Martin Mansergh (Tipperary South, Fianna Fail)

I wish to respond to three points. Senator Alex White is simply misreading the Bill. The Chief Parliamentary Counsel has been extraordinarily careful to use different terms in each of the tables in order to achieve the effect sought by the Government. Table No. 1 refers to officeholders such as Taoisigh, the Cathaoirleach, Secretaries General etc and remuneration refers to the way officeholders are paid through a combination of basic salary and allowances in most cases. The reduction applies to the total remuneration, including salary and allowances. Tables Nos. 2 and 3 refer to public servants rather than officeholders and the term salary is used.

Concerning Anglo Irish Bank, I have made the reasons clear. Owing to its redundancy programme and so on, its staff will not be treated as public servants and, therefore, are not included in the Schedule.

Regarding public sector workers generally, the mantra is that since they did not cause the problem, why should they be affected by the situation that has arisen? The reality is that public sector numbers, pay and allowances improved substantially, especially between 2000 and 2007. This was partly as a result of the benchmarking process. To be fair to Fine Gael, that party has been consistent in its criticism of the process. The size of the public sector pay bill is being reduced. I wish it were true that the public service unions at all levels, including right up to the top where the worst offenders in terms of higher remuneration were located, did not contribute to the problem in the public finances in any way, but that is not the case. This is not to say that public service pay is the main cause of the problem we are facing, but almost all of us overextended and overcommitted ourselves in an unsustainable way during the prolonged period of the Celtic tiger.

Many people outside the public sector do not enjoy anything like the income of even the lowest paid full-time public sector employee, namely, small farmers, small businesses and the self-employed. I am aware of no full-time public employee who is paid the minimum wage. I do not have the statistics on minimum wage workers to hand, but public sector workers' pay and conditions at every level are not at the bottom of the pile.

Regarding the 5% cut in the lower level, we must recall the fact that we have had deflation of 5% or more. Before Senator Doherty entered the Chamber, I stated that we have had previous pay cuts, but they were disguised by inflation and devaluation. This time, people are being paid in a strong currency, the euro, that does not lose its value. Therefore, the reductions are more obvious. Many of the problems we are facing owe to psychology. For example, in the talks between the trade unions and the Government, one could say that the 12 days of unpaid leave that caused so much controversy would have disguised the reduction in pay for one year.

If one excludes people earning less than €30,000, one will interfere with progressivity. There are not too many young single workers with heavy mortgages. Generally speaking, people buy houses when they are hoping to establish families. With the exception of the single worker, anyone earning less than €30,000 would not be paying taxes. As we know, 50% of the population does not pay taxes bar the levies. Owing to the recession, last year's figure was 40%.

The argument that someone on €20,000 will take a larger absolute cut than someone earning much more is unsustainable. I will refer to example 7 of the 2010 budget supporting documentation. By definition, self-employed people do not count as they are not public servants. If one is a public servant, one is employed by the State. For a part-time worker earning €15,000, the total loss in income under the budget will be €332 or 1.17%. Incorporating the changes since the 2008 budget, there would actually be a small gain of nearly the same amount. Someone earning €150,000 will lose approximately €5,272 or 6.42% and the total change in after tax income will be €21,149 or 21.58%. I do not know from where Senator Doherty gets the argument that, somehow or other, persons higher up the scale will pay less. The majority of the e-mails going around the place are from middle income earners, not people earning starter salaries. Typically, middle income earners have overborrowed and are overcommitted. This explains the background to the situation.