Dáil debates

Tuesday, 12 May 2015

Ceisteanna - Questions - Priority Questions

Public Sector Pay

2:00 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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182. To ask the Minister for Public Expenditure and Reform his objectives for the forthcoming talks on public sector pay and conditions; his proposed timescale; and if he will make a statement on the matter. [18370/15]

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I would like the Minister to outline his objectives for the forthcoming talks on public sector pay and conditions. What timescale and main objectives would he like to see achieved by the end of the process?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Following consultation with my Government colleagues, I issued an invitation to the representative organisations for public servants to enter discussions with public service management. The discussions commenced today and I am sure the Deputy will understand my reluctance to engage in negotiations in public. Further formal discussions will take place in the coming weeks and although I am not in a position to predict when the talks will conclude, early agreement will facilitate the assignment of resources and better budgetary planning. 

The end of the period of acute financial emergency which necessitated the introduction of the FEMPI legislation by this and the previous Government is now in sight because of the actions of the Government. Planning for the orderly wind-down of the legislation in an agreed and sustainable process, rather than risking a successful legal challenge, is the appropriate, prudent and correct approach. The Deputy is aware that I am required to review the FEMPI Acts annually. My next review of the Acts is due to be carried out and a report laid before the Houses of the Oireachtas before the end of June this year. Any proposed change to the legislation arising from the discussion process will be subject to Government approval and brought before the Houses of the Oireachtas. 

When the economic crisis determined that further reductions were required of public servants in 2013 under the Haddington Road agreement, agreement was secured by negotiation and discussion with the representatives of those directly affected. A similar approach in current circumstances is also appropriate. The Government considers any pay agreement should be prudent, modest and sustainable in the overall budgetary context as set out in the spring economic statement. Through the Haddington Road agreement and its predecessor, the Croke Park agreement, and through the supporting FEMPI legislation public servants have made a significant contribution to our fiscal recovery, including by way of  direct reductions in pay and pensions. From 2009 to 2014 the cost to the Exchequer of public service pay was reduced by €3.7 billion, or more than 21%. Notwithstanding the improving economy, because of the magnitude of these reductions, the Exchequer could not sustain the immediate restoration of such reductions. I have stated previously that both sides need to be realistic in terms of the expectations and outcomes of the talks regarding what can be achieved in the coming weeks.

2:05 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I understand that the Minister is not able to commit himself to any details and I was not really expecting him to do so as nobody could realistically expect that. He must, however, be going into the talks with some overall objectives and we did not hear about them in his reply.

The Minister will agree that every family has suffered financially in the past eight years and all families in Ireland, both in the public and private sectors, are entitled to share in any improvement in the economy. He will also agree that the initial focus should be on low and middle income earners. There is room in the public sector area for improvements in pay through not just pay rate adjustments but also reductions in the public sector pension levy, the USC and various other taxes. It is important that any discussions take place in the context that every household has contributed and any pay increases in the public sector should be in line with pay increases in the private sector. The public sector should not run ahead nor should it fall behind. What was missing from the Minister's reply was the 85% of the workforce outside the public sector whose position should also be taken into account.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I strongly agree with many of the points made by the Deputy. The FEMPI legislation underpins the cuts and that legislation is anchored in the emergency but, mercifully, we are now exiting from that emergency. The prudent and right approach is to prepare for the exit in an orderly way but in a way that does not risk the recovery that the Irish people have worked so hard to achieve.

I agree that we need to share in the improvement and that is why, during the discussions last year, we began the process of reducing the universal social charge on all workers from 1 January this year. Up to three pay reductions have been imposed on the public service and we agreed in the teeth of the emergency that when we next spoke we would be talking about pay recovery and that is what is under way right now.

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
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I put on record my thanks to the Minister for acknowledging the great work done by the previous Government in introducing the FEMPI legislation which, as he said, has underpinned the reductions in public sector pay by correcting the national finances. I welcome his acknowledgement of the great achievements in that area under the Croke Park Agreement, even though an agreement was very difficult to get at the time. We paid a price in the short term for introducing those measures and it has taken time for them to work their way through but I am pleased that the Minister has continued to work with the FEMPI legislation that he inherited when he came into office. I acknowledge that he continually refers to reductions in the public sector pay bill from 2009 to the current date. He knows that the majority of those decisions, which have put us on the right road, were taken in 2009, 2010 and 2011, prior to the present Government coming into office. Everybody in Ireland suffered financially and every family is now entitled to some share of the recovery, both in the public and private sector. It should not, however, be at the expense of front-line services.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I do not recall giving great credit to those who set fire to the State for calling the fire brigade and I will not do that. It was necessary because of the collapse of our economy due to a variety of factors, above all poor administration, politically, in the last part of the previous Administration. We have had to do a number of difficult things including bringing in the FEMPI legislation, which we have maintained because we could not have survived and made the adjustments we needed without it. Unfortunately, that is the position we were left in but I want to look forward. The Irish people have gone through a very difficult period but public service workers, unlike many in analogous countries who were in difficulties, did not go on strike, instead taking a round of pay cuts and working harder. We are doing much more with less and we now have 10% fewer people working in the public service doing an awful lot more. I want to keep that productivity so that we have a sustainable future for public services and for the people of Ireland.