Richard Bruton (Dublin North Central, Fine Gael)
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I move:

That Dáil Éireann calls on the Government to introduce legislation to cause, with immediate effect, the cessation of the payment of Ministerial pensions to members of both Houses of the Oireachtas.

I would like to share my time with Deputies O'Donnell, Bannon and Deenihan.

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

Richard Bruton (Dublin North Central, Fine Gael)
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I move this motion because I believe sincerely that politics is on trial in this country at the moment. These are not ordinary times by any stretch of the imagination. In the past 18 months, 250,000 jobs have been lost. Well over 25% of everything we spend is borrowed money. Many young families bought houses at the peak of the market and they are now struggling just to survive. We are seeing people's worlds being turned upside down. People look on and they ask what role politics can play in dealing with this problem. Sadly, many of them have lost faith in the idea that politics can become part of the solution to problems of this scale. Instead, they see a self-absorbed system that does not seem to be in touch with the problems facing ordinary people. That is a dangerous development for our political system. If people do not see leadership coming from the political arena, it is very difficult to have the sort of transformational change this country needs.

Many of our problems today have come as a result of a catastrophic fall in national income. There are different ways in which we can deal with such a catastrophic fall. One way is for people who are strong enough and privileged enough to circle the wagons and defend their rights and privileges. The loss of 25% of our income will be taken from those who are weak and vulnerable, such as those who have lost their jobs, young people coming out of college, people sinking into negative equity and debt repossession, old and sick people who hope to get services in hospitals but find they do not exist. That is quite a credible line. Many people will look at what has happened in this country and the first instinct will be to defend their privilege and their ground. However, if the strong do that, the weak in our community lose out.

Let us be honest with ourselves. Politicians are among the strong in our community. We make the rules. We make the rules about pensions for former Ministers and we make the rules about pay levels. There are few groups as privileged as politicians in being able to defend our turf from being undermined in this time of crisis. This debate is about whether politics will respond by leading by example, or whether it will defend and shelter those who are not willing to let go of their privileges. That is what we have seen from the Government to date and it confirms the worst features of politics in the view of many, namely, that we are out of touch.

The subject matter of this motion is germane to ordinary people. They see a pension being paid to somebody who is still at work largely in the same job. They see a pension paid to someone regardless of age. They see it paid along with a salary that is among the highest in the public service. That is why people react with fury, as we have seen in recent times.

Members of the Opposition have said that this system is long past its sell-by date. When a Bill on this subject was debated 18 months ago, Fine Gael advocated that all pensions to serving politicians would be brought to an end, yet the Government did not seize the nettle at that stage. It has allowed this problem to fester and develop into great damage to politics. Instead of debating how we can confront the enormous problems in our country, people hear about politicians holding out to defend privileges that have no bearing to people's ordinary lives and the struggles they face.

This is a really testing time for many families, so politicians must square up to the challenge and show that not only do we understand the problems and have ideas as to how they will be resolved, but that we are willing to lead by example. That is what people expect and they have a right to expect it. Politicians are given an enormous privilege by people to come to this House and to try to provide a framework within which all our people can prosper. We look back over the past few years and the catastrophic policy mistakes that have been made. People in the Government will seek to diminish their role in these mistakes and say it came from overseas, or that it was the fault of the Financial Regulator or somebody else. Let us be honest. People do not see robust accountability anywhere within the political and public service system. They do not see politicians, nor any other people in privileged positions, be they regulators or otherwise, take responsibility for doing their job. People are furious because they do not see accountability and they do not see a system that is responding to the crisis they are facing. We make it all the more difficult to build public confidence if some politicians hold out against this.

The Government is currently trying to persuade public servants to enter into a pay agreement. There is much to recommend in that agreement, but let us not fool around. The Government has undermined the case for signing up because it has been perceived to be unfair in the way it has applied the rules to date. Those rules were not administered in a fair way. The lowest paid were asked to pay a disproportionate amount. Senior public servants - 655 of them - were given a free pass, pretending that a bonus which they ought to have earned through exceptional achievement should be their automatic right. This is bogus. Judges were exempted from making the contribution that was asked of others. People want to see fair play and the reason there is difficulty in selling this agreement is that they do not see fair play, nor do they see a strategy for economic recovery. This motion highlights another example where unfairness is supported and protected by the Government.

I have seen and heard the political and legal arguments that have been trotted out, but they are threadbare. We have been told that a pension cannot be removed because this is a constitutional right of private property. That is a bogus argument, because we have already decided to cut them by 25% and we have decided to abolish them after the next election. A person who has ten years to serve in the Dáil after the next election effectively loses 85% of the pension, but if that were a fundamental property right, that 85% could not be removed.

The property right is a bogus argument. We have always known that property rights are circumscribed by the common good. One has a right to property and the free enjoyment of property only in accordance with the common good. Governments have a legitimate right to circumscribe that property right in the interests of the common good, once it is applied fairly. The argument of constitutional protection for pensions is threadbare. We also hear the argument concerning legitimate expectation - that in some way people entered the Dáil with the legitimate expectation that they would have these pensions. If that is the case, they will be gone after the next election anyhow. There is no legitimate expectation because these pensions are not part of an employment contract; they were created by a statute. The Oireachtas itself created this right and can remove it. That principle is well established. This is not like a contract of employment. These conditions are designed by the Oireachtas which can decide to change them in the interests of the public good.

Nowhere is there a fairer process than in the Oireachtas for Deputy McDaid and others who are affected, because not only do they have a right to be heard but they can also vote on the issue if they wish.

