has been put.

With regard to the regulatory powers which the Minister proposes to take to himself on Committee Stage, in principle there is no problem with this reform and most people will welcome it. I am not clear on whether he will implement in regulation decisions taken by the Oireachtas commission or whether he proposes to institute a system of allowances that he intends to implement. I have not seen the text of his amendment. It is in circulation but I have not seen it.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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It is enabling in character.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Is it enabling to the Minister or to the commission?

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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The Minister.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The structure of the legislation is that the Minister does it.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Yes, but is it-----

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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It simply enables the Minister to do something else that he or she cannot do-----

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I am not clear on whether it is on the recommendation of the commission or a power that the Minister has which he can exercise independently of the commission.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The commission made a proposal which cannot easily be facilitated in the current statutory framework so I am amending the statutory framework to enable me to consider the commission proposal.

12:00 pm

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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That is fair enough.

The other issue that is raised is the Minister's proposal to have a benchmarking process for higher paid people in the public service. I presume that Members of the Oireachtas are included in that process. The Minister has not really clarified in his presentation how that procedure is intended to operate. There was quite a degree of debate about the issue of how individuals would be benchmarked, particularly those in the high earnings brackets. On the previous occasion when there was a review of the remuneration of higher paid individuals in the public service, there was a rather strange system where an arbitrary assumption was made that the value of a public service pension to higher paid people was 15% when quite plainly the value to higher paid people is a great deal more than 15%. Some people estimate that the value of pensionability to senior people in the public service and Ministers would be in the order of 40%.

Recommendations were then made on what were supposed to be benchmarks of pay that ended up with our Ministers and Taoiseach being award pay levels that were several times higher than those in other jurisdictions, including in vastly larger and more complex states. We need to understand what is the benchmark generally with regard to higher paid people in the public service. How is it intended to create comparators? Who will make the key decisions on what are the relevant comparators? There is a legitimate belief that higher paid people in the public service, including ourselves, have enjoyed increases that were out of line with what occurred in the private sector.

The most recent review of higher remuneration - which the Government was going to implement only that the public outcry was so great - was not based on any serious benchmarking exercise against people with comparable responsibilities. We need to have an objective test for benchmarking exercises. I am interested to hear how the Minister intends that process to proceed generally with regard to people in the public service, particularly having regard to pensionability at a time when private sector pensions are under such stress, how will that be factored in and what are valid comparators in an exercise such as this.

I welcome the Bill as a first step. As I stated, as far as Fine Gael is concerned it has not gone far enough but I understand there are legal reasons for that not being possible and I look forward to hearing them. I am surprised that we have not heard them at this stage as I understood the Government also felt the Bill would go much further. It appears it proceeded along a route either without adequate legal advice at the time of the first decision or the legal advice changed at some point.

The one element we may live to question is whether removing increments from the salary structure of Deputies is a good thing. I understand that in the current situation it is an obvious target but increments seem to be a feature of pay systems. Fine Gael has taken the view that increments should be frozen throughout the public sector and not only for Deputies, but that is as a crisis measure and not as a long-term policy position. I am interested to hear the Minister's view on what he sees as the status of increments generally and why they are good in some walks of life but not in the political one. I say this not to oppose this in any way but to ensure we distinguish between what we might do in an emergency and what we might see as a long-term sensible structure for people who choose a career in politics. I do not want to use up much more of the time because it would be useful to have more than half an hour on the amendments. I welcome the Bill.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The Labour Party welcomes this Bill. In our submissions before the budget we called for clear reductions, particularly in the situation where former Ministers receive pensions while still Members of the Dáil. It is a pity the Minister had neither the political guts nor the capacity to introduce the reforms he promised with such grand rhetorical flourishes on budget day. On that day, he proposed that Members of the Oireachtas and Government would show leadership in a time of deep, national economic crisis by offering an appropriate level of sacrifice in respect of pay reductions, as was appropriate, particularly when they were asking many poorly paid people or people on poor pensions to take sacrifices. It is regrettable for the reputation of the Dáil that the Minister had not got political clearance from his party to bring in the reforms he so grandiloquently mentioned in his Budget Statement to a packed Chamber.

The Minister is aware that I and Deputy Gilmore contacted him on the matter of ministerial pensions. We did so some time ago and made arrangements to offer our ministerial pensions to the Government and that offer was accepted.

With regard to the new arrangements being made, the public is not generally aware that people who served in Government before 1993 got a full ministerial pension on exiting Government, no matter what age they were or no matter whether they left the Dáil or remained in it. They got a full ministerial pension from the day they ceased to hold ministerial office, provided they had sufficient service. It seems odd therefore that in the arrangements of this Bill the Minister has not yet been able to do away with that anomaly. When the Labour Party and Fianna Fáil were in Government after 1993, the arrangement thereafter - to which the Minister referred and which was much more sensible - was that the people who had the required service received a pension from the age of 55. They received the pension whether they were serving in the Dáil or not.

A sensible move was also made at that time to put in place transitional arrangements for people who lost their seats who would suffer a sudden severe loss of income. That was properly recognised and a sensible arrangement was made. Therefore, I find it odd that in this legislation the Minister does not switch everyone to the arrangement that was agreed by both the outgoing Government and the incoming Fianna Fáil-Labour Government at the time, namely, that persons who were entitled to a ministerial pension received it from the age of 55. I understand that the arrangement provided for in this Bill is that persons serving under the old system - probably six or seven current Members, including senior Fianna Fáil Members and a former Taoiseach - will, until the next Dáil get 75% of their pension. That is quite a high level, whereas others will -----

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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A former Taoiseach is in a different category under the 1993 arrangement.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Why is that? A former Taoiseach has a State car and some State protection.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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A former Taoiseach is in a different category by law.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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All right. Why did the Minister not move to make a uniform arrangement? Also, why did the Minister not return to the qualifying age of 55? It is essential to have transitional arrangements. I know from experience that losing a seat is a traumatic event. Many Members nowadays are full-time politicians, although there are Members who have businesses and other commitments and other sources of income. However, many Members do not. The transitional arrangements are generous and last for a period from 18 months to two years. Why, therefore, does the Minister not return to the qualifying age of 55 for pensions. What was the thinking behind the move to age 50?

