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Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: We are working on it. The HSE and the representatives of the nurses met yesterday afternoon and a further meeting is to take place on Friday between all of the unions involved in the management of the current wage agreement.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: In fairness to the Deputy, I shall develop the answer to the question he put to me. I am willing to work with the Department of Health and the HSE to consider ways in which the issue can be resolved, but I am not willing to put in place any measure that would undermine the national wage agreement. That has happened already in this Dáil in another part of the civil and public service....

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: This illustrates the problem with collective wage agreements. The Chairman has granted Deputy O'Brien five seconds, but Deputy Pearse Doherty is asking why he has been deprived.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: That illustrates my challenge. The Deputy is laughing only out of grace.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: We have acknowledged that some allowances, in particular, were contributing to some of the challenges, but that is why I have agreed to change them.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: The cost of the demands the nursing unions are articulating would be €300 million. If I were to make any change in a pay rate, it would have to be done for everybody. We made an agreement with many unions and said there was only a certain amount available for public pay in any given year. If the integrity of that commitment was to be undermined, the need would crystallise...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: No.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: I stand by what I said to the Deputy. Of course, there was engagement between my Department and the Department of Health on a submission on recruitment and retention. It happened because my Department has overall policy responsibility for staffing, recruitment and pay for all public services. As part of the process in that regard, we examined extensively the data available for recruitment...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: Another submission asserting other than what I have done or what the submission did would have been sent from the INMO and all of the unions that were active in the health service. The body that adjudicated over that was not the Department of Public Expenditure and Reform, but the Public Service Pay Commission, which is independent of me. Some of its report's recommendations caused...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: No. On whether we influenced the submission, we had an engagement with the HSE. That happens all of the time. My Department had responsibility for some key areas. We engaged with the HSE on the submission, as we will with every Department on its views on recruitment and retention, but with respect to the Deputy's good self, I categorically reject any view that we gutted that submission.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: I do not accept that for a moment. What I have said is the pay cost of their claim is €300 million, plus the €115 million to €120 million that would be the consequence of meeting the need for increased continuing professional development hours. These are the figures I stand by. The increased wages would generate a higher level of tax revenue, but every other public...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: No, I cannot.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: The Deputy and I have debated each of those measures. I would argue that many of his proposals would destroy jobs and investment in our economy. As I will indicate in my letter, a key issue that should have been considered in the ensuing debate is that I made a decision to change a significant tax rate to pay for much of the additional expenditure that followed. Of course, as the Deputy...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: The capital expenditure that we have embarked on will have a number of second round effects within the economy because it will act as a multiplier and a boost as investment increases. We did not build those second round impacts into our forecast in a significant way because they are difficult to forecast. One of the increasing challenges that we are facing from an investment point of...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: My particular concern at the moment is that we have a number of complicated public goods or projects requiring a high level of skill that we need to deliver through the public service. I have seen within the private sector a growing appetite in also delivering intensive and complex projects. What is different for us now is we are not only competing for, for example, the engineers to do that...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: Yes, and other European economies trying to catch up on that as well.

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: It now stands at 19%. It used stand at 14% to 15%. In terms of the degree to which that over-performance is now driven by one-off factors, our analysis is that there are a number of key factors behind the majority of change happening. The biggest one is the fact that corporate profitability has significantly increased since 2010. I refer to the corporate profitability that Deputy Boyd...

Committee on Budgetary Oversight: Fiscal Assessment Report: Minister for Public Expenditure and Reform (16 Jan 2019)

Paschal Donohoe: I thank the Chairman and Deputies.

An tOrd Gnó - Order of Business (15 Jan 2019)

Paschal Donohoe: It is precisely because of our support for public servants and our recognition of the immense work they do in our hospitals, classrooms and Garda stations that the process in respect of the repeal of the financial emergency measures in the public interest, FEMPI, legislation is well under way. We are in our second year of a wage agreement with our public servants that looks to undo the FEMPI...

An tOrd Gnó - Order of Business (15 Jan 2019)

Paschal Donohoe: We need to be fair to everybody in protecting the wage agreement, which also allows us to make progress on many of the priorities that are raised by Members every day in this House.

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