The argument that the Oireachtas cannot provide for the termination of these pensions is bogus. It is the right and duty of the Oireachtas to make decisions that are in the common good. The common good now demands that politicians should be willing to bear a reasonable burden. It is not unreasonable to end a system whereby people who are still working have pensions. It is particularly reasonable when those politicians are the very ones who are looked to to show example. There is an overwhelming argument for the Oireachtas to handle itself properly and sweep away this anomaly, which is an irritant and is undermining our credibility as being able to provide leadership.

I have heard Deputy McDaid talk about witch-hunts, as if this is a great conspiracy to hound down some individuals. It just shows the extent to which some people in politics have become divorced from reality. Ordinary young people coming out of colleges had a legitimate expectation - to use the words the Government used to defend pensions - to live, to work, to earn their livelihoods and to raise their families in this country. However, 80% of the 250,000 jobs that have been lost in the past 18 months were held by young people under the age of 30. A whole generation has been disenfranchised by the economic crisis we are enduring. How can someone who is earning close to €100,000 at the top of the tree in the public service claim that asking them to give up a pension is a witch-hunt when others see their prospects being wiped away? There must be proportionality, yet the Government seems to think this is discriminatory. I do not think the notion that, if the Oireachtas removes pensions from those who have served in ministerial office is in some way discriminatory, stands up to scrutiny. Of course, others who have retired from senior positions have pension rights, but they are not allowed to continue to work in the same jobs they had all their lives. That is happening in politics, however. People are continuing to work in politics and are seeking to draw a pension from a period in their lives when they were Ministers.

Senator Joe O'Toole offered the defence that when this system was set up one had to keep people of experience in politics. It was said that these were people who deserved to give of their ministerial and other experience to the House. That may have been a justifiable cause back in the day when that measure was introduced. At that time, by and large, people were amateurs and politics was a low-paid endeavour. They all had other professions and came into ministerial office suspending their other work. There was perhaps a case to say, "Let's keep them active in politics, rather than see them go back to those professions". That is not the case now. We are full-time politicians and are paid as much as a principal officer in the public service, which is a very senior post. We are not part-time amateurs who spend our time in the Law Library or in the offices of solicitors or accountants and come here on the odd occasion to provide advice on legislation. We are full-timers and should recognise that the world has changed. We are being paid on a full-time basis and we cannot defend old privileges.

This country is in great peril at present. To some degree, there is a battle going on between the past and the future. Many people's analysis of our problems stems from the extent to which they have been steeped in the past and the big mistakes that were made. They are the sort of people who come up with phrases such as "This is a property right", "This is a legitimate expectation" or "This is disproportionate and discriminatory". They have lost sight of what is happening out there in the real world where things are extremely severe. Part of the reason it is so tough is because of the abject failure by this country's leadership in the political, banking, regulatory and public service areas. They have failed us. We cannot look to the logic of that failed system to come up with reasons we should retain privileges like pensions for former Ministers. That basis is not good enough. People look to politics to lead us into the future, not to find the defences of the past.

My criticism of the Government is that it is steeped in the mistakes of the past. Its view of banking is "Let's try and protect the flawed, bad lending of the past", instead of saying "Let's create a banking system that can lend for the future". The thinking is, "Let's pull up the rope ladder behind us and protect those who are inside, let's not reform the bureaucracy, and let's stop recruiting new people to the public service". That is the sort of thinking that turns our backs on young people who are the future of this economy. People graduating from colleges have a right to expect an opportunity to work, even in the public service. If they are enterprising enough, they have a right to expect banks to give them credit.

We must decide to be on the side of the future, rather than opting for easy solutions that come from those whose analysis is steeped in the mistakes of the past. All the analysis the Government has offered to justify why it will not introduce legislation to abolish these pensions once and for all is steeped in the sort of thinking we must abandon if we are to serve those who are in great peril. We must correct our public finances and ask people in the public service to accept a complete change in their work practices. That will happen. We will have to tell such people that the work practices in the public service with which they have been familiar have changed. We are going to see radical reform, including shared services, bodies closing down and a rationalisation of agencies. When the public look in here, however, they hear people say, "The one thing we can't change are the pensions paid to former Ministers". There is a huge gap between the sort of transformational reform this country needs to create a future and the sort of thinking that is underpinning the Government's defence of an indefensible system.

At the end of this debate, I hope the House - including Deputy McDaid - will decide to abandon this system. The leadership should say to ordinary people, "Yes, we are in a crisis. We expect you to do extraordinary things for a better purpose in the long-term. However, we are also willing to abandon privileges that we have had as part of a collective effort to address extraordinarily difficult times."

Kieran O'Donnell (Limerick East, Fine Gael)
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I am delighted to speak on the motion, tabled by Deputy Bruton. Legislation should be fair. The Government is hiding behind legal argument in claiming to be bound by the advice of the Attorney General. The least it can do is to publish that advice and acknowledge that there are two sides to this constitutional argument. The Government is hiding behind the issue of property rights yet it introduced two separate Bills affecting public sector workers, who at the moment are being asked to vote on the Croke Park pay deal. The Financial Emergency Measures in the Public Interest Act 2009 introduced the pension levy and the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 introduced the pay cut. The same principles apply. People had particular property rights but given the financial situation in which the country finds itself, they were put aside in the common good.