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I did not make the move to age 50. That move was made in 2001.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I suggest that if the arrangements are being reformed now, the arrangements entered into by the Fianna Fáil-Labour Government in 1992 were sensible and fair. The Rainbow Government did not change those arrangements, but the Minister has said they were changed in 2001. I suggest they were simple, fair arrangements. Taking up the business of politics is risky and people can lose their seat at an election and have difficulty re-establishing themselves in another career. It is only right that should be acknowledged.

The Minister spoke about a 10% salary sacrifice by Ministers. Was that in respect of all their income as Deputies or was it just in respect of the ministerial allowance?

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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It was in respect of the aggregate income.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I might add that it applied to other office holders also.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I am aware the Leas-Cheann Comhairle and the Ceann Comhairle made that sacrifice. I and Deputy Gilmore offered our ministerial pensions to the Minister also and he accepted. The point is that in a time of such national difficulty this sense of leadership is required in the Oireachtas.

The issue of the salaries paid to other top people arose during and after the budget and the Minister promised a review process. The Labour Party stated in its pre-budget submission, and I agree, that there is no reason anybody paid out of the public purse should be paid more than €200,000, all included, expenses and everything else. The country cannot afford the level of salary being paid to the upper echelons, such as Secretary Generals and heads of various Government bodies. Neither can it afford some of the extraordinary salaries paid to people working in commercial semi-State bodies, not excluding RTE.

How can people benchmark such salaries with what is appropriate in times of such economic stringency and difficulty, where women are threatened with child benefit cuts and old aged pensioners have had their entitlement to a medical card altered? People will inevitably benchmark against the salaries of people who hold attractive, important and responsible jobs in the senior echelons of the public service. Therefore, the Minister should say whether he is of a mind to see members of Government formally reduce their salaries. As a consequence, people in the upper echelons of the public service, such as Secretaries General, also make an appropriate salary sacrifice that brings us down to a level of affordability that makes sense by comparison to what we know to be top salaries in other countries. I still do not understand why the Minister, Deputy Mary Harney, put consultants' basic salaries at about the €250,000 mark. I am not convinced that this country can afford that level of salary at this time.

With regard to the expenses regime as set out in the Minister's amendment, the Labour Party will accept the proposal, which I understand was put forward by the Houses of the Oireachtas Commission. Speaking as a former accountant, I believe it lacks one thing, which I pointed out to the Minister before. One way to reduce expenses is not only to set out a regime of expenses but to cap them. For example, with regard to mileage and other Deputies' expenses, Deputy Richard Bruton's annual claim for expenses is always in the modest range, as are the expenses attributed to the Minister, Deputy Brian Lenihan. Why not just set a cap on the total amount? Some expenses, for example, mileage, are at such a high level that Members must run up and down from one end of the country to the other - this applies in particular to some Members of the other House. I know some people live in very remote places and travel is expensive but, with the wider availability of public transport and the availability of good quality cars, it must be possible to work out, in conjunction with professional advice, what is a realistic charge for somebody's reckonable travel between Dublin and, for example, Cork, Galway or Kerry.

We should cap these expenses. The variation is very significant and, inevitably, when the media publicise Deputies' expenses, as is right and proper, the ones picked are always those at the absolute top end of the range, whereas the majority of Members of the House, and probably of the Seanad also, have relatively modest expenses. Some of the expenses claims, in mileage alone, are double the average industrial wage. This is what causes a difficulty in the public perception of what Members do in the Houses but it could be addressed. Expenses could be capped and I am sure a formula could be found where they reach a maximum at, for example, €25,000 or €35,000, depending on the distance one lives from Dublin. I have suggested this to the Minister previously because it would put a stop to the extraordinary figures that are quoted at times, but which probably only apply to a relatively small percentage of Members of both Houses.

Was the position of former taoisigh the subject of separate negotiation? The Minister might enlighten us again given that the transitional arrangements for former taoisigh are generous. Certain establishments are provided to them, such as Garda cars and drivers, which are not provided in other jurisdictions except for a period after holding office. Following that period, if a former Head of Government is attending a state function, he or she is supplied with appropriate transport. This is another area where, given the straitened times, savings could be made and it would not be to the discomfort of or cause danger to the former taoisigh. I wonder whether the arrangements arise from a more generous time when money was more freely available.

When the Minister has completed the comparative review of the salaries of top public servants, does he expect to publish it? We must remember that the salaries of such top officials influence the salaries of others such as bankers, whom the State is bailing out. We need to get a grip and insist that modesty or a slight retrenchment is the order of the day. When an bord snip nua presents its report, if the rumours are to be believed, it will be suggesting all sorts of reductions for people on very modest incomes. The Dáil must recognise this point.

The Labour Party welcomes this legislation. We would have preferred to see it taken in the same week as the Finance Bill because that would have given leadership. However, it is better late than never, although I would prefer if it was immediately implementable. There have been a variety of different legal opinions as to what was possible. If it is possible to cut the ministerial pension by 25%, why did the Minister not pick 35% or 55%? Was this on the basis of advice from the Attorney General? It might have been more appropriate to have sought a higher level of contribution.

It should be stated, as the Minister did, that of course all Members of the Dáil and Seanad are properly subject to the pension levy and are contributing all of the other extra taxes and levies, which is perhaps difficult for some people who have made commitments in line with their previous salary levels. Nonetheless, as some of those salary, pension and emolument levels were exceptionally high, there is a case for reducing them. The Minister might explain his thinking and the advice he received.

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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I welcome the opportunity to make a contribution on the Bill. Under its terms, ministerial pensions paid to serving Deputies, Senators and MEPs will be cut by 25% and will then be abolished completely after the next general election. For the rest of this Dáil term, instead of getting 50% as a pension, serving Members will get 37.5% - the poor things, we should really feel sorry for them. Does the Government want to give them a pat on the back? Should those people standing for hours in queues for social welfare congratulate these public representatives?

My issue with this Bill is why the pension is not being scrapped entirely. So what if there is a legal challenge? The Minister should face them down and take them on. As was said earlier by Deputy Bruton, while we have not seen the legal opinion the Minister received, it seems dubious. It would seem that those Members of the Oireachtas who are in receipt of the pension are coining it in anticipation of its complete abolition following the next general election. These pensions are, I suppose, a nice little earner so why would they want to give it up? I must qualify that comment by-----

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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Quite a number on all sides have given them up.

