Seán Fleming (Laois-Offaly, Fianna Fail)
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1. To ask the Minister for Public Expenditure and Reform if and when discussions on a new public sector pay agreement will commence; his aims for such negotiations; if they will cover matters other than pay and work conditions; and if he will make a statement on the matter. [5959/15]

Seán Fleming (Laois-Offaly, Fianna Fail)
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When will discussions on a new public sector pay agreement commence? What are the Minister's aims for such negotiations and will they cover matters other than pay and work conditions?

Brendan Howlin (Wexford, Labour)
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The Haddington Road agreement 2013-2016, which is the second public service pay agreement since 2010, forms the cornerstone of pay policy in the public service until July 2016, when it is due to expire. The focus remains on maximising the provisions of that agreement in relation not only to pay but also to the long-term impact of reform and productivity measures, such as extra working hours and reduced leave entitlements. However, it is prudent now for the Government to start preparing for the period after the agreement in the public service, and, in particular, to ensure there is a phased and structured approach to the reversal of the financial emergency measures, which applied billions of euro of cuts to the public service pay and pensions bill. To that end, I have indicated my desire to enter into a discussion with the public sector unions and associations to develop and agree an approach to that issue.

At a minimum, my preference is to have the first quarter Exchequer returns for this year available to me to put in context the capacity we have for these talks. Any such discussions on pay or other matters will, of course, take place in the context of the State's fiscal position and the pace of financial recovery for this year and next. It is important that expectations on all sides in regard to any discussions on the review of pay rates and other reforms are realistic. Having worked over the last four years to restore the health of the public finances, the Government is determined that any outcome of discussions with unions is consistent with our overall fiscal position. The current financial stability, which was hard won, must not be jeopardised. Nor is the Government willing to discuss changes in terms and conditions of employment that would attract a substantial additional cost if a serious impact is made on front-line services.

I am acutely conscious that 2015 will be the seventh consecutive year in which there will have been no pay increases for public servants and, as we know, there have been two or three actual cuts in nominal wages, depending on one's pay grade, which is unprecedented. During that time, public servants have accepted permanent changes to their terms of employment, including sick and annual leave arrangements, and their working hours, which helped preclude further cuts to front-line public services as numbers fell across the public service and will boost the productivity and efficiency of the service over the long term.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Minister for setting out the general position. I accept everything he said. No one could have any argument with it, but I would like to tease it out in further detail. Does the Minister have a view on whether talks on public sector pay should be carried out in isolation, separate from pay in the private sector, or are these talks confined to 280,000 public servants? Does he see it happening in a wider context?

It would be in everyone's interests to know, when we come to the Estimates next October, what the expenditure plans are for 2016, which would incorporate issues in respect of public pay. That tells me the talks need to be concluded over the summer months, after the first quarter, such that we are not coming along with Estimates next October in the full knowledge that they are not the real Estimates and that the public sector pay issue has not been dealt with. Is that the Minister's timetable?

Brendan Howlin (Wexford, Labour)
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The Deputy posed a number of very pertinent questions. I propose that the discussions I will have with the public service will be focused on the public service alone. We have had general discussions about a broader social dialogue, which we must construct, but we are not going back to a national pay agreement. What we are talking about is working out a settlement with public sector unions, which is unique insofar as many private sector employees have not had pay cuts. The biggest impact on the private sector has been the 250,000 jobs that were lost, but many people have done okay and wage increases are still happening in the private sector both last year and this year. We need to map out a sustainable path for the public sector in a fair and equitable way, particularly looking after those on low pay. There are other issues, such as the initiative by the Minister of State, Deputy Gerald Nash, regarding the low pay commission, which will have an impact on both public and private sectors. Regarding the timescale, I hope to have whatever is concluded concluded so that we can have robust and real Estimates presented to the House by the end of the year.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I take that to also mean it will have to be conducted within the expenditure ceilings the Minister published for 2015, 2016 and 2017. He might tell us if he envisages a length for the agreement - 12, 24, 36 or 48 months. Has he a preference? I know he cannot get into the details of that.

The Minister spoke of reversing the financial emergency measures, saying they had cost billions, and then he talked about the cost to the public. I am worried that that might create an impression that he is intending to reverse the measures - that it is in some way part of these talks. He might clarify this. Does he mean he is handing public servants back the billions that were taken from them, or is he just saying that these measures are over and we are moving forward? There is some confusion out there. It might surprise him to hear that.

In these talks, will the Minister look at front-line services to the public in order to decide what to prioritise, whether it is health care or accident and emergency services? One should not just talk about public sector pay in isolation from the services provided by the public service.

Brendan Howlin (Wexford, Labour)
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The Deputy made three very important points. We have published expenditure ceilings for the next three years. We might have a broader discussion at committee on the fiscal space we will have for next year, which will be a real issue, rather than trying to do it here. That is part of ongoing negotiations with the Commission in terms of how that fiscal space is to be measured accurately, to give us the capacity, for example, to invest when the economy is recovering.

That will require a broader discussion between us. FEMPI is, by its nature, emergency legislation. I have to put an annual report before the House to state that the emergency continues. I have done that every June. Thank God, the day will come when there will no longer be an emergency, but the Deputy is correct that we cannot allow a big collapse or a big bang. There will have to be a negotiated winding down of FEMPI if we are to sustain the gains we have made instead of putting them in jeopardy. I take on board what he says about front-line services.