It is not credible for the Taoiseach and Minister for Finance to come forward and state they cannot interfere with the property rights of Deputies in receipt of ministerial pensions. I accept they have done service to the State, but it is an inconsistency that does not stand up. What is required is leadership. There is a complete lack of leadership and understanding what ordinary people outside this Chamber are experiencing. People in the public sector are having difficulty paying their mortgages, child care costs and car loan repayments. Across the spectrum, people are losing their jobs. An additional 250,000 people have gone on the live register in the past two years alone. Unlike the 1980s in this recession people are heavily in debt. People with high mortgages - many of them 100% mortgages - are going overnight from having well paid jobs to being on social welfare. They are in dire danger of losing their homes. There is an agreement in place with the banks, but how long will that last?

It is about fairness. Deputy McDaid is in the House tonight. Everyone should be sharing in the pain. People who are retired are entitled to their pensions. The ordinary person looking in is asking why people who are not retired - many of them below retirement pensionable age - are getting pensions. I accept it is difficult for anyone to give up money. However, it is about fairness and balance. The Taoiseach and Minister for Finance have talked about it being unconstitutional. I call on them to introduce the legislation and see if anyone tests whether it is constitutional. Given that the Government has introduced two similar Bills to apply the pension levy and the public sector pay cut, which act on the same principles, why should it be any different for people in receipt of ministerial pensions while still in their jobs as Deputies and Senators?

The Fine Gael and Labour Deputies voluntarily gave up their ministerial pensions on which I commend them. Two elements are required. The remaining former Ministers in Fianna Fáil need to take that leap. They need to come forward in this Chamber or elsewhere and state they are relinquishing their ministerial pensions. Furthermore we need to introduce legislation to show the people that the Government and this House mean business and that we will make the changes.

We live in very difficult times. We are in the middle of an economic crisis, highlighted by the difficulties in Greece. Here government bond rates are at 5.65% today, an increase of 25% or 1.1 percentage points since the Greek crisis arose in the past week or ten days. That will increase the cost of borrowing for the State. People from across a broad spectrum, who are all making extreme sacrifices, are coming into our clinics every day, something on which we in this House need to reflect. We should be leading. The Taoiseach should appear before the House tonight to announce the introduction of this legislation. The remaining former Ministers should reflect on the situation at hand. Discussion of witch hunts and everything like that is only a sideshow. The main show at hand at the moment is that Ireland is in the worst economic crisis since the foundation of the State.

In the 1980s we had very high public debt but relatively low private debt. However, we now have extremely high private debt. I believe we have the highest per capita borrowing in the EU, which is frightening. People are losing their jobs. Those in the public sector have already taken a pension levy and pay cuts. Those in the private sector are taking pay cuts and are losing their jobs. We need fairness to be reflected and the pensions to be relinquished. Legislation needs to be introduced to ensure that happens.

Furthermore we need a proper strategic approach from Government in tackling the jobs crisis. There are three elements: a fiscal crisis; a banking crisis; and a jobs crisis. If the same effort and attention were given by the Government to the jobs crisis as has been given to the banking crisis at times, it would have paid considerably more dividend. If we get credit flowing from the banks without having a jobs strategy in place, we will not come out of recession. That is borne out by the ERSI and various eminent economists. More than half of our general government deficit has arisen because of unemployment.

We are here to represent people. We can never forget that the electorate put us here. There is a danger that the House can become a cocoon, totally divorced from what is happening in the real world. That is what has happened to the Cabinet and in particular to the Taoiseach. The Government now needs to step back and look at the issues at hand. First, it must show leadership. One of the key elements of leadership is fairness. One of the key elements is the issue of ministerial pensions for existing Members of the Oireachtas. I look forward to Deputy McDaid's speech tonight to hear his views on the matter. We must take cognisance of what people are going through and show leadership. Furthermore the Government needs to introduce legislation to ensure this happens.

James Bannon (Longford-Westmeath, Fine Gael)
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The people are waking up to the inequality in our society. Freedom of information legislation has done a lot to make people aware that former Ministers who are currently Members of the Oireachtas have enjoyed the benefits of two incomes. That such system is in place for the abuse of public money is beyond belief. Of course, we can also see a politician with the benefit of a State car claiming "turning up" money.

It has taken the economic downturn to alert people to the fact we live in a two tier society. It is incredible the Government repeatedly tells us that everyone must share the pain while rubbing people's nose in it by drawing a second salary that is worth more than many middle or low income families earn in a year. It is certainly worth more than the benefits the 15,000 unemployed in Longford-Westmeath receive, and the 450,000 unemployed across the State.

The only light at the end of the tunnel is the fact that the Government is divided on the outcome. The leader of the Green Party, the Minister for the Environment, Heritage and Local Government, has been outspoken on the issue, publicly supporting the elimination of these pensions. It will be interesting to see how he and his party vote on this motion tomorrow. Can he not support Fine Gael and retain a vestige of credibility?

It is beyond belief that the Government should impose harsh cutbacks on the least well off in society while its members were secure in the knowledge they were being paid on the double. The new awareness people are gaining and their instinctive begrudging of those on the gravy train is sowing the seeds of a revolution.

The bankers and some developers who lived off the fat of the land are also guilty of untold greed that has brought the country to its knees. They should be behind bars but they are not because they are supported by their cronies in this Government, the people who attended the Fianna Fáil tent at the Galway Races. They are entitled to cream money off, leaving nothing for the hard working, low paid citizens of the State. There is no NAMA for those young people who are unable to pay their mortgages. They are, instead, hounded by the banks that virtually forced the loans on them.