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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I want to acknowledge that there is legal provision for the pension and, therefore, those Deputies who are getting it are legally entitled to do so - I have no qualms about that whatsoever. I also highly commend those who have handed it back. However, those others who have not yet handed it back have a brass neck, in my view.

It is totally ironic that we are here, in the last week of this term, deliberating on a Bill aimed at cutting a meagre 25% from these ministerial pensions - this applies to Deputies and Senators who are already on very good salaries - when many workers nationwide have lost their pensions completely. It is ironic that the Government congratulates itself on its selflessness - if that is the correct word - to cut 25% off the pension when people who have paid pension contributions all their working lives find their pension benefits have dwindled. It is also ironic that workers of pension age, the most vulnerable time of life, may not be able to claim for pension funds while Members are able to claim Ministerial pensions while drawing a significant salary.

I hope the Minister will indicate if he believes the Bill represents leading by example. How can some elected representatives prioritise the recapitalisation of banks but do nothing as thousands of working people may end their lives in poverty despite having paid money to pension funds all their lives? This is not leading by example. Retaining any portion of a ministerial pension until the next general election is ludicrous. Whatever excuse these Members had to milk the cash cow while the Celtic tiger was roaring is long since gone. It is disgusting to latch onto these pensions at the height of a severe recession while 87,400 people have signed on the live register since January.

I hope some provision will be made to deal with the issue of teachers' pensions, a related matter. Although I accept that significant numbers have given up the right recently, many Members claim the teachers' pension while working here. It is obscene because in many cases they are obstructing the career paths of young teachers and preventing them from achieving their potential and from getting a full time job in the relevant school.

We have heard for some time of the commission's proposal to streamline the expenses issue, which is welcome. For whatever reason there is always a blast of publicity every January or early February when the Freedom of Information Act is used to find out Members' expenses. I have no qualms about the publication of this information at any stage but the Minister's proposal will probably streamline the process and I trust it will be more cost effective for the taxpayer. I look forward to the remainder of the debate on the Bill.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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I wish to share time with Deputy Shatter.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Is that agreed? Agreed.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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It is very important there is consistency with any Bill. Upon examination of the Bill it seems the pension of a former Taoiseach will be reduced to 75% whereas that of a former Minister will be only 37.5%, half of the former figure. There should be consistency and the same reduction should apply to any Member regardless of the office held in the past. A former Taoiseach is in a different position and there is an inconsistency in this regard.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The inconsistency was in place before this legislation.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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The perception of the public is that the inconsistency should not be there.

There should also be consistency for the higher paid in the public sector. Fine Gael proposed that full pension entitlement should be abolished for sitting Members but the Government has sought otherwise and plans to introduce a reduction of 25%. Will the Minister explain the legal basis for this? What legislation has determined this position? The key point is the Government is required to show consistency in terms of reductions for pension holders regardless of the office held. We await the amendments on Committee Stage from the Minister to see how the legislation will come into effect.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I am very conscious that making any public comment is like walking on glass in dealing with this legislation, whether from the Minister or any other Member. I have followed the debate from my office this morning and noted the careful contributions of all Deputies who have spoken thus far. Let us be honest about this matter. One reason people are careful about the way in which they address these issues is the public perception that Members are overpaid. This is a most unfair public perception given the hours Members devote to the work they carry out. For fear of opprobrium from the public and especially from members of the print media, Members lack the courage to defend their work and the hours they spend carrying it out.

My view is simple. The country is confronted by a major economic crisis. It behoves every Member to do his or her duty with regard to the salaries or allowances received and to ensure in so far as other sectors within the economy are experiencing reductions, that we reduce our remuneration in a manner that is appropriate and that takes account of the parlous state of the public finances. On a personal level I make no complaint about any impact of the imposition of the pension levy or any reductions that will result from the proposed legislation on myself or other colleagues in the House. It is important to consider what is taking place in a constructive and fair manner and to tease out the legislation in the same manner in which we would tease out legislation applicable outside the House.

An understanding of the motives of the Minister in introducing the legislation is important. There are elements of cowardice in the manner in which this is being dealt. I trust the Minister will not interpret this as a personal charge against him and it is not so intended. However, it is a charge that could be levelled against the Government, a political charge based on two or three aspects of the legislation and what I interpret as the politics of it.

I have listened with great interest to the remarks on ministerial pensions and constitutional issues. It is easy for me to comment on these issues because I am not the happy recipient of a ministerial pension and I need not make a declaration of interest. However, it is unfathomable that the Minister's legislation seeks to reduce the ministerial pensions of sitting Deputies by 25% on the basis of some advice on constitutional issues which suggests he cannot interfere with them at all. This is a complete shibboleths and a total nonsense. Either there is a constitutional reason not to interfere with pensions, period, and the 25% reduction or any reduction of the Taosieach's pension is unconstitutional, or one can interfere with the pensions and there is no constitutional issue.

There is clear evidence of political cowardice because it seems there are those in receipt of ministerial pensions who have no difficulty in terminating receipt of those pensions on the Opposition side of the House. Some have done so already and I understand some have indicated they would do so if the multiple members of Fianna Fáil sitting on the benches opposite were willing to voluntarily set aside their ministerial pensions for the lifetime of this Dáil. There is political cowardice because the Taoiseach and the Minister for Finance have not told the Fianna Fáil Members on the backbenches who are former Ministers that former Ministers have an obligation to set an example for the rest of the country and this is the political decision they are being asked to accept.

That would have allowed the Minister to leave aside the niceties of legislation or constitutional issues and he would not have had to introduce this Bill at all because there would have been a consistent voluntary agreement. If the Minister had introduced a measure which either reduced to a greater extent the ministerial pensions of sitting Deputies who are not currently Ministers, or if he had terminated them entirely with perhaps a lead-in period to allow people adjust, which Members would have launched a constitutional action? Are there former Fianna Fáil Ministers sitting quietly on the benches supporting the Government who have indicated they would withdraw support or launch a constitutional action if their pensions are abolished? I do not believe there is a single Member of the House who would do this. It would create a very interesting political predicament for members of Government if, for example, Deputy Woods - I am not suggesting he would do so - or Deputy O'Rourke, who has given up her ministerial pension in fairness to her, launched a constitutional challenge. I do not believe this will happen as this is where the political cowardice lies. People outside this House find it incomprehensible that former Ministers who are still Members of this House in receipt of a Dáil salary are also in receipt of a pension as former Ministers.

