Marc MacSharry (Fianna Fail)

I join others in welcoming the Minister of State. I welcome the opportunity to make a few points on the legislation. I pay tribute to Senator O'Toole for his overwhelming contribution to the social partnership model over many years. He was a champion of that cause and made a convincing argument today on many points. It was interesting to be taken through some of the negotiations last week. I know he has to leave but, as with any negotiation, nothing is agreed until everything is agreed. It is a regret we all share that it was not possible on this occasion to get agreement with the social partners. I very much hope we will be in a position to return to that model at an early date because it has served us exceptionally well during the past 22 years that the trade union movement and workers were working hand in hand with the State and facing the various problems we have had to overcome in that time. I accept what the Minister of State has said that the fact there was not an agreement does not cast any aspersions on the bona fides of either party within those negotiations.

An insolvent State cannot pay anybody. That is a critical point. As I said on the Fine Gael Private Members' debate last night nobody would wish to introduce measures such as are outlined in the Bill. Nobody would wish to reduce anybody's pay, no matter what the level. I very much regret that it is necessary to introduce the reductions outlined in the Bill. In terms of Government expenditure, €1 out of every €3 goes on public sector pay. Borrowing €400 million per week is unsustainable. While I recognise that public servants have already made a substantial contribution in terms of reducing public expenditure and the pension levy on average by 7%, the Government has decided the pay for all public servants will be reduced from 1 January. That is regrettable. We are all affected. Nobody likes the idea of it but it is a simple fact that it must be done.

We cannot have this debate without reflecting also on the private sector where we have seen much change in recent years. Many people have lost their jobs and many more will lose them. Many families have seen their incomes halved through unemployment. Private sector pay cuts have ranged between 10% and 35%. It is important in the context of this debate that we acknowledge that. Even with the correction in the public finances provided for in the budget, the State will have to do more again in the budgets of 2011 and 2012. The State will still have to do more in the budgets of 2011 and 2012, as mentioned in last night's debate. I hope future savings will not have to be made by reducing public sector pay. We look forward in hope to the day when pay rates can be restored to their current levels.

The transformation of the public sector can play a huge role in this regard. The challenge is to work together to effect that transformation. I know it will be painful for every single household. It will certainly not do much in the attraction of votes, but we are way past this in dealing with the economic crisis and the measures that have to be introduced. As the Minister for Finance, Deputy Brian Lenihan, said in the Dáil last week, we face enormous challenges and our options are limited. There is only a certain amount we can do. I think of the situation in which Greece find itself - it is somewhat worse than ours. Its budget has come in for serious criticism because it has not dealt with the issue of public sector pay. The reality is we cannot afford to pay what we were paying and, as a result, these measures have to be implemented.

The Minister of State went through the various sections of the Bill in detail and I have no intention of repeating what he said. However, I would like to make a couple of points not directly related to this legislation but which nonetheless are very important. The Minister of State, Senator Twomey and other Members will often have heard me speak on the issue of mortgage arrears and the prevention of family home repossessions which, as we all know, is a growing issue. I would like the Minister to try to follow up on some of the issues I have raised many times.

With regard to legislation, we have had the Irish Bankers Federation protocol which was very admirable, there is te very good work MABS and we have the regulator's code of conduct on mortgage arrears, which is also good. In the Budget Statement the Minister asked the regulator to consider extending the moratorium for 12 months. Collectively, all of these measures are quite good. However, I have a fear with regard to the many mortgage providers - some refer to them as sub-prime lenders - such as Stepstone Mortgages and Start Mortgages which are not covered by the IBF protocol. We should introduce legislation - perhaps an amendment to the Enforcement of Court Orders Acts - to prevent banks from obtaining a court order for the repossession of a primary family residence unless the family is processed through a series of measures such as those outlined by my group or within the IBF and MABS protocols, to place this on a statutory footing. That would ensure an order for repossession could not be achieved unless consideration had been given to these matters. This should be done.

There should be a publicity campaign. Whether it is undertaken under the auspices of the Department of Social and Family Affairs or MABS, or whether we make the banks do it, people in mortgage arrears and in difficulty should not be afraid to contact their financial institution and MABS and work through the various processes available, however flawed. Communication is vitally important, but people are genuinely afraid to contact their financial institutions if they run into difficulty. We need to have a publicity campaign to show the supports available.

There was a high profile repossession case in Waterford this week. When a repossession is taking place, the homeowner is in a very difficult position, but the relevant support agencies are not on site in the courts. This issue should be examined.

Another issue concerns lenders - I cannot call them rogue lenders because it is legal - such as Provident Personal Credit. I understand, although I did not see last night's television programme, that Provident is legally charging an APR of 187%, which is simply criminal. The European norm is approximately 30% to 35% in terms of the maximum rate chargeable. To think we are presiding over a regulatory system which permits Provident to charge 187% is disgraceful. We should immediately investigate this matter. I gather the programme shown last night suggested these organisations had no respect for existing regulations. From that, the existing regulations are not adequate. For any institution, a rate of 30% to 35% is far above what should be acceptable, but certainly we should not permit rates of 80%, 90%, 100% and, in the case of Provident Personal Credit, 187%.

It is my strong belief that, while we cannot get involved because of the separation of powers, legislation should be brought forward to permit a reduction in the salaries of the Judiciary. It is a national effort and everybody has to play his or her part. I accept that the Minister has said there will be further measures in the finance Bill to allow for voluntary payments to be made by the Judiciary. However, there should be a reduction in pay rates. It is as simple as that.

While I know semi-State bodies have a commercial mandate and finance expenditure on pay from their activities, in the context of utilities, a directive should be given to them to reduce wage rates in line with the reduction in the cost of living of 6% to 7% in the past year. This would reduce the cost of utility bills, whether gas or electricity, to families who are struggling. I would like these issues to be considered.

Nobody would wish to introduce measures such as these, but the fact is they are necessary. The economic circumstances demand such draconian measures. I regret this, but, nevertheless, we must look to the future, take the pain now and eventually success will be self-sustaining. It is vital that we get our cost base right and grow from there.