Seán Fleming (Laois-Offaly, Fianna Fail)
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To ask the Minister for Public Expenditure and Reform if the savings he is seeking under the extension of the Croke Park Agreement are gross savings; the expected saving, net of pensions costs and tax, PRSI, levies and other deductions foregone, if he achieves the targeted saving; and if he will make a statement on the matter. [10378/13]

Róisín Shortall (Dublin North West, Independent)
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To ask the Minister for Public Expenditure and Reform the gross saving he intends to achieve from the public sector payroll in each of the years 2013 to 2015 with a breakdown by saving type, that is reduction in head count, overtime, core pay, increments, allowances and so on; and if he will provide an analysis of the net saving that will be achieved when income tax, USC, PRSI, pension levies and so on are factored in and when account is also taken of the effect on VAT and other Exchequer revenue streams. [10661/13]

Brendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 6 and 150 together.

Negotiations have taken place between public service employers and the public services committee of the Irish Congress of Trade Unions on the Government’s stated intention to reach agreement on securing an overall saving of €1 billion gross in the public service pay and pensions bill by 2015. Following intensive engagement in recent days between the parties which was facilitated by the Labour Relations Commission, the LRC has developed and recommended a set of proposals for consideration and agreement that seeks to secure the €1 billion gross savings required by the Exchequer, while ameliorating the impacts on public service staff, particularly those on low and middle incomes to the greatest extent possible.

There are three broad strands to the LRC proposals published yesterday which seek to secure agreement on savings and a more long-term structural reform approach to the public service. The proposals include productivity measures - extra hours, standard extended working day, standard extended working week and flexible rostering; workforce reform measures - changes in performance management development systems and flexitime, streamlining management structures and spans of control; and cost reduction measures - reduction in non-core pay rates, increments, overtime, premia and so on. As I said, the full details are published on the LRC website.

The precise implications of the savings package on tax and related revenues, both in direct terms and indirectly through effects on macroeconomic variables, are matters that will fall for consideration by my Department and the Department of Finance in the context of preparing the economic and budgetary strategy for 2014 to 2016. The detailed information sought by the Deputy is not available. However, I am satisfied that, subject to its ultimate acceptance and the necessary legislation being passed by the Oireachtas, the proposals available to public sector workers will produce the necessary savings of €1 billion over the lifetime of the agreement.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Therefore, the savings of €1 billion will be made over three years.

This is what is causing the confusion because-----

Brendan Howlin (Wexford, Labour)
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To clarify, we are ratcheting up to €1 billion.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Per annum. There has been confusion with the language.

Brendan Howlin (Wexford, Labour)
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I hope I am clear.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Minister for that answer and acknowledge he has said that these are gross savings. I know he cannot put an exact figure on it but presumably the net savings to the Exchequer as a result of this will be approximately 50% of that when one takes in PAYE, PRSI, pension levies and other deductions. Nobody can put an exact figure on it. The document that was produced does not give us any information about the amount of money that can be saved as a result of the proposals on working hours; the reduction in public service numbers; the savings in terms of overtime, premium pay and weekend work; the increments issue; and, the savings in terms of former public servants receiving pensions. I have no concept of how that document adds up to €1 billion. The Minister needs to be able to cost that and show me. If he can do that, he will increase the public acceptance of this document. He cannot just say "there's the document with no costing and yes, it meets our budgetary target." He must give us that information so there can be a proper, informed discussion and decision. It is like a referendum. This is a referendum among public servants who are entitled to have the full information about the implications of this. That is the information I am looking for. Can the Minister provide it?

Brendan Howlin (Wexford, Labour)
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As I indicated, this agreement has just concluded. As the Deputy can imagine, the latter phases of the discussions were fairly intensive so some analysis will be done. In advance of it, we did a considerable amount of work on drilling down into the workplace on a sectoral level to ensure that unlike Croke Park I, the savings will manifest themselves in real terms in the workplace. For example, all the additional hours we will generate should this agreement be accepted have to be monetised in a way that saves either head count, overtime, premium payment or agency costs. We have run indicative views on all of that and are confident that they will amount to the sums we are talking about. Pay generally in all the budgetary arithmetic is expressed in gross terms because individuals have different tax liabilities so we talk about the pay bill in gross terms. In order to compare like with like, if we are going to talk about reductions, we will talk about them in gross terms as well.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I accept that it will require some analysis but could the Minister in due course put into the public arena the savings that will emerge from this from the non-pay savings? Are they in there at all? In some cases, there are almost more non-pay savings through reform than pay savings and that issue has not come out here. Are the non-pay savings factored into this? Can the Minister give us proposals on that?