I wish to raise a matter which I find quite odd in the legislation and if I am incorrect I know the Minister will correct me. Deputy Bruton has already made some comment on the issue of increments. In this context I declare an interest as someone who has been a Member of the House for 23 years, and together with many other Deputies I am at the higher end of the incremental scale. If I run in the next election with the knowledge that my increments are to be taken away from me, that is a voluntary decision I will make. If I am committed to public service and I wish to continue to be a Member of this House - which at this time I would wish to be, although I would like to be a Member with Fine Gael in Government and the procedures of the House reformed - increments will not remotely influence my decision to run in the next election.

There is one aspect which is extremely odd. I wonder what legal advice the Minister has received in the realm of constitutional law and legitimate expectation. It seems there is built into this legislation a direct incentive which in my view is also an ageist provision which is designed to discourage Members of this House who have long service, who have been here for 21 years or longer, or who are perhaps hitting the ages of 60 or 70, from running again. My perspective and understanding of the legislation is that if I as a Deputy - I have no intention of doing this, just in case the Minister or any of my constituency colleagues might think I have - decided to retire at the next election I would have a pension at a particular level. Of course in Dublin South we are committed to re-electing three Fine Gael TDs in the next election and I am looking forward to achieving this. If, however, I ran in the next election and were unfortunate enough not to be re-elected, I would be financially better off pension-wise than should I run in the next election, be re-elected and then six months' later if there is another election, I lost my seat. There is a whole series of Deputies on the Fianna Fáil backbenches-----

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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That could be a likely contingency if the Deputy were to get into Government.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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-----with long service who may not realise that should they be fortunate enough - there will not be that many of them - to be-----

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I will deal with that in my reply.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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-----re-elected in the next election and, if there is an election in close proximity thereafter, lose their seats, their pensions for ever more will be substantially reduced until the day they die and so will the pensions of any widow or widower who survives them. I do not believe anyone in the public or private sector would agree to that type of provision. I am not making a complaint for myself as fortuitously I have income from other sources. However, other Members of this House do not have incomes from other sources and in respect of whom this provision will have a very substantial impact. We should not have within our legislation a provision designed to discourage people from standing for democratic election in the future. That is entirely wrong.

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Fine Gael)
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I feel somewhat like Deputy Michael Ring giving way to Deputy George Lee for his maiden speech to the House but it is always a pleasure to follow Deputy Shatter.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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It is wonderful to be still described as a maiden.

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Fine Gael)
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This is an important Bill in the context of the current economic crisis. There is a demand and an expectation for leadership from both Government and Opposition and from all elected public representatives. They will be expected to lead the charge in efforts to bring the public finances under control and to take the pain and a hit in what are very difficult times. This is particularly relevant in the context of what has been happening in the private sector for the past year where people are not discussing taking cuts of 10% or 25% in their pay because the situation is much more serious in that sector. We are all aware from our constituency work that people are losing their jobs.

There is an air of unreality connected to certain elements of the trade unions and particularly to certain elements of the public sector. We must show leadership as elected representatives. The challenge for the Minister in the coming months will be the figure of €20 billion which is the cost of running the public services and which is not sustainable. We all have to take our hit and share the pain. Public spending has to be dramatically reduced and we have to play our part in this cut.

The wider debate about politicians' salaries and expenses has to come with a health warning. A media campaign has been driven by sensationalism and populism in this regard. Politicians are probably the easiest targets for the media. There seems to be a constant stream of freedom of information questions on a monthly basis to the Houses of the Oireachtas Commission. The same figures are published repeatedly and yet they manage to make headlines every time. I would recommend to the Minister and to the Houses of the Oireachtas Commission that these figures should be published as a matter of course. We should not allow these figures to become front page headlines. We should be transparent with our information and show the public our expenses, what we are claiming and the reasons for the claims. I have no problem in doing so and I make a point of publishing that information in my constituency.

I welcomed the Minister's announcement that ministerial pensions would be scrapped for serving TDs. In my view, however, we need to go further. No Member of the Oireachtas should be in receipt of a public pension, whether he or she is a teacher or from any other profession. It is well known by everyone that we are paid very handsomely as Members of the Oireachtas. We should take a strong stance on the issue of pensions.

I am aware of the legal advice from the Attorney General with regard to the constitutionality of abolishing the pensions. I concur with the point made by Deputy Shatter. I do not see the consistency in allowing for a 25% reduction and yet saying a reduction of 100% would be considered unconstitutional or open to a constitutional challenge. I am not convinced by the argument, although the Minister will have a view. We should be serious about this issue and about restoring public confidence in the work of the Houses of the Oireachtas. Most Members work hard and work long hours, weekends and holidays. The perception is that we take off for three months in the summer. We all know that is fallacious but we must stand up and be counted in that regard. We must show leadership by leading from the front but we also must challenge many of the myths that surround the media reporting and the coverage of the work we do here and the way we are remunerated for that work.

We should be in a position to carry out the work we must do in our constituencies and we should not be constrained in that. Not so long ago politicians here were very badly paid and it was difficult for people who did not have a wealthy background and the resources to be elected to this House or Seanad Éireann. It is extremely important that financial obstacles do not create barriers for people entering elected politics.

We cannot allow politics to become the preserve of the rich. There are many people in the media who would love to go back to the days when politics was a part-time hobby for some very wealthy people. That would not be fair to society, would lead to this House becoming much less representative of ordinary society and reduce people's choices in terms of having a wide spectrum of people before them on the ballot paper with a realistic prospect of getting elected to this House.

