Seán Fleming (Laois-Offaly, Fianna Fail)
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1. To ask the Minister for Public Expenditure and Reform his plans for the phased repeal of the Financial Emergency Measures in the Public Interest legislation; and if he will make a statement on the matter. [42277/14]

Seán Fleming (Laois-Offaly, Fianna Fail)
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Are the five separate pieces of financial emergency measures in the public interest legislation that are on the Statute Book from 2009 to 2013, which were necessary when introduced, currently justified, and has the Minister for Public Expenditure and Reform plans for a phased repeal of this legislation?

Brendan Howlin (Wexford, Labour)
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The Deputy will be aware that there are two measures that currently underpin public service pay and pensions policy: the Financial Emergency Measures in the Public Interest, FEMPI, Acts and the Haddington Road agreement. The nature of the financial emergency measures is that the powers granted by the Oireachtas under the legislation are temporary in nature and predicated on the continuing financial emergency in the State. The Haddington Road agreement is due to last for three years from 1 July 2013.

As provided for under section 12 of the FEMPI Act 2013, I am required to annually review the Acts, and a written report of my findings is laid before each House of the Oireachtas. My last review was laid before the Houses of the Oireachtas on 29 June 2014. In that review I concluded that there is still a need to continue to apply the relevant provisions of the legislation controlling the cost of remuneration of public servants and the other measures controlling the cost of the public service pay and pensions bill. It is worth restating that the expenditure proposals as set out in budget 2015 are based, in part, on the reduced public service pay bill, as well as on the revenue accruing from the pension-related deduction and public service pension reduction as provided for under the FEMPI Acts.

As well as the statutory requirement for an annual report to be made by me as Minister on the operation of the Acts, the legislation is maintained under constant review. The Deputy will be aware that the Government has recently accepted my proposal for the deletion of section 2B of the 2013 Act. As the powers provided to me under that Act have not been exercised to date and are not now necessary, I have proposed that they should be deleted from the legislation, and proposals on that matter will be before this House shortly.

The Haddington Road agreement, in the Government's view, sets the parameters for pay policy in the public service for a three-year time horizon. The agreement has enabled a key reduction in public service pay and pensions. The cost reductions and productivity increases - the reform dividend that we discussed on the last occasion - has allowed the Government the scope to recruit additional staff to key front-line services. This demonstrates that the agreement is delivering, that it has achieved its negotiated purpose and that it continues to be of value.

Additional information not given on the floor of the House

As the country moves, thankfully, into a more normal pay-setting environment, a change we can already see is under way in the private sector, I believe it is important that I, as Minister for Public Expenditure and Reform, give consideration to how, over the medium term, pay policy needs to develop in the public service to help ensure that overall fiscal targets, including the achievement of a deficit of less than 3% of GDP by the end of 2015, will be met. In addition, the public service unions have indicated their intention, should the State's financial circumstances permit, to lodge a pay claim next year. If such a claim is made, the Government will of course have to consider it in line with the prevailing fiscal position. The legal position concerning the financial emergency legislation, which has underpinned the reductions to date, will also have to be addressed as part of the establishment of more normal pay-setting arrangements in the public service for the future.

When my consideration is more advanced, I will bring proposals to the Government in the first instance. Any proposals to amend the FEMPI Acts will require primary legislation to be brought before the Oireachtas.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister has summarised the current position without giving any reason as to why he is holding the current position. He said he issued his report on 29 June 2014 in respect of the annual review of the need for the FEMPI legislation and he concluded that it is still necessary, but he gave no explanation as to why he believes it is still necessary. The level of the national debt is now decreasing as a percentage of GDP, and I understand that is the principal reason being used in this respect. Given that things are moving in the right direction, it is a reason to say that in the near future the legislation will no longer necessary. I note the Minister said that the Haddington Road agreement runs until 2016. There is almost an implication that when we reach the end of that period there might not be any further need for the FEMPI legislation. However, it might be possible during 2015 for the Minister to consider, similarly to the way in which he cut the Croke Park agreement short by six months, going into negotiations and having a new bilateral discussion with public servants in advance of the agreement's coming to its natural end with a view to advancing developments.

Brendan Howlin (Wexford, Labour)
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There is merit in what the Deputy is saying. It is necessary to maintain the income stream from the reduction of pay that underpins the 2015 budget, and without the FEMPI legislation that budget would not be robust. I am conscious, and I have said this to the House, that the FEMPI legislation is by its nature an emergency, and that is why I have to make a report to the House. The day will come, thankfully, when it will not be possible to assert that the emergency will be maintained; the emergency will be over. I want to prepare for an orderly unwinding of the FEMPI legislation rather than simply drifting into a situation in which somebody could take a court action and the courts could say that there is demonstrably not an emergency to sustain it. I have indicated that I propose to open negotiation with the public sector unions during the course of 2015 to discuss an orderly wind-down of the FEMPI legislation and to discuss the broader horizon of public sector pay as we go forward.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister said he was concerned about the possibility of a court case, and he wants to be able to demonstrate that there is still an emergency and that the legislation is necessary as of now. His actions in government on budget day demonstrated that there is no financial emergency. It is not possible to reconcile tax cuts for the highest earners in Ireland, as was signalled on budget day and as discussed in Finance Bill that has been going through the House yesterday and today, with a financial emergency. The actions of the Government have shown there is no financial emergency. If there was, the Government could not be giving tax cuts to the wealthiest people in Ireland, which is what it is doing in the Finance Bill. The Minister's actions show that he cannot justify his position that there is a financial emergency when the Government is looking after the wealthy and there is talk of the possibility of water subsidies for millionaires in the ether this morning. He has shown that the emergency is over, and he should deal with the legislation.

Brendan Howlin (Wexford, Labour)
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I thank the Deputy for his warm congratulations on our having solved the existential threat to the Irish people and the economy through the hard work of the Government, supported by the Irish people, in all the hardships they have endured for the past number of years, and for fixing the dreadful mess that had been created. It is a matter to be celebrated that we have made such progress, but we are not out of the woods. That point has been made by both the Minister, Deputy Noonan, and myself. We need to reach the target of a deficit below 3% of GDP next year, and in order to do that, the budgetary arithmetic requires the contribution from the public service through pay reductions that were negotiated and agreed by the public sector unions under the Haddington Road agreement. That will be maintained.