Pearse Doherty (Sinn Fein)

On that point, I agree with my colleague, Senator Alex White. The Minister of State has indicated that an additional cut will apply to the Taoiseach's pay. Having read the legislation, I have not found this cut. It should be in the legislation in black and white. Will another voluntary cut be made to make up the difference?

I fundamentally oppose the section. As the Minister of State is aware, Sinn Féin opposes cuts to public sector wages, except in the case of salaries above €100,000 per annum. The proposed cuts are not the correct course of action for a number of reasons. Public sector workers should not be targeted in isolation. Moreover, taking money out of people's pockets will deflate the economy and these cuts are deflationary.

I am sick and tired of the spin being peddled by Ministers and their spin doctors that average salaries in the public sector are €50,000 or €60,000. To clarify the matter, I asked one of my colleagues in the other House to table a parliamentary question on the level of pay of public sector workers in County Donegal. The reply which I received yesterday indicates that, according to the Department's latest information, there are 31,806 public sector workers in the county, of whom 20,658 earn under €20,000 per annum. In other words, two thirds of all public sector workers in County Donegal earn under €20,000, while a further 4,500 of earn between €20,000 and €30,000. This means almost 27,000 of the 31,000 public sector workers in County Donegal earn less than €30,000 per annum.

A large proportion of the 20,000 public sector workers in County Donegal who earn less than €20,000 are outside the tax net. Some of them have such low income because they avail of job sharing and other working arrangements. The percentage by which the pay of such persons is cut is not the main issue. For these workers, the big ticket item is not PRSI, income levies and all the rest but the net loss in pay arising from the pay cut. Most of them will take a 5% net deduction in their pay packet, in other words, the amount of money in their pockets will be cut by 5%. Let us take the example of a public sector employee who earns €160,000 per annum. A person on this salary will take a reduction in salary of 8%. However, as a result of taxes, levies and so forth, the net reduction in pay will be less than the net reduction in pay for a public servant earning less than €20,000.

Judging by the Minister of State's reaction, I need to explain the position again. More than 20,000 public servants in County Donegal earn less than €20,000 per annum. As most of them are outside the tax net, any reduction in salary will be to their net wages. The 5% reduction to apply to those in this income bracket will, therefore, reduce their net pay by 5%. On the other hand, a public sector worker on a salary of €160,000 will have his or her salary reduced by 8%. However, when one takes into account that he or she pays the higher rate of income tax, levies and so forth, one finds that the net reduction in his or her pay will be proportionately less than the net reduction in pay for a public servant earning less than €20,000. The Minister of State must agree that the proposal will result in a larger reduction in net pay for those earning less than €20,000 than for those earning up to €160,000.

This legislation is scandalous and should not have been brought before the House. Sinn Féin disagrees with the other Opposition parties, both Fine Gael and the Labour Party, on the matter. With the exception of those earning more than €100,000, public sector workers should not have been targeted. Those earning the average industrial wage and others should not have been targeted in this manner.

I reject the proposal and appeal to my colleagues from County Donegal, Senators Ó Domhnaill and Keaveney, to understand the Government spin about large numbers of high earners-----