The members of the Judiciary are highly paid civil servants but are exempt from pension levies and salary cutbacks. They have achieved this by hiding behind the Constitution and are part of the "I'm all right Jack" mentality that expects the most vulnerable to pay for their security. I have heard it said that they are "entitled". Why should those struggling to make ends meet see the Judiciary escape the pension levy, particularly as it would not noticeably affect their standard of living, while it is crippling for those on lower and middle incomes?

The Government amendment to the motion, even by the standards we have come to expect from it, is laughable. It is extraordinary spin that defends the Government's actions on the matter under discussion, bleating that we must take notice of its actions to deal with the economic crisis. It wants us to recognise the budgetary measures taken by the Government. It is waffle and more spin from the Government, something it has been good at for the last 12 years but now it is coming back to haunt them.

When the amendment gets to the point, it notes that many sitting Members of the Oireachtas and the European Parliament have given up their ministerial pensions. This does not make clear that outside pressure, particularly from Fine Gael, made politicians give up these pensions.

It is interesting that the Taoiseach quotes the Constitution on these delicate matters. It is not possible under the Constitution to abolish these pensions, he claims, or to impose cutbacks on the judiciary, or to introduce legislation to cease payment of ministerial pensions to sitting Members of the Oireachtas. It reminds me of the proverb that the devil can quote scripture for his own ends.

Jimmy Deenihan (Kerry North, Fine Gael)
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As one of those who was lucky enough to have a ministerial pension since 1997, when our banks almost collapsed in September 2008 and during the financial crisis that led to the introduction of the supplementary budget, I decided without any prompting that I could not justify continuing to receive a pension. I also took a voluntary reduction in my salary of 5% without making a song and dance about it. It was difficult to speak to those going through major trauma with mortgages and families while being in such a privileged position. We are paid reasonably as politicians to do a good job and we are paid enough to make some sacrifices. When I meet constituents now, they are all feeling the pain. If we are to show leadership, if the country is to recover, we must all share the pain. As political leaders, those who make the critical decisions that influence people's lives, we must be seen to share most of the pain and set a good example.

The Financial Regulator has said that more than 28,000 households are in arrears with their mortgage payments. The ESRI has forecast 270,000 families will face negative equity this year and when the one year moratorium on home repossessions comes to an end, there will be major problems. If people feel a particularly privileged section of the community is somehow protected from these cutbacks and this hardship, they will react negatively.

Personal debt in Ireland is among the highest in the world. The Oireachtas Library research service has gathered information to demonstrate household debt amounts to €147 billion, a staggering amount for such a small country. There has been a lot of focus on Greece lately but we have a higher budget deficit, over 14%. We are in as difficult and precarious a position as Greece. Unless we address this in a way that will require massive sacrifices, it is only a matter of time before our bonds will be considered junk bonds. The focus on Greece could move to Portugal and Spain shortly but it could also move to Ireland.

If we are going to ask people to make real sacrifices, we must make sacrifices now. One element of that should be that those serving in this House and receiving one of the best parliamentary incomes in the world make the small sacrifice of giving up ministerial pensions while serving here. We are expected to make some very small sacrifices. Giving up our ministerial pensions while we still serve in the Oireachtas is a small enough sacrifice to make.

Brendan Howlin (Wexford, Labour)
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I call the Minister of State, Deputy Martin Mansergh. Does he propose to share his time?

Martin Mansergh (Tipperary South, Fianna Fail)
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I propose to share my time with the Minister for Finance, Deputy Lenihan, Deputy McDaid and perhaps another speaker. I propose to take six minutes.

Tonight's motion essentially revolves around an issue that has, to all intents and purposes, been settled by voluntary renunciation or gifting to the Exchequer in the short term, and by the abolition of all such payments to sitting ex-Ministers following the next election. Leaving aside the very definite advice on the constitutionality of any legislation that would stop all such payments now, voluntary gifting of ministerial pensions, which in many cases involves substantial loss of income to some of those concerned, on all sides of these Houses and, in some cases, beyond, has a virtue that legislation does not have. Credit is due to all those who, in the light of changed circumstances, have foregone payments which they or their predecessors received since the system was first introduced in 1938, although in earlier days the sums would have been relatively smaller. In 1992, 2004 and 2009, there was a progressive tightening up of the scheme. I give Deputy Deenihan credit for what he decided to do.

The headline in The Irish Times last week, "Bertie Ahern and 15 others give up their ministerial pensions", brought to my mind a faint echo of the most famous renunciation in history which took place in the French National Assembly on the night of 4 August 1789. Against the background of great rural unrest, liberal noblemen renounced their feudal privileges. Here in Ireland, old landed elites that were displaced along the road to independence learned, sometimes at considerable personal cost, that dogmatic insistence on legal entitlements could be very unwise and occasionally lethal.

Constitutional legality and moral legitimacy are not always the same thing. Democratic countries, republics, even Communist and post-Communist states, all egalitarian in intention at the outset, develop a political class as well as bureaucratic upper tiers and commercial elites that, in effect, can often devise their own rules and rewards. One tendency all have in common is a subsequent difficulty in recognising themselves as others see them. It is too simplistic to attribute such perceptions only to media influence. Some bankers and developers have been accused, as recently as today, of failing to recognise how much has changed. None of us should allow it to be said of us in this House that even in a parliamentary democracy we have learned nothing and have forgotten nothing.

