Alan Shatter (Dublin South, Fine Gael)

I thank the Members for agreeing to consider this legislation at an early stage. The terms of the 1994 Referendum Act require that a referendum Bill pass both Houses of the Oireachtas no later than 30 days prior to polling. I am grateful to the Senators for their co-operation. I published the Bill at the beginning of August with a view to everyone having adequate opportunity to consider it ahead of our debates in the Oireachtas. This facilitated a full debate on the Bill last week in the Dáil when I was glad to note the significant degree of support on all sides. It is a relatively rare occurrence to seek to change the Constitution so I very much look forward to today's debate and to listening to the views of contributors.

It is important to say that all the Deputies who contributed to the debate supported the need to ensure that the independence of the Judiciary as the cornerstone of our constitutional democracy is vindicated and upheld. I was glad to provide reassurance that the proposed amendment is designed to ensure that there is no erosion in this fundamental principle and I will repeat that assurance here today.

As Senators will appreciate, this Bill honours a commitment in the programme for Government. I am happy that we are in a position to proceed with this referendum at this early stage of the Government's term and at the same time as the presidential election. The Government's main objective in bringing forward this proposed amendment to the Constitution is to put before the people an option which would allow the pay of judges to be reduced on the basis of certain conditions and in very exceptional circumstances. The proposal will protect the independence of the Judiciary whilst also maintaining its good public standing following a period during which, through no fault of their own, judges have found themselves in a very difficult position.

As I have previously observed, the safeguarding of judicial independence is of value to every citizen. It means that people can be assured that judges' decisions are taken solely on the basis of law, independent of any fear or favour, whether personal, political or media driven. The power of judges to uphold the Constitution and strike down aspects of our law is a fundamental bulwark against the risk of tyranny and oppression which we have seen too often in other jurisdictions. Impartial judicial decision making and public confidence in that impartiality when disputes occur between the State and-or State agencies and individual citizens is an essential corner stone of our constitutional democracy. Guaranteed this independence, the judicial system in a democracy serves as a safeguard of the rights and freedoms of all the people. We have been well served by our independent Judiciary and I have not, nor will I ever be, found wanting in ensuring its independence is strengthened and secured.

In early 2009, the Fianna Fáil-Green Party Government introduced legislation to apply a public service pension levy on all public servants. The Judiciary was specifically exempted from this levy or deduction, because, it was stated, of the constitutional ban in Article 35.5 on reducing their salaries. In November 2009, when Fine Gael spokesperson on justice, I tabled a Private Members' Bill to amend the Constitution which, had the then Government seen fit to accept it, would have ensured that judges were in a position to accept the same pay reductions which had then been imposed on the public service.

The Fianna Fáil-Green Party Government did not accept my Bill and instead specifically excluded the Judiciary from a levy applied to everyone else paid from public funds. This action put the Judiciary in a difficult position, not of its own making. It resulted directly from the previous Government's interpretation of the terms of Article 35.5 of the Constitution, an interpretation with which I always disagreed. I do not believe that this interpretation was the original intention of the protection afforded by the Constitution to the Judiciary. Such a total blanket protection is inherently unfair and this unfairness has been dealt with by some other common law countries by allowing judicial remuneration decrease in real terms by not applying increases afforded to others paid from the public purse. This, of course, has not been the case in this country and partly as a consequence Irish judges are among the best paid judges internationally. However, given the importance of the Judiciary to our constitutional democracy, this in my view is not a valid approach. Instead, it is more appropriate to take a measured and coherent approach to judicial remuneration.

While the proposed changes will result in savings of approximately €5.5 million per annum, this amendment is not primarily about money. It is all about fairness and the need to ensure that judicial independence is no longer undermined, through no fault of its own, by the perception of judges as an elite group who are not contributing their fair share at a time of unprecedented economic difficulty. I firmly believe the proposed amendment will strengthen and uphold judicial independence while also striking a proper balance between the traditional protection afforded to judges' pay and allowing for the very difficult position in which Ireland now finds itself.

The Bill is short and contains just three short subsections. It proposes that Article 35.5 of the Constitution be amended by the substitution of the following:

35.5.1° The remuneration of judges shall not be reduced during their continuance in office save in accordance with this section.

