Dáil debates

Wednesday, 10 October 2012

Other Questions

Public Sector Staff Remuneration

2:10 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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To ask the Minister for Public Expenditure and Reform his views on the payments of salary increases by means of increment to public servants earning more than €100,000; and if he will make a statement on the matter. [43388/12]

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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Current estimates indicate that those on annual salaries of more than €100,000 represent less than 2% of the 292,000 whole-time equivalent staff who are employed in the public service at present.

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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On a point of order, is this question being taken with Question No. 28?

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I have not been informed of that. It is on its own.

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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Question No. 28 also relates to increments and salary differentiations.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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This question is being taken individually. The number of staff on salaries of more than €100,000 who are eligible for increments is much smaller than the number of staff on more than €100,000. With regard to the payment of increments to this cohort of staff, my Department has access to detailed data on increments only in the Civil Service, for which I have direct responsibility. Data for the Civil Service that are available to my Department indicate that of the 31,514 staff in the sector, just 104 staff on annual salary ranges in excess of €100,000 in this sector, or 0.3% of all civil servants, will become eligible for an increment payment next year.

2:20 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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While I thank the Minister for the figures, the question sought to ascertain the Minister's views on the issue. By way of parliamentary question to the Department of Health, I obtained the information that 185 people in the HSE on salaries of in excess of €100,000 will receive increments this year. The HSE represents approximately one third of the entire public service so we can assume the overall figure is approximately 500 people across the entire public service, not just in line Departments. This could amount to €40 million or €50 million per annum in increments this year.

All I am asking for is equality and social justice. I am not asking people to take a pay reduction. However, does the Minister think it right that approximately 500 people in the public service, or approximately 2% of the total, who are on salaries of in excess of €100,000 should be getting salary increases this year? Call it an increment or whatever one likes, it is a salary increase. The other 98% are not on those salaries and, let us be clear, I am very concerned about equality for the other 98%.

I do not believe the word "increment" is mentioned in the Croke Park deal so I cannot see how somebody can unilaterally say it is part of pay when this has not been tested by the Labour Court. I suggest the Minister would consider the issue. He has taken the issue of sick pay to the Labour Court so why not take the issue of increases to high pay and perhaps the Labour Court will introduce some common sense to this issue? He might consider giving me his views on that small group of people who are getting salary rises.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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I am taken by what the Deputy says. Needless to say, it is something I have considered. I have argued in general terms it is an increase and I know people sometimes categorise it as a wage increase. By and large, the great bulk of people who are on increments are at the lowest level, the starting grade, as I have argued. I have looked to whether I could just disaggregate that sector at the top and not pay their increments, and I have taken advice on that. I will be very honest with the House. I am advised it would take legislation analogous to the financial emergency measures in the public interest, FEMPI, legislation. The two pillars on which that legislation is built are, first, that the legislation has general application and, second, that it makes a contribution to the financial recovery. The problem with targeting a couple of hundred people is that it does not have general application and the money that would be saved could not be argued to make a substantial contribution to national recovery. Nonetheless, there is an equity issue with which I fully agree. Bluntly, I was not willing to risk the entire FEMPI legislation if it could be pulled down by virtue of a case for the tiny sum of money that would be involved in the context of the big recovery programme we have under way.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I am pleased to hear the Minister is personally well disposed to the issue if he can find a legal mechanism to do it. While it is only 500 people this year, it is another 500 next year and so on. In fact, the figure is about 6,000 or 7,000 over a period of a few years.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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Some come in and some come out. They have reached the top.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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It is approximately 500 this year and I have no reason to believe it will be any less than 500 next year or the following year. If it is €40 million a year, that is a significant contribution over a couple of years. I suggest the Minister might take a case to the Labour Court and see what it decides and whether this can be negotiated. I would much prefer to see the public sector unions defend low paid workers and their increments. If this was taken to the Labour Court, they might see the Minister's point of view.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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It is an important issue. I have an open mind in addressing all of these issues but I want to do it on the basis of what is fair and reasonable. I want to make sure I am not making decisions where the optics look good but which would actually put at risk a far bigger prize in terms of the importance of the FEMPI legislation and the contribution it is making to the national coffers. The total of increments for all staff is €170 million so the Deputy can work out what 1% or 2% of that would be annually, and it is not an enormous sum. As I said, I keep all of this under advisement and I have to tread carefully in ensuring the big prize is not jeopardised, namely, reducing the public pay bill by €3.8 billion and getting all the flexibilities I can. However, I take careful note of what the Deputy has said.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I absolutely agree the Minister should not even consider using a blunt axe in respect of increments for the very reason he states. The lower ranks, for example, clerical officers, have 13 pay points whereas Secretaries General of Departments have a single pay point - these are the extremes within the system.

This question brings us to the heart of the equity issue I raised earlier with the Minister. If legislation is needed, as he says, he should bring that legislation forward. I am frustrated at hearing continually an argument as to why the upper reaches cannot be touched, whether in respect of pensions or of these increments. The equitable and proportionate thing to do, where one has to make savings in the national economic interest, is to target them at exactly that cohort of people. Rather than making excuses, taking fright or perhaps being captive to the advice of some of his own senior civil servants on these matters, he should grasp the nettle. This will not solve the entire economic problem but it could prevent, for example, the €8 million in cuts to home help and home care packages, which is a worthy thing to do.

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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I want to ask the Minister a question and I would be grateful if I could get a "Yes" or "No" answer. Would the Minister approve of a higher band of income tax for moneys over €100,000 in Ireland while we are in such difficult circumstances, even for a set period of three or four years?

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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It is very important we get as much information as possible in regard to the area of increments, in particular data with regard to how many people are getting increments, what level they are at and in what Departments. This needs to be made available as quickly as possible in advance of the budget and I ask that it be provided across the entire public sector. With €170 million involved, perhaps there is scope for savings to be made which could be distributed towards very needy projects and protecting services for vulnerable people.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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I am sure we will have wider space for discussions on these matters at committee. I have discussed this issue with Deputy McDonald in general terms in regard to high pay. She and I differ in that she has an absolutist view that nobody should be paid more than €100,000 in the public service - that is her general principle.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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In a time of crisis, yes.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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My problem with that is that we would not get people to work in certain categories. We would not get doctors and consultants so we would have a private health system, and either the public purse would have to pay to get access to it or there would be an American system-----

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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How does the NHS manage it?

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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It pays more than €100,000. We will debate this. I assure the Deputy we are facing real challenges. We have a way to go to get to the 2.9% deficit target. I will certainly keep under advisement all of the issues that contribute towards the very difficult objectives we have.

Deputy Wallace asked about paying tax. What can I say?

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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The Minister could answer the question.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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I am trying to formulate a response. I am not the Minister for Finance and taxation matters are a matter for him. However, I would encourage everybody to pay the taxes that are properly levied by this Oireachtas. Again, taxation matters are a matter for the Minister for Finance.

Deputy Griffin referred to increments generally. All of the information is available in line Departments about the categories of public servant and the amounts each are paid.