At the present time, not only our economic well-being and independence, but, to a certain extent, our democracy, are on trial. There is rarely a shortage of radical alternatives. Although politics must never become the reserve of those with the best access to private funding, a distinction must be made between those financial supports that are essential to do the job and payments that, effectively, are bonuses or extra rewards. As was pointed out, this debate takes place against the backdrop of serious, ongoing, domestic economic difficulties which we are striving to master and which demands or has cost serious effort, sacrifice and hardship for very many people. There is also international market turbulence which is an added potential danger to Ireland. As most of us realise, we cannot allow ourselves, as Members of the Houses, to be cosseted and cocooned from what faces our fellow citizens. We must show example by discarding systems of reward which, in today's circumstances, appear extravagant and not easily defensible.

We also speak at a time when the Croke Park pay deal is in the balance. Social partnership was always the alternative to the disastrous route that resulted from the Thatcher-Scargill confrontation across the water in the 1980s, a choice that could be ruinous to a small and vulnerable economy such as ours. President-for-life Arthur Scargill's recent advice to public sector workers to fight on against an Irish trade union negotiated deal - which he came to tell us was an unmitigated disaster - is probably one of the better reasons for supporting it.

To the outside world we must continue to demonstrate our determination to maintain our recovery strategy. I am sure that after reflection all colleagues in these Houses will wish to join in showing the nation a common sense of purpose, at least as far as the underlying issue being debated tonight is concerned. If there are any who cannot accept for themselves the validity of the case, they might at least defer to the general will inside and outside this House.

Brendan Howlin (Wexford, Labour)
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The Minister for Finance, Deputy Lenihan, has 15 minutes.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"— takes note of the Government's actions to deal with the economic crisis;

— recognises the budgetary measures taken by the Government to stabilise the public finances;

— notes the reduction in the number of Ministers of State and the reduction in staffing of Ministers' offices;

— acknowledges the extensive efforts of the Government to secure solidarity among the social partners;

— recognises the measures taken in the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices Act 2009 which reduces the Ministerial

pensions of sitting members of either House of the Oireachtas by 25 per cent and provides that payment of such pensions to sitting members will cease after the next

general election;

— notes the Attorney General's advice that the immediate and total abolition of pensions for a single category of pensioner would be unconstitutional; and

— notes that many sitting members of the Houses of the Oireachtas and the European Parliament and others have made a gift of their Ministerial pensions to the Minister for Finance for the general benefit of the Exchequer."

It is well past time for the Dáil to have a calm, clear and reasoned discussion about the issue of ministerial pensions. What we have witnessed in the last week or so is a personalised focus on the pension position of individuals. It has been unedifying and has done little to advance any reasonable argument about fairness or leading by example.

I accept, given the enormous upheaval in the economy over the past two years and the sacrifices all sectors of the community have made, there is a need to ensure that leadership is shown by members of Oireachtas. Nonetheless, it is essential that the Dáil debates the matter in a rational manner. There was little room for reason in the controversy surrounding ministerial pensions. As we hurtled towards populist headlines, there was little thought for the personal circumstances that some - of an admittedly small group of individuals - may be enduring.

In my supplementary budget speech just over a year ago, I said that in the current economic circumstances: "Everyone must give according to their means. . . But before we ask anyone else to give, we in this House and in this Government must examine our own costs. We must lead by example." That is precisely what we did. The Government has taken a strong and clear line in reducing the costs of running our administrative and parliamentary system.

Let us look, therefore, at what has been done in this area over the past 18 months. In November 2008, the Government announced the decision of the voluntary surrender of 10% of their pay by Ministers and Ministers of State. In February, 2009, the Government introduced a pension-related deduction — the pension levy - which aimed to reduce the public service pay bill by an estimated €1 billion in a full year. While the average contribution is 7%, income over €60,000 was levied at 10.5%. All Members of the Oireachtas, rightly, had their pay reduced by the maximum amount under the levy. In April 2009, the Taoiseach announced that the number of Ministers of State was to be reduced from 20 to 15. This reduction also led to a reduction in the cost of running ministerial offices.

In the supplementary budget in April, I announced reductions in Oireachtas expenses; the abolition of the entitlement to further increments for Deputies, the abolition of some allowances relating to committee work and the halving of the allowance paid to Oireachtas committee Chairs.

In budget 2010, I announced the Government's decision to cut public service pay. Again, salaries of Members of the Oireachtas were cut according to their salary level. These were permanent reductions which will be reflected in future pension entitlements. Under this round of reductions, the salary of the Taoiseach was reduced by 20% which meant that when account is taken of the pension levy the Taoiseach's salary was cut by close to 30% in total.

Ministers and Secretaries General of Departments all took a pay cut of 15% which produced an overall cut of close to 25% when taken with the pension levy. That is in the absence of reference to the additional taxation measures contained in the supplementary budget of 2009.

Looking at that record, any reasonable person would have to agree that the Government has made and continues to make a real and very substantial contribution to reducing administrative costs on pay and other expenditures. This Government has taken more action than any previous Administration to reduce the cost of running our political system. I can also say without any fear of contradiction that the range of actions Ireland has taken on pay and administrative costs generally is without precedent among our European partners.

Turning to the issues raised in the motion and amendment before the Dáil this evening, anyone listening to much of the comment about ministerial pensions could be forgiven for thinking that the Government has done nothing to change the terms and conditions of ministerial pensions and that, on the contrary, the Government has somehow decided to exempt ministerial pensions from making any contribution at all to the budgetary adjustments required. That is not the case. The Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices Act 2009 provided that ministerial pensions paid to Members of the Houses of the Oireachtas and the European Parliament would be reduced by 25%. These reductions were imposed immediately following the passage of the legislation. More importantly, the Act provides that such pensions will not be paid to sitting Members after the next general election or the elections to the European Parliament.