I do not want politics to become the preserve of the rich and in that regard I welcome the Minister's initiative. I am aware it has not been finalised yet but I welcome his initiative in trying to sort out the quagmire that is the expenses here in this House and in Seanad Éireann. I wish him well with that task. It is not an easy one but we must have transparency and accountability in the expenses system, and we must be in a position also to run our political operations in our constituencies. There is a fine line in that regard and it will be a balancing act but the way to achieve it is probably through the proposal for a parliamentary allowance that Deputies and Senators can use to carry out their constituency work. That is probably the fairest and most transparent way to go about it, and it should be published. That is my last appeal to the Minister. He should publish it and make it available on the Internet to whoever wants to check it out, but please do not allow the system to continue with journalists who seem to have not much else to do other than submitting freedom of information requests and then sensationalising the whole process. We should be transparent about it.

Photo of Seán PowerSeán Power (Kildare South, Fianna Fail)
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I listened attentively to the contributions made and, in general, I believe Members support what we are doing. I listened in particular to the point Deputy Shatter made on the pensions, which I suppose is a shortcoming, but in the current climate we are living in there are very few Members in the House who would complain in that regard.

In recent times our pay and expenses have come under major scrutiny from the press and much of what was written was misinformed in many respects but as Deputy Creighton said, it is important that we have a system that is transparent and accountable. We saw the recent goings on across the water where a different system is in place but one that has done politics a great deal of damage. It is important we do not allow that type of system develop here.

What is being proposed appears to have support from all parties. When it comes to issues like pay and expenses it is important that there is one voice on it. Whether one is a member of Fianna Fáil, Fine Gael, Labour or Sinn Féin, we would all agree it is important that the pay that goes with the job must be attractive enough to encourage people to come into the House and work here. We must ensure we attract a good cross-section of people, whether they are from the business sector or elsewhere, and that the 166 people elected here are representative of the country. That could be tradespeople, people in business, teaching or sport but it is important that they are from many fields.

I am aware many Members have come under a great deal of pressure recently and almost felt it necessary to offer a reduction in their salary, expenses, pension or whatever because someone in the constituency or from another party was doing that. I am glad we are dealing with the issue in a more mature way here in the House today.

The downturn in the economy has placed enormous pressures on people. Many of those fortunate enough to be in employment will have taken reductions in their take-home pay, be it a reduction in their salary, levies that have been introduced or other taxes. There are very few people in a better position financially today than they were 12 months ago.

Those of us who are Members of this House are in an honoured position. Very few people get the opportunity to represent their people. While being elected here is a great honour, it also brings with it great responsibilities and on the area of pay in particular it was important that we should show leadership.

I compliment the Taoiseach and the Government on the initiative they took in the budget of 14 October when Ministers decided to take a reduction in their salary, and the further moves that have been made since. They have provided leadership and shown the people that we are not just asking the rest of the public to make sacrifices unless we are prepared to make them ourselves. The reduction in the numbers of Ministers of State was a further indication of the change we were prepared to make and that we were not asking the public to take something we were not prepared to take ourselves.

The measures we have introduced in recent months have meant a significant reduction in the take-home salary of all Members in the House. It is fitting that should be so but we must strike a balance while ensuring that the salary is attractive enough to attract good people into the House, and that will always be the way.

I welcome the move and acknowledge the mature way it has been approached by all parties. The cross-party approach is the best way to deal with what is a delicate issue. I compliment everyone involved and wish the Minister well in his efforts.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I welcome the principle of the Bill but want to make a few comments on it, and it is important they are made at this stage.

As all Members will be aware, the public is taking a great deal of pain in terms of pension levies and pay cuts in the private sector, pension levies in the public sector and tax increases imposed by the Government, and there will be further tax increases imposed in future budgets, perhaps not income tax increases but there will be other tax increases. On that basis it is important that politicians set an example and not only take reductions but take reductions greater than those being imposed on people who are not Members of this House.

I am critical of the way the Government has handled this issue in general. In reality there have been significant reductions in pay and expenses. There has been the voluntary surrender by the Ministers and by many Members of this House. The number of junior Ministers has been cut by 25%; expenses have been cut by 10%; and the paid committee positions have been abolished. This could have been done in a more effective way. It appears to the public that these changes were dragged out of the Government, forced on it by the media and made under duress. That is the real failure. Had the Government announced this full package of measures last November, before the other cuts were introduced, politicians and the Government would have much more credibility.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I can tell the Deputy this is the hardest curve of all to get ahead of.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I appreciate that. That is fair comment. The public and the media do not believe or understand the level of cutbacks and reductions which have been imposed on Members of the House. It is right that the cuts were made but they should have been made up-front and in a big package. Announcements were made in the emergency budget but there was a perception that they were not implemented. In fact, some of them have not been implemented yet. I do not know why that is but I assume they will be implemented shortly.

The Minister has made the right decision with regard to long service increments. Nevertheless, there is a certain unfairness in the fact that Members with many years service will receive the same pay level as others. In all areas of the public and private sectors people who have a degree of service are paid more. There is an unfairness in someone who has been in the House 20 years longer than me being paid the same as me. That is not entirely fair. However, having abolished long service increments, I hope the Minister will consider doing something similar across the board. If Deputies are no longer entitled to receive long service increments, I do not understand why Secretaries General, deputy Secretaries General and principal officers should receive them. Perhaps the Minister might explain why a different rule will be applied to other public servants who earn the same as us or more. I accept that long service increments are being abolished but why only for Oireachtas Members?

The Attorney General's advice regarding the 25% reduction in pensions has not been published. I accept that it is not standard practice to publish the advice of the Attorney General. However, a suspicious mind may think suspiciously. I wonder if the reduction is 25% and not 50% because a 50% reduction would leave certain Members, particularly of Government parties, better off if the Dáil were to collapse. Take the example of a Deputy who earns more than €100,000, has a long service increment of €10,000 and a half ministerial pension of €30,000. He or she would receive a pension of €70,000 while his or her basic salary, minus the pension levy, is not much more than that. If the Minister had reduced pensions for sitting Members by 50%, would a number of his own backbenchers have decided they would be better off if the Dáil were to fall sooner rather than later and would have found an issue of principle on which to vote against the Government. Is that why the reduction is 25% and not 50%?

