Alex White (Labour)

I have concerns as to whether what will be achieved by the section is what the Government intends. The Minister of Finance said in his Budget Statement that the salaries of the Taoiseach and Ministers, including Ministers of State, would be reduced by 15% and 20%, respectively, as recommended by the Review Body on Higher Remuneration in the Public Sector in its report published on 11 December. However, the Bill will not implement the recommendation because it imposes 20% and 15% cuts on the pay these persons receive as officeholders but not on the pay they receive as Deputies. As a result, the Taoiseach will suffer at most a pay cut of 15.6% and his Ministers a cut of 11.6%. Is that correct?

With regard to the pay cuts to be imposed on middle ranking public servants, the Minister in his Budget Statement said pay cuts would be imposed incrementally on a progressive basis and, "Accordingly, the pay of public servants will be reduced with effect from 1 January 2010 as follows: a reduction of 5% on the first €30,000 of salary, a reduction of 7.5% on the next €40,000 of salary and a reduction of 10% on the next €55,000 of salary". The Bill does not implement this intention because the relevant provision, table 3, provides instead that those with a basic salary of up to €30,000 will suffer a reduction of 5% of basic salary, those with a basic salary in excess of €30,000 but not in excess of €70,000 will suffer a reduction of 7.5% and those with a basic salary in excess of €70,000 but not in excess of €125,000 will suffer a reduction of 10%. This is an entirely different formula, which will have the effect of imposing a flat percentage rate reduction rather than a cumulative pay cut on public servants earning more than €30,000. In other words, an employee on €75,000, instead of losing an initial tranche of 5% of €30,000, 7.5% on the next €40,000 and 10% on the final €5,000, which amounts to a reduction of €5,000 or 6.6%, will lose 10% of his or her basic salary, which is €7,500, a difference of €1,500 or 20%. This will be brought about purely by a mistake in drafting. I do not criticise the drafters who are doing the best they can but the Bill has been put together quickly and I wonder whether there are other unintended consequences.