In considering that legislation, the Government looked carefully at the possibility of ending the payment of pensions to sitting Members of the Oireachtas with immediate effect. That is called for in the motion before the House. Strong advice was received from the Attorney General, which was reiterated this week, against this course of action. His advice was that pensions were earned but deferred income to which the person concerned has a property entitlement. In addition, the Attorney General advised that legislation to abolish in full the pension entitlements of a single group of workers who have clear rights to a properly earned pension would be discriminatory and give rise to legal and constitutional issues. As I indicated yesterday, the advice was that this could amount to disproportionate discrimination.

Why should it be considered disproportionate? There has been no reduction in the PRSI State pension throughout this economic crisis and to date there has been no reduction in any public sector pensions other than pensions paid to Ministers. To stand over, in constitutional terms, the abolition of one entitlement in a context where every other entitlement is preserved at full value is dubious. That is the advice of the Attorney General and it is not an arcane or obscurantist legal argument; it is an argument grounded in the need to maintain a robust legal framework for the economic decisions we must take in the Oireachtas.

The consistent advice from the Attorney General has been that it is open to this House to reduce the value of pensions for pensioners generally or particular classes but he questions strongly whether it is permissible for these Houses to unilaterally expropriate one group to the exclusion of all other groups by way of total abolition of pension entitlement. However the Constitution is reworded and whatever referendum is conducted, it is very difficult to see how, in any comparative jurisprudence, the proposition of targeting a single earned pension for abolition while leaving every other pension alone can be legally or internationally sustainable.

That is the advice we have received as a Government. I have no doubt the Opposition has consulted with lawyers who may have given contrary advice but that is what we have received as a Government and we are bound to act on it. It is responsible and considered advice which is not manufactured for any political purpose. The Government clearly examined this possibility last year and sought advice again when the motion before the House was tabled this week. It has received clear and consistent advice on this topic. No responsible government can act against legal advice of this kind and a responsible government does not have the luxury of ignoring the law and riding rough-shod over people's rights, no matter how popular such action might appear to be in the short term.

The Government did not decide to sit on his hands. We could have indicated the legal obstacles were so great that nothing at all could be done but we took significant action within the law and the Constitution. Although these pensions could not be removed, the Attorney General made clear that they could be reduced in a proportionate way after consultation with the relevant Members. I consulted fully with all the pension holders affected last year and, in the light of the few comments, proposed the legislation to reduce the pensions of sitting members by 25%. That was approved by the Houses of the Oireachtas at that stage.

Numerous Fine Gael Deputies spoke in that debate and were very critical of the extent to which the Government had travelled already in this direction. In the course of a very reflective debate, they objected strongly to the diminution of politics and the capacity of politics to attract people implicit in the measures being proposed by the Government at that stage. The Government also proposed in the legislation to stop payment of these pensions to sitting former Ministers with effect from the next Dáil. This was entirely in accordance with the legal advice. Before the next election, any affected individual will have an opportunity to assess the new position and make a decision in the light of personal circumstances about any alternative pension arrangements to be made.

Looking back at what the Government has actually done with ministerial pensions, I take this opportunity to say that I am very concerned about the nature and tone of the public debate we have witnessed on this issue. I understand and accept that there is concern at a time when economic constraints are very severe but I hope I am not alone in thinking that much of the debate has been distasteful. It has brought a new tone into our public life which I hope does not take root. If it did, it is likely to have wider and very difficult consequences for our political and economic system. In particular, there is a presumption that the political class exclusively is responsible for the current economic crisis and its resolution, and nobody else needs to make any contribution. That idea should not be allowed take root.

It is one thing to debate the rights and wrongs of policy about the economy, the budget, pensions, or any other issue of public importance, but it is another to single out individuals and pursue them until they are forced into a public announcement about giving up income to which they have a clear legal right, and which has already been reduced as part of a wider range of measures to deal with the budgetary crisis. None of us has the right to treat others in this way. As I said yesterday, I am not prepared to coerce people in the way some people have suggested. I find it particularly distasteful when I think about the measures the Government has already taken to reduce pension costs, measures which were very widely accepted by Members of the Oireachtas.

Why am I not prepared to engage in coercion? Perhaps uniquely in this House, I am aware of the personal circumstances of some Members. I accept many Members can freely and voluntarily yield their pensions and I welcome and applaud their decision to do so. In all this, we must remember that a considerable number of former Ministers have already gifted or intend to gift their pensions to the Exchequer. This is very commendable and I want to record the Government's gratitude for these significant and generous contributions. It is also important to remind Dáil Éireann and the public that these gifts were being made privately and without any fanfare before the current controversy began. Many individuals, including serving and former Ministers, wrote to me seeking no acknowledgement and issued no press statement on their pension entitlements.

I make no apology for what the Government has done in this area. The record I have set out shows clearly that we have moved decisively to deal with the economic and budgetary crisis, reduced the cost of running the Government and the Oireachtas and taken entirely reasonable and proportionate measures to reduce ministerial pensions paid to sitting Members. I acknowledge the assistance given by the Fine Gael and Labour parties on the reform of Oireachtas expenses. That was done through the Houses of the Oireachtas Commission, whose proposals I approved.

There is no need for the legislative measure proposed in the Private Members' motion. We cannot proceed with such a measure. The Oireachtas has already enacted reasonable and appropriate legislation to deal with the issue of ministerial pensions, which takes full account of the legal facts. There is no need to propose further legislation to continue a debate which is intended to persuade the Government to coerce individuals to give up their pension rights, which have already been curtailed and which will be removed for sitting members in the next Dáil. I commend the amendment to the motion to the House.