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I have had no such intimations from any Government Deputy.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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The Minister should look at my figures. There is no financial advantage in the Dáil collapsing if the pension is reduced by 25%. If it were 50%, a number of former Ministers on the Government back benches who are quite critical of the Government - I can think of two, in particular - would have been better off were the Dáil to collapse. This will not now be the case as the reduction will be only 25% and the abolition of the long service increment will be delayed until the next Dáil.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am very supportive of former officeholders.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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The former officeholders are not very supportive of the current officeholders.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The ones with pensions are.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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My point regarding the payment of long service increments to public servants who are paid more than Deputies also applies to the dual payment of public sector pensions. Deputies and Senators are not the only people on the Government payroll who also receive a pension. Many people in well paid positions at the head of State agencies and boards have retired from the Army, the Garda and other areas and are in receipt of both a substantial public service pension and a substantial public service salary. If Deputies in the next Dáil are no longer able to benefit from that arrangement, should the same arrangement not apply across the board? I accept the need for this measure. Politicians must show example and impose greater cuts on ourselves than on others. However, the Oireachtas costs are 0.2% of the entire budget and these changes mean nothing if they are not followed through across the public service. The measures being introduced by the Minister should be imposed across the board on those who earn salaries equivalent to that of a Senator or higher. That seems to me to be fair and I would be interested to hear the Minister's comments in this regard.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Fine Gael)
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It is very interesting to listen to people with different views.

There are two types of public representatives. One is full-time and works on a full-time basis and at nothing else. The other works part-time. The Minister is endeavouring to pay both the same salary. A Deputy who goes to the Law Library or who has a medical practice is paid as though he were a full-time politician. Are farmers full-time politicians? If one is trying to attract people into politics to act on a full-time basis one must take into account the role of a public representative. In the Oireachtas there is a variety of people, some of whom are full-time. As one coming to the end of my political career, I think this is a retrograde step to introduce harsh measures while failing to distinguish between a full-time and part-time public representative.

I listened to Deputy Varadkar. Other people in this House are getting public service pensions, which they will continue to receive. Should farmers cease to be entitled to EU grants because they are public representatives? Should doctors who are public representatives not receive payment for GMS patients?

I was a Whip when Members were on the verge of bankruptcy after three general elections. We fought for a situation which would not allow for the possibility of people taking backhanders for doing their job. We established a system of paying Oireachtas Members a proper salary linked to a certain public service grade so that a Deputy received an increase if the equivalent public service grade received one. If the public servant has to pay a levy the Deputy pays a levy. That is how it is and that it how is should be left.

With regard to the long service increment, there is no profession in the world which pays someone who has been doing a job for 30 years the same as someone who joined two years ago. What will happen to existing pensioners who had a long service increment and receive 50% of a Deputy's salary. Will they be docked €3,000? A Deputy whose salary, with a ten year long service increment, is €106,000 would be entitled to a pension of €53,000. If the long service increment is removed will the pension be correspondingly reduced to €53,000? The Minister is nodding his head but this does not make sense. Will the pension be 50% of a previous salary or not? The legislation makes no provision for situations such as this.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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That is dealt with in the pension section.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Fine Gael)
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The Minister's family has been a long time in politics. There are many widows who served as unpaid secretaries to their husbands, long before there were secretaries in this House. They answered telephone calls late into the night and acted as secretaries at home and got no income. Is a widow on a maximum pension of €25,000 well paid? Are we serious about attracting people into giving their lives to full-time politics or will we revert to the days of part-time politicians? The latter will occur.

I am in receipt of a ministerial salary. If the legislation says I do not have it, then I do not have it, but let us be frank and honest about why it was introduced. Many people, although not necessarily Fianna Fáil Members, served as Front Bench spokespersons in the House for many years, including myself. A Front Bench spokesperson does not get any extra pay. The original idea was that a Minister who went into opposition would, more than likely, be a Front Bench spokesperson and should get an income to supplement his or her salary. Ministerial pensions derived from this idea, but there is still no extra remuneration for a Front Bench spokesperson whose job is to produce policy, review legislation, travel the country and meet various groups. Spokespersons get the same salaries as backbenchers. This matter has never been considered fully because we have never had the guts to hold a proper debate. We run away because the media starts writing.

In 1993, we decided that serving Members would get only 50% of their ministerial pensions if they became Ministers after 1993. This fact has never been made clear in the media. Other speakers referred to the constitutionality of abolishing pensions. It is my understanding that, once one has paid for something and worked under certain conditions, removing anything is difficult. It is not being made clear that people contributed towards their ministerial pensions. It is not the fault of the Deputies or the Minister that the contribution level may not be sufficient, but a deduction was made for the pension on certain conditions. For this reason, the 1993 changes were implemented in respect of new Ministers who entered into their positions on the clear understanding of these conditions of employment, namely, a 50% pension, despite a similar deduction being made.

Let us be clear about the facts. It is time for an overall review of the role of the public representative, be he or she full-time or part-time. For example, is a Front Bench spokesperson in a senior and responsible position to get the same salary as someone who has been elected for only one month? I accept that whatever must be, must be, but let us consider the future, what type of people will be attracted into politics and whether they will hold full-time positions.

Let us also remember that politics is like no other job or profession, as there is no guarantee of employment. One is not even guaranteed a full term. It could be one year, five years or, as occurred in the 1981-82 period when there were three elections, three months. There is no guarantee of continuity. Will we ask people to give up their positions in life to enter the Houses as full politicians without paying them? Will we revert to a stage where people will be tempted to take inducements? Let us bring everything into the open. As revealed recently, people in Britain did not have the guts to make the necessary changes and pay proper salaries. Instead, on a nod and a wink, people filled in forms to claim, for example, second home allowances worth €24,000 to which no one was supposed to pay any attention. Consequently, confidence in the public system has collapsed. I do not want a similar situation to obtain in this State. People should be paid.

A previous speaker stated that, when we get expenses, they should be published. People should not need to make freedom of information applications. I can stand over any of my claims for expenses. Let the publication of expenses be automatic. Let people know for what they are voting, namely, what their representatives will get and what conditions of employment they will have. Let people wishing to stand know those conditions as well.