35.5.2° The remuneration of judges is subject to the imposition of taxes, levies or other charges that are imposed by law on persons generally or persons belonging to a particular class.

35 5.3° Where, before or after the enactment into law of this section, reductions have been or are made by law to the remuneration of persons belonging to classes of persons whose remuneration is paid out of public money and such law states that those reductions are in the public interest, provision may also be made by law to make proportionate reductions to the remuneration of judges.

As is evident from the proposed wording the general protection afforded the Judiciary in most countries is retained. The proposed Article 35.5.1° restates the existing general constitutional protections afforded to judges' remuneration while allowing for certain constitutionally based exceptions to this protection. It is important that this measure be retained. As I have noted, judicial independence exists, not for the protection of the Judiciary but for the protection of citizens. This proposed wording will continue to afford judges full constitutional protection from arbitrary or maliciously motivated reductions by any Government. It was argued in the O'Byrne case in 1959 [IR 1] that the constitutional protection in Article 35.5 extended to exempting judges from the payment of income tax. This argument was rejected by the Supreme Court, with the Chief Justice Maguire noting, "To require a judge to pay taxes on his income on the same basis as other citizens and thus contribute to the expenses of government cannot be said to be an attack on his independence." The proposed wording of subsection 5.2o simply acknowledges that judges are, like any other citizen, subject to the imposition of taxes and levies.

The substantive change is contained in subsection 5.3o, which is drafted to allow that when, and only when, reductions have been made or are in future made by law to public service pay on the basis of the public interest, these reductions can be applied "by law" to judges' remuneration. Any such reduction must be proportionate. The provision clearly limits the reduction in judges' pay to cuts applying to others paid from the public purse. It also guards against any danger of successive reductions being made to judges' pay alone as it can only be done where reductions are being made to public service pay. I included the term "proportionate" as a Dáil Committee Stage amendment to ensure that no misunderstanding of any nature whatsoever as to the purpose of this provision can arise, and that its intent is clear.

It is important to understand that the proposed amendments will allow for the application of the reductions which have already been imposed on the public service on serving judges. The draft wording adheres, in effect, to the test outlined in a leading Canadian judgment, Queen v. Beauregard 1986 2SCR 56, in which it was stated that:

If there were any hint that a federal law dealing with these matters was enacted for an improper or colourable purpose, or if there was discriminatory treatment of judges vis-À-vis other citizens, then serious issues relating to judicial independence would arise and the law might well be held to be ultra vires.

There is nothing punitive or excessive envisaged in the draft text. Instead it is proposed that the pay of serving judges will be reduced by the same percentage as public servants on equivalent earnings. To that extent their salaries will be treated proportionately in the same way as the lowest paid officials. In effect, the Judiciary cannot be targeted for reductions and any such reductions can only be made in exceptional circumstances. If the referendum is carried, the reductions will apply from the date the legislation is enacted, it cannot be applied retrospectively.

I should mention that on Committee Stage I will be putting forward a minor technical amendment to the text of the proposed section 35.5.3°. This amendment, which proposes to remove a superfluous expression, that is, "into law" from the first line of that section, is being introduced in order to preserve the norms generally adhered to in the text of the Constitution and to ensure no possible confusion.

The Minister for the Environment, Community and Local Government, Deputy Phil Hogan, has made orders establishing a Referendum Commission for both this referendum ballot and the Abbeylara referendum. The eminent retired High Court judge, Mr. Justice Bryan McMahon has been nominated as Chair for both commissions. As with previous referenda, my Department is required to make a budget available to the commission for the necessary public information campaign. The provision up to a maximum of €750,000 will, if necessary, be the subject of a technical Supplementary Estimate later in the year.

I will outline why this amendment is being put before the people by this Government. Judges are not public servants, they are constitutional office holders. They are, however, paid from public moneys and operate within the public service environment. As the Chief Justice has observed, judges are daily witnesses to the difficulties which the current economic crisis brings - whether in family law, criminal proceedings or civil and bankruptcy cases. I believe it is essential that they themselves are seen to be subject to the very different circumstances which now prevail. The Judiciary itself recognised this through the arrangement entered into by the then Chief Justice with the Revenue Commissioners, which facilitated judges to make a voluntary contribution equivalent to the pension levy introduced in the first of the Acts to which I have already referred. I understand a majority of judges have made this voluntary contribution in respect of the pension levy deductions. However, I am not aware of any judge making a voluntary contribution in respect of the pay cut. There was however, considerable leadership shown by the new Chief Justice, Susan Denham in foregoing the pay increase due upon her recent appointment.