Joan Burton (Dublin West, Labour)
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I wish to share time with Deputy Ó Caoláin.

Brendan Howlin (Wexford, Labour)
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Agreed.

Joan Burton (Dublin West, Labour)
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For most people, a pension is something earned during one's working life which one then draws down in retirement. One of the difficulties with the current debate is that ordinary people cannot understand how public representatives enjoy pensions when they have not even retired yet. I do not believe that attacks are being made on pensions for politicians, per se. Rather, members of the public are unhappy with the fact that those who are still serving politicians and whose salaries, when compared with those of ordinary workers, are significant are drawing down pensions. People see such behaviour as inappropriate.

This debate is taking place against the backdrop of horrendous economic difficulties. In such circumstances, people are willing to play their part in getting the country back on an even keel but only if everyone contributes his or her fair share. Burden-sharing must not only be fair, it must be seen to be fair. In a recent newspaper article, the commentator David McWilliams referred to Ireland as a country divided into insiders and outsiders, namely, an inner circle of well-connected people and the rest. He stated that insiders reap the profits when times are good and outsiders bear the brunt when times are bad.

An important aspect of this debate revolves around the fact that the lowest paid public servants have endured a 5% reduction in pay and pensioners lost their Christmas bonus. There are well over 400,000 people who are unemployed and a further 60,000 have emigrated in search of work. We were all previously of the opinion that this pattern had come to an end.

Every worker in the country is paying more tax and is aware that Fianna Fáil is busy planning the introduction of more charges, taxes and levies in order to pay for the economic ruin it has visited upon the country. While the outsiders - the vast majority of people in Ireland - are feeling the pain of recession, it appears there is a golden circle of insiders, the members of which are jealously guarding their privileges. Bank bosses complain about not being able to get by on a mere €500,000 per year, which is compensation for the service they believe they are doing the country. Even though we bailed out the banks, they are of the view that they are doing us a favour and not the other way around.

Mr. Fingleton, the former chief executive of Irish Nationwide Building Society, is holding on to his €1 million bonus for services rendered, namely, for losing more money in one year than the building society earned in profits during its entire existence. Property tycoons retain their trophy houses, golf club memberships, private jets and perma-tans. With the bankers and developers at the first two points, the toxic triangle is completed by Fianna Fáil politicians.

It was interesting to listen to Deputy McDaid's robust cry from the heart in defence of privilege. If we are all in this together, the burden of sacrifice must be seen to be borne equally. Even though it can be painful in the context of people's personal circumstances, changes in expectations, reductions in income, etc. Deputies and Ministers who set out to be leaders must show leadership and must not allow the burden of leadership and sacrifice to fall on the shoulders of the least well paid members of the public service.

The Minister's argument is that there is no legal remedy in respect of discontinuing these pensions. We were all present when the various emergency measures to reduce public service salaries were taken. The measures to which I refer were described as being in the interests of the public and as being necessary in the context of the economic emergency. A degree of difference applies in respect of judges and former office holders who retain large perks. The average industrial wage in this country is €35,000 or so. If that is doubled, one arrives at a figure of €70,000. It is inexplicable that people who are holding down well-paid jobs should also be paid pensions that are at, near or in excess of the amounts to which I refer. It would be difficult to convince ordinary citizens that this is appropriate.

A pension is part of a pay package. If one signs up and contributes to one's pension, one has a right to it. The concept of a pension is that it is designed to meet one's income needs when one is in retirement. Members on all sides would defend that concept. However, during the Celtic tiger years we lost the run of ourselves in more ways than one. In light of our current circumstances, it offends people's sense of fair play and economic justice to see those who previously held office as Deputies, Ministers or European Commissioners and who are now earning large salaries in the private sector also drawing down huge State pensions.

If someone becomes a Deputy at 30 years of age and holds his or her seat until he or she is 50, should arrangements be made in respect of his or her transition back into his or her former life? Of course such arrangements should be made. However, that is different from people drawing down pensions which are multiples of the average industrial wage and which are paid long before the normal retirement age.

Such is the situation that has developed in Greece that the European Union, the ECB and the money markets are going to require that for a very long period Ireland should be subjected to tough fiscal discipline while the economy is brought back onto an even keel. In that case, one must examine other areas in which the State has been over-generous and has over-provided, particularly to those who are not of pensionable age and who have other employments, salaries or emoluments. If one seeks highly significant salary sacrifices from an ordinary garda, nurse or teacher or from an executive officer or clerical officer in the Civil Service, those who have the honour of being leaders by virtue of being one of the 166 Members of the Dáil should not be perceived to retain benefits that are unfair when compared with those of others within Irish society. This is the net argument.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Ba mhaith liom mo buíochas a gabháil leis an Ceann Comhairle agus leis an Teachta Burton. Sinn Féin fully supports legislation to end payments of ministerial pensions to representatives who are sitting in the Houses of the Oireachtas. However, this issue is deeper and wider than it has been conveyed. The pensions issue is merely the tip of the iceberg in a State in which who one knows still is more important than what one knows and can be of great financial benefit. There are people in receipt of ministerial and Deputies' pensions who are serving on State boards at present, which is a matter on which I wish to reflect. The issue of multiple pensions also has not been dealt with. Sinn Féin firmly believes that pensions should be paid to retired Oireachtas Members who should be in receipt of a single adequate pension.