A mistake has been made in changing the ordinary pension conditions for Deputies. As and from the last election, new Members will not qualify for pensions until they are 65 years of age. This is daft. If someone becomes a Deputy at 30 or 32 years of age, spends 25 years in the House, fights four or five elections and is unfortunate enough to lose his or her seat or believes he or she has fulfilled a purpose and leaves, he or she will get nothing until reaching the age of 65 years. This is madness.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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That is not true.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Fine Gael)
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It is a question of rushing through provisions. The Minister can check, as I am certain that I am correct. There will be a large gap. If he or she dies, what will happen to the surviving spouse and children? Who will look after them? As Chief Whips have dealings with many people, I knew plenty of widows who were on the verge of starvation because their husbands served as Deputies. They were left with minuscule pensions and were too proud to seek other assistance. These are facts.

There is a notion that public representatives are ripping off the system and getting paid plenty. That is not true. I am interested in the truth and the facts, which clearly show that the maximum pension a widow or widower can get under the new system is €25,000 per year. The maximum salary will be €100,000. If one serves 20 or more years, one can get 50% of that amount as a pension, but a widow or widower can get only 50% of that €50,000. Therefore, the maximum pension that a widow or widower can get is €25,000.

Since we are assuming that people will be full-time public representatives, no other income or pensions will go to the widows or widowers. Those who lose their seats at 50 or 55 years of age cannot claim jobseekers' benefit.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The widow or widower will always get a pension in those circumstances.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Fine Gael)
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Is that to be ex gratia?

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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No. The age restriction does not apply in the event of the death of the Member. The pension is payable to the widow or widower.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Fine Gael)
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At whatever age. It is a small amount of money in today's world. The idea that people will either leave the House rich or that their spouses and dependent children will be cared for is inaccurate. From this debate, I would like-----

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I am loth to interrupt the Deputy, but I will need to call the Minister in five minutes' time. I call on Deputy Tom Hayes to make a brief contribution.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Fine Gael)
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I will conclude, as I would like to let Deputy Tom Hayes contribute.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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I welcome this opportunity to discuss the Bill. Where politicians are concerned, nothing has taken up as much space on the airwaves or column inches in the print media as pay. Every Deputy wants to be open and fair. The main issue is the lack of understanding on the part of the public and the media about how politicians accrue expenses. Deputy Barrett illustrated the issue of pensions very well. The media and public do not understand the cost of running a modern political set-up in a constituency. In some rural areas, Members have two or three constituency offices, which cost money. The Minister may laugh but there are Members of the Dáil with two or three constituency offices, some of whom are in his party and others who are in my party. The offices represent a very significant cost and burden.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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Three offices?

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Some have two and others have three; that is the reality. The offices may not be open full-time but people come to them in these difficult times with various problems that must be solved.

I set up an office here when I started in Leinster House. I needed this office but, because of the demands on Members, I had to open offices in my constituency to serve people. Their cost must be considered but this is not understood. It is not understood that, when a Member is away from home, he is entitled to an overnight allowance and travel expenses. People do not understand that and believe we put the allowances in our pockets. We all have to have extra cars and ways of getting around, as the case may be.

The real issue, in respect of which Deputy Barrett mentioned a review, is that we should make an effort in this House to address these matters because we are doing damage to ourselves. There are people who will opt for the populist line at all times but it must be remembered that, by doing so, we are doing damage to the body politic. None of us wants his or her family to be embarrassed or to have headlines stating who is on top of published tables of expenses. With regard to freedom of information, there are humans behind the statistics; there are children and spouses. The highlighting by the media of the circumstances of a married couple in this House was grossly unfair. As politicians we should stand together and explain to the media and public what we do. They do not understand. When there is a review of politicians' pay, pensions and increments, as Deputy Barrett called for, the House should, as one unit, explain to the people that we are not trying to pocket the money. As Members have said, one does not get rich in here. One does one's job and one does it as best one can. There are many committed Members in the House trying to do so.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I will try to assist the House as much as I can by going through each Member's contribution rather than delivering a general reply. Deputy Bruton commenced the debate by referring to legal advice and his comments were echoed by several Members. The position is that the Attorney General advised that removing the pensions from current sitting Members was vulnerable to constitutional challenge but that a reduction following consultation with the Members would be possible. That is why the relevant Members were written to in that regard. The Government, having considered such correspondence as was received, decided a proportionate reduction of 25% would be possible.

All the interventions of Deputies were useful. Deputies Barrett and Burton illustrated the character of the legal problem involved. When the 1993 scheme was introduced, those who were Members theretofore were not transferred compulsorily but given an option to transfer. The legislation dates from the 1940s. The Attorney General was satisfied that it was possible to make a reduction but that if a percentage were exceeded, it would not constitute a reduction but an actual extinguishment or abolition of the expectation or right in question. For this reason, he advised the Government that a ceiling should apply to any reduction that could be effected in the case of a sitting Member.

Statutory practice in this matter indicates that when the 1993 scheme was introduced, Members on the old scheme, whereby the pension was payable irrespective of age, were allowed to opt into the 1993 scheme or remain in the one they were in. The Attorney General advised that we face grave economic circumstances and that the Government is entitled to make reductions as a consequence, but that it cannot single out one class for a reduction that amounts to an abolition of their rights. This advice flows from the circumstances that obtained the 1990s, as outlined by Deputies Barrett and Burton.

The pensionability of any increment that has already been earned by Deputies, which was raised by a number of Members, is not dealt with in this legislation. It is a matter for the relevant pension scheme. Deputies Shatter and Bruton made the point that there would not be a level playing field in the next election if a Deputy were aware of the fact that, by contesting the election, he or she would lose an accrued pensionable entitlement. Therefore, it is my intention in revising the appropriate schemes to preserve the increment, if earned before budget day, in so far as the pension in concerned. Otherwise, the rights of widows and those who survive a deceased Member in receipt of a pension would be entrenched. This issue will be addressed.

With regard to the review body on higher pay, I welcome very much the comments of Deputy Burton. I agree with her that if we are to consider very substantial economic adjustment, leadership must clearly come from the top. This is why I announced, in the supplementary budget, that we needed a commission on higher level pay. It will examine the pay of senior public servants and also the pay of Ministers.

The key point Deputies Burton and Bruton raised in this regard focused on the basis of comparison. One difficulty with earlier review groups on higher remuneration was that they compared public salaries exclusively to those in the private sector. I have amended the terms of reference on this occasion to ensure comparison to comparable jurisdictions in the eurozone and the United Kingdom.

