Jim Walsh (Fianna Fail)

I listened with interest to the Minister's speech. I agree with him that because of the huge change in our fiscal fortunes there is a need for us to address this area in the interests of the overall economy. Several efforts have been made over the past six months to get to grips with this, but even so we are still facing a budget deficit of some €20 billion or €22 billion. There is much work to be done on this.

There are two trends of thought on the long service increment. One, prevalent in the public service, is that it is there to reward people for their experience and, in turn, assist them in doing their job. In recognition of that, they get paid on an incremental scale. The other view is that people should be paid according to their ability, performance and responsibility. Having spent most of my working life in the private sector, I am more inclined to the latter. I know there are difficulties, particularly for administrative positions, in making that distinction and making judgments. Nonetheless, it has been done in the private sector.

I am not sure how effectively bonus schemes have been applied in the public sector as they seem generally to apply to people regardless of performance. For many in semi-State companies, it seems to apply even when the company's fortunes are not very good. We have seen this in the banking sector as well. There are certain underlying principles which should apply to the application of bonuses.

The Bill's provision for long-service increments came about because of a newspaper campaign which referred to them as bonuses. Given the opprobrium people have towards bonuses, particularly the banking sector's bonuses, the continuance of increments was not going to get public support.

It has been said those of us elected to office to represent people should give a lead in difficult times, a point with which I concur. Obviously, the amount of money being saved through this legislation, even when all long-service increments will be abolished after the next general election, will make no difference to the fiscal position. Who else in the public sector will follow this example? Unless applied across the public service, this provision is meaningless in correcting the public finances. The pension scheme has been changed during the time of most of us here, i.e. during the last term and previous terms, and entitlement to the pension now applies at age 65, as happens in the private sector. I have concerns about the voluntary early retirement scheme which will give people pensions at age 50. The actuarial cost of that has not been evaluated and I believe it will be significant. We are fortunate to be in the public service. We would not be able to buy these pensions if we were in the private sector and we should recognise that. I believe that at some stage the pensions we have will have to be abandoned, but there is a reasonable expectation by those working in the service that their current entitlement will continue.

I want to raise a couple of anomalies. This applies only to those who were there prior to the change and who were entitled to a pension after the age of 50, whose pensions will be affected as a consequence of this legislation. As I understand it, however, it is affected only if they continue to be a Member of either House of the Oireachtas. That creates an anomaly. A Member who has been a Minister will not be paid a ministerial pension while he or she continues to work in these Houses regardless of age. The import of this Bill is that that would apply even after the age of 65. However, if a Minister leaves politics and takes up another profession, say as a barrister, he or she could be charging fees of €1 million in a year, which I understand is not unusual for a member of the Bar Council, and still get the benefit of an Oireachtas pension. That is inequitable and should be looked at because it is essential that everybody should make a contribution across the board and that the system be demonstrably fair. If it is not, it will be difficult to persuade people across the broader spectrum of society to play their part in countering the difficulties and challenges confronting us and that we must overcome in the interests of the next generation and of regenerating the economy. If my interpretation is correct, I ask the Minister to comment on what can be done in that regard.