The current provisions of Article 35.5 have, in effect, led to an anomaly that puts judges pay out of line with pay in the public sector at a time when that pay has been the subject of financial emergency measures that have been approved by the Oireachtas. It is worth noting that the 2009 report of the review body on remuneration in the public sector, which recommended pay cuts for higher paid public servants, stated that the review body would have considered a cut in judges' pay in line with those borne by senior public servants but was precluded from doing so by virtue of the provisions in Article 35.5 of the Constitution. This objective and independent report recognised the duty of judges to contribute proportionately, that is to say, on the same basis as others paid from the public purse, to tackling our financial emergency.

In view of the inequity of the situation and cognisant of the difficult position in which judges found themselves, this Government, as part of our agreed programme committed to hold a referendum at the earliest opportunity on this matter so as to allow the people determine whether the Oireachtas should have the power to cut judges pay on the same basis as it has cut the pay of others paid out of the public purse. By enabling judges to pay their fair share I believe public confidence in the administration of justice will be maintained and enhanced in the eyes of many of our citizens.

I wish to turn to the draft implementation Bill. The proposed wording will facilitate the application to serving judges of the reductions provided for under the two Financial Measures in the Public Interest Acts of 2009. It allows for the type of reductions that have been made or are made "before or after the enactment into law of this section".I have published and circulated informally to all Members of this House the draft heads of an Implementation Bill which, if the referendum is passed, the Government intends to publish with a view to applying the provisions of the two Acts of 2009 to the Judiciary.

In order to be clear about the implications of the referendum, the draft Bill sets out the percentage reductions - replicating exactly the provisions of the 2009 Acts - which would be applied to serving judges. For the convenience of Members I have appended to my script a table setting out the effect of these reductions to serving judges' pay. As Senators will see, the effect of the reductions would be to reduce the pay of the Chief Justice from its current authorised level of €295,916 to a new salary level of €227,168. This level is net of the pension levy which is applied to gross pay. Proportionate changes are proposed for the other serving judges. For example, the level applicable to a judge of the Supreme Court would decrease from €257,872 to €198,226. The salary level of the President of the High Court would reduce from €243,080 to €186,973, a reduction of 23%. Reductions of 20% would be applied to the salaries of the President of the District Court and ordinary judges of the Circuit Court while District Court judges would see a reduction of just over 16% from €147,961 to €123,881.

The referendum will be about the pay of serving judges. However, the Government is also moving to reduce the salaries of future judges and my colleague, the Minister for Public Expenditure and Reform, Deputy Howlin, will shortly publish legislation to impose a further 10% pay reduction in respect of future members of the Judiciary.

The draft implementation Bill includes all the provisions and protections that have applied to the public service. For example, the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 introduced at section 3(1)(b) a grace period for public servants who retired before 31 December 2010 or a later date set by ministerial order. This provision means that pay reductions will be disregarded for the purpose of calculating pension entitlements, including gratuities, for persons retiring before the relevant date. This provision will be applied in an identical manner to members of the Judiciary.

Two ministerial orders have since been made in respect of members of the public service to fix the operative date now applying as 29 February 2012. This means that judges who choose to retire prior to that date may do so unaffected by the proposed reductions.

The approach we have adopted with regard to judges' pay in the context of the substantial fiscal difficulties that confront the Government is fair and proportionate. The fundamental constitutional safeguards of judicial independence that the Government and I, as Minister for Justice and Equality, hold central to our democratic constitutional architecture as prescribed in Bunreacht na hÉireann remain and the proposed amendment does not in any way impinge on them. The amendment will, if the people approve it, make a small but important contribution to the reduction in State expenditure, which we must all achieve to ensure the country is put back on a firm and stable economic footing.

I hope Senators will support the Bill and the constitutional amendments proposed and I commend the Bill to Seanad Éireann.