Deputies and Senators are now within the scope of the review group because there has been for a number of a years a linkage between the salary of a Deputy and that of a principal officer in the public service. I was very determined to preserve this arrangement in the legislation because it is the correct one regarding the determination of Deputies' pay. I would like a similar arrangement put in place-----

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Will principal officers lose their increments also?

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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When Deputies were linked to principal officers, the link was established at the highest level of principal officer pay. In other words, a principal officer would have to earn all his increments to have the basic salary of a Deputy. On the issue of having increments for Deputies, I examined the papers in my Department and noted a very scanty submission underlying the change in this regard earlier in the decade. It is not constitutionally correct for Deputies to have increments. They are different from all other public servants in this regard. We are here at the pleasure of the people and a Deputy who is elected for a few weeks has the same standing as a Deputy who is here for 20 years. That is the nature of this House and the basic salary arrangement should reflect that point.

I take Deputy Barrett's very fair point that we may have to consider in the medium term the circumstances of Front Bench spokespersons in Opposition parties. We will not be able to examine them during the current crisis. However, it is not justifiable to say that because one is a Member for a number of years, one should earn an increment. Deputies are in a different position from any other member of the public service in this regard. There is no presumption that we should be here for a given number of years; it is entirely a matter for the electorate to determine when given the opportunity to do so.

We are linked to the principal officer grade. If financial adjustments are required to that grade in the course of what we have to do in the next year it will affect Deputies. However, it means Deputies are in the same position as a definite grade in the public service and that is appropriate. I hope there is all-Party agreement to stick to that because it is a good arrangement. If anything, I would like to see it extended to Government Ministers and Ministers of State because that would help to remove the matter from controversy.

Comments were made by various Deputies about our workload. It is a very substantial burden and any principal officer in the public service will accept that any Deputy, of whatever stripe, has to work a lot harder than a principal officer and cannot rely on any hours-of-work legislation in the performance of his or her duties.

The review group will look at comparisons with other countries. Deputy Bruton asked about the party leaders' allowances and payment to Independents and there is an issue in that regard, which I will examine. The Oireachtas Commission has submitted proposals to me and there is a legal basis for the implementation of those in the amendment which, regrettably, we will not discuss now.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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There will be half an hour for Committee Stage.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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If I can close my remarks there might be an opportunity to discuss it.

Deputy Burton raised a number of important points. The position relating to former Taoisigh is unique. One currently serves in the House and there are another four who have retired from the House. The position of a former Taoiseach is unique and a former Taoiseach has always been paid a full pension with no reduction. In that sense there is consistency, despite Deputy O'Donnell's suggestion that there was inconsistency in the treatment of different individuals. There is a 25% reduction for everybody, whether a former Taoiseach or a former Minister.

The age limit of 55 was reduced to 50 in 2001. I have not looked at that issue afresh, although Deputy Burton suggests we should do so. I take into account what she said about the expenses regime. I would welcome her comments on top-level salaries as there are issues to address in that regard. I have told the review group to complete its work with the greatest possible speed.

In the old scheme there was no age limit. In the new scheme it was 55 from 1993 to 2001. After 2001 it was 50 and since 2004 it has been 65, a point to which Deputy Barrett drew attention. It does not affect the position of a widow, for whom no age limit applies, but it could affect Members who gave long service but lost their seats in their 50s.

Deputy Morgan made a point about legal challenges. Governments have to act on the advice of the Attorney General. A lot of legal opinions are expressed nowadays but at all stages before and since the budget the advice of the Attorney General has been consistent and he has always maintained that issues would arise from the implementation of any decision to abolish pensions or increments. We acted within the legal constraints that applied to us.

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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I was only asking for the Minister to summarise. I accept that he has done so.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I appreciate that, Deputy. Deputy O'Donnell also asked the question and Deputy Shatter addressed the legal issues.

Deputy Bruton asked about increments in the public service generally but they do not arise in this legislation. Fine Gael has consistently advocated that increments be frozen in the public service. Typically, increments in the public service are earned by the lower grades quite rapidly and amount to a substantial increase in their remuneration as they progress. We looked at this issue when preparing the pension levy earlier in the year and found there would be arbitrary effects to freezing increments in that people doing like work would not receive like remuneration. For that reason we felt the pension arrangement was fairer.

The position of Deputies and Senators is unique in the public sector and I do not believe there is, in principle, a case for the payment of an increment simply on the basis of length of service. In pension schemes I will respect those increments which have been earned by Members.

Deputy Creighton referred to the salary reductions taken by different individuals within the community. The average imposition made by the pension levy in the public sector is of the order of 6.8%. The forecast of the EU for this year is for a reduction of between 4% and 5% in payroll levels. Of course, in some firms there have been reductions very much in excess of that and in some of the sheltered sectors there have been pay increases. There is a much wider spectrum in the private than in the public sector.

I take issue with one point made by Deputies Creighton and Barrett to the effect that there was an age in Ireland when politics were the preserve of the wealthy. Salaries were very poor in this House for many years and the House was not dominated in any sense by wealthy people. Back in the 19th century, when we had to send people to another Parliament in London, Members of Parliament for Irish constituencies who represented the national interest in the old Home Rule Party had no remuneration at all. Many went to London at considerable personal expense and lived in circumstances of near destitution while earning no pensions. We do not acknowledge that fact often enough in this House. We commemorated the First Dáil this year and we should also acknowledge those who represented the national interest elsewhere, many of whom lived in garrets to attend meetings of the House of Commons.

The idea of paying public representatives was introduced by the political left and was designed to give people the freedom to act in the public interest, which is fundamental and very important. However, in the various Dáileanna since 1919 there have been a large number of individuals who had to lead a very restricted lifestyle and the House was not noteworthy for many persons of substantial wealth. In fact, most Members were very poor and that has been the case for many years. The former Minister and current EU Commissioner, Mr. Charlie McCreevy, did a good day's work for politics in ensuring a reasonable level of remuneration. Nevertheless, we must look at some of the excesses that developed in recent years and trim them.

I feel I have dealt with most of the questions put by Deputies during the course of the debate.

Question put and agreed to.