Sinn Féin also contests that the wider issue of State pension provision must be dealt with more satisfactorily than has been the case to date. This State still awards billions each year in private pension tax reliefs while continuing to allow tax-free lump sums to be withdrawn on receipt of the pension. While some changes have been made, no one can deny that the State has lost billions in revenue because of its pensions arrangements for the wealthy in Irish society over the past few decades. Sinn Féin also has an issue with the State's proposals to force people to invest in the private pension industry, which has performed dismally in recent years and may be likely to so do again. However, these are issues for another day.

Today, as I indicated, I wish to deal with the issue of State pensions for former Members of the Houses of the Oireachtas. The issue of ministerial and Deputies' pensions extends both to Members sitting in the Chamber tonight and to former politicians who have been appointed by the Minister for Finance, Deputy Brian Lenihan, as public interest directors in banks. Their finances were set out recently and make for interesting reading. I refer to the first and most notable of them, namely, the former Fine Gael leader Alan Dukes. He receives €99,000 as a Government-appointed member of the board of Anglo Irish Bank and benefits from a combined ministerial and Deputy's pension of €99,470. Former Labour Party leader and Tánaiste, Dick Spring, receives a ministerial pension of €77,000, as well as a Deputy's pension of €52,213, which is a combined total of almost €130,000. This is in addition to his basic salary of €27,375 and €3,000 for every committee meeting he attends as public interest director at the partly State-owned AIB. The former Minister for Agriculture and Food and Fianna Fáil Deputy, Joe Walsh, is paid €78,750 as a State-appointed non-executive director at Bank of Ireland and receives a ministerial and a Deputy's pension worth €127,000 in total. In addition, the former European Commissioner, Charlie McCreevy, receives a ministerial pension of €74,746 and a Deputy's pension of €52,000. When added to his European Commission pension of €51,000, Mr. McCreevy's total pension package is worth €178,000 per year. He also receives a step-down payment following his departure from Brussels that is worth a staggering €537,000 over the next three years. The former Fianna Fáil MEP Eoin Ryan receives a ministerial pension of €5,909 and a Deputy's pension of €50,000. This is in addition to the €131,000 salary he earns as the Government-appointed Irish representative on the European Bank for Reconstruction and Development.

The outrageous point about this entire affair is that not one of those who came forward regarding their pension payments in recent weeks did so willingly, despite their attempts to salvage some kind of public relations image of which further examples have been seen this evening. One should be in no mistake but that this State has been in recession for some years. The bill for Oireachtas pensions amounts to approximately €12 million per annum. There are Members of the Dáil who received hundreds of thousands of euro in salaries last year and who did not do a single thing to address their own heavy charge on the public finances while defending decisions to take money from the most vulnerable in our society.

This issue goes to the heart of everything that is wrong in this society. The crisis in the public finances did not arise in a vacuum. Even during the decades of the alleged boom, sectors of society within this State were left abandoned. In years of surplus, we still had a two-tier and wholly inadequate health service, as well an underfunded education system. Sinn Féin still is the only party whose elected representatives take home only the average industrial wage and put the balance of their salaries and expenses into services for their constituents and campaigning work for their party. Others in this Chamber were happy to pocket pay rises when the going was good and after things turned bad, they only acted when the public and the media shamed them into so doing.

The heart of this recession does not lie with the social welfare pay bill, the spending in the health system or the minimum wage, which are issues that some voices from the Government side would try to impress on one. It lies with Government failure to properly manage the economy. When the Minister, Deputy Brian Lenihan, and the Taoiseach, Deputy Cowen, now preach about all of us being obliged to tighten our belts, I wonder who they are trying to convince. Is it the bankers and senior management in the private sector whose own personal excesses created wages bills for their businesses that now are clearly unsustainable? Such calls were not directed at any such people but at those who lived last year on social welfare payments of €204 per week, before the Ministers saw fit to reduce the amount to €196 a week this year. It is directed at those who are earning €8.65 per hour and who must learn to live on less because the Government and narrowly-focused big business leaders believe that the only way in which to build competitiveness is through slashing the wages bill and removing essential social supports, rather then through infrastructural development, universal broadband provision or a reduction in rents.

The pensions issue placed a microscope on the very worst excesses of the men and women in this Chamber and their predecessors. However, anyone can take a step back and see how broad is this problem. It certainly is not confined to what Members have been addressing or which has been the focus of media attention recently. There are still circles of people in this society, all of whom are interconnected because ultimately this is such a small place, which protect themselves no matter what. They will emerge from this recession barely affected, as has been the case historically. Occasionally, the media will raise an issue such as this one that brings to bear so much pressure on such circles that they are forced to take action to assuage public anger. However, it is not enough and another head always grows on this monster. People are disillusioned with politics in this State not because of this sole issue but because of the litany of incompetence and mé féinism that has pervaded the politics of this State over the decades.

What is required is a new beginning to politics both in this State and across this island. The old politics of cronyism, greed and partitionism must be discarded. I am glad to support the motion tabled by Fine Gael this evening although it constitutes only one small step. Accordingly, my final call in this debate is on the Minister of State to ensure that his Fianna Fáil colleagues accept the proposition put forward, accept the common sense and do not seek to hide behind a notion that they are not prepared to impose a new regime or to imply that it is in some way unconstitutional. None of those aprons behind which voices from the Government side have sought to hide in recent days adequately covers their shame. The Fine Gael motion before the House this evening, supported by the collective voices of the Opposition, is the essential step that must now be taken.