Brendan Howlin (Wexford, Labour)
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We need to get €300 million this year in gross pay and pension savings. All the ancillary things like procurement are separate and additional to that. Incrementally, we will get a significant part of €1 billion next year and the full €1 billion in 2015 annualised as it ratchets in if workers vote for the agreement which is a draft agreement - I do not want to be premature about this.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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As the Minister is well aware, I am implacably opposed to this new Croke Park deal in so far as it requires further sacrifices from low and middle-income workers. Following from Deputy Sean Fleming's point about the net savings the Government hopes to make, the Minister mentioned macro-economic variables. If I understand it correctly, he said that the Government will carry out further analysis with the Department of Finance in respect of those. That seems a rather bizarre way to proceed. We make the cuts before we have analysed what the impact might be on the wider economy. That leaves open the likelihood that we are cutting off our nose to spite our face. Many of those of us who have opposed austerity have suggested that by cutting the incomes of low and middle-income workers, the Government is reducing spending power and demand in the economy and doing further damage to other sectors of the economy.

Michael Kitt (Galway East, Fianna Fail)
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Does the Deputy have a question?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Does the Minister agree it is rather bizarre not to carry out an analysis of the likely impact on the rest of the economy before ramming through these cuts to the incomes of low and middle-income workers?

Tom Fleming (Kerry South, Independent)
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Croke Park is not completely equitable for workers in all sectors.

Michael Kitt (Galway East, Fianna Fail)
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Does the Deputy have a question because we are running out of time?

Tom Fleming (Kerry South, Independent)
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The incomes of people earning over €80,000 have not been sufficiently reduced in comparison to people earning below €65,000 who are taking an excessive hit in terms of the reductions. Could the Minister alleviate the position of those in the lower sectors of our public sector, such as nurses, hospital staff, gardaí and firefighters? They are facing a cut of 8% but those earning over €80,000 are also facing a cut of 8%. I request that those on a sliding scale from €80,000 to €120,000 face a cut of 9%, those earning from €121,000 to €150,000 face a cut of about 10% and those above that 12%. That would ease the pressure on those at the lower levels. I ask the Minister to reconsider all this.

Brendan Howlin (Wexford, Labour)
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I will deal with Deputy Boyd Barrett's question first because it is important. There are two levels to it. I was trying to answer in detail a set of questions from Deputy Sean Fleming which differed from Deputy Boyd Barrett's. They will require further analysis. We have obviously carried out an analysis of the impact of taking €1 billion out of the economy in general terms but the exact methodology was not known until we had a draft agreement so we could not do that work until now. I have already written to a number of trade union officials who posed that question about the impact of it. The bottom line is a very simple one. We must make adjustments. We must make expenditure reductions. The methodology of doing it through a reasonable pay reduction and extracting costs from public sector pay is less impactive on the economy than some of the alternatives, for example, cutting expenditure on social welfare or other areas. We need to get €300 million this year and €1 billion in expenditure reductions by 2015. The impact on the economy generally will be of the order of 0.25% but I will give the Deputy the details when we have crunched the numbers effectively. That is not an avoidable deduction if we are going to reduce public expenditure to the targets we are required under the troika agreement to meet, namely, to get it below 3% by 2015. There is no avoiding this. One does this in a way that is as effective and least impactive on the general economy as possible.

The contention that the burden falls on low and medium-income earners in the public service is wrong. If one looks objectively at it, one will see that what people earning below €35,000 are asked for is some extra hours' work but no reduction in pay in most instances. There are people who receive premium pay and so on. The final point concerns the point people keep churning out about the figure of 8% for nurses. I have not looked at all the figures yet but in order to have that reduction, one would need to work something like 22 Sundays and premium days and have a disproportionate element of one's income on the premium side. We are trying to devise a fair pay deal for 390,000 people. Low-paid workers who work 9 to 5 and do not get premium pay should not be disproportionately hit either. In the round, this is a fair, balanced and, for that reason, complicated deal that I hope people will reflect upon.

Michael Kitt (Galway East, Fianna Fail)
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Question No. 7 is in the name of Deputy Joan Collins. Deputy Boyd Barrett will be substituting.