Aideen Hayden (Labour) | Oireachtas source

If anybody is talking about blame for failure to deal with Croke Park II, I would refer him or her to the previous Government.

This Bill is a surprisingly short one comprising only 13 sections and is reasonably succinct in its aims. It enables the reduction of remuneration for certain public servants on higher rates of pay in excess of €65,000, it suspends the payment of increments for three years for all public servants unless they are covered by a collective agreement, it gives the Minister the power to set terms and conditions for public sector employment in terms of working time and variations to non-core pay, and it provides for the reduction in the amount of pensions paid to former public servants.

This legislation comes at the end of a long series of negotiations around pay and conditions in the public sector and, more importantly, it comes in the wake of a number of similar items of legislation removing benefits from public servants, most of them introduced by the previous Government. It is easy to understand the fatigue public servants feel, their anger towards further cuts and that they increasingly feel misunderstood and undervalued. Like all of us, they are sick to the teeth of the expression "delivering more with less". Under increasing pressure on service delivery, public servants feel that what they have delivered under Croke Park I has gone unrecognised by the public. They can be forgiven for that given the scant attention that the media has paid to what has been delivered under Croke Park, focusing instead on stories that drive a wedge between public and private sector workers.

It is important to start this Second Stage debate by recognising what public servants have delivered for this country in the past number of years. I will give examples of some of those achievements. By the end of 2012 there were 565,000 more medical card holders in the system, 50,000 more students in schools, 30,000 more third level students and 80,000 more State pensioners, all achieved with less resources. Significant changes have been achieved in work practices and in areas such as Garda rostering, and in spite of fewer resources in many areas of the public service, members of the public have not even noticed a change. We owe a vote of thanks to what the public servants of this country have achieved.

There is no doubt there is renewed confidence in the Irish economy in recent times. We have seen a turnaround in the property market with the recent Irish Banking Federation housing market monitor showing a 14% rise in residential property market transactions for the first quarter of 2013 and a stabilisation in property prices. We have also had recent good news with the creation of 100 jobs in Facebook and today 400 new jobs were announced for Cork. On top of that, we have had recent predictions from the ESRI that Ireland will exceed growth expectations for the next number of years. All of this might lead to an expectation that the crisis is over and that we take our foot off the pedal. We are back to the bond markets and one might think that the troika had gone home. I had almost forgotten A. J. Chopra's name. Unfortunately, that is not the truth of the situation. Although we are 85% of the way there, we still have a distance to go and whether we like it or not we are obliged to go the last 15% if we want to get our country back.

The suggestion has been made, usually from Members on the Opposition benches, that we could do what is needed by either increasing taxes or reducing the cost of provision of services. The reality of the matter is, as Senator Barrett has pointed out, that we have done both. The fact remains that the public service pay bill still represents 36% of total Exchequer expenditure and this currently amounts to €18.1 billion. In spite of all the pain that has been endured so far, we must effect further reductions.

These effective reductions will be achieved by pay cuts. I will not go over what the Minister has said but it is important to recognise that those pay cuts are to be endured by those earning more than €65,000 in the main. That is an important difference between what we are doing in this legislation and what was done under the previous five items of legislation, most of them delivered by the previous Government. It is important to note that to date the majority of public service unions have come on board with the LRC process. I would like to pay tribute to them, to the work of Kieran Mulvey and his team and to the work of the Minister's Department.

This legislation is necessary and it provides a legal framework that needs to be made, of that there is no doubt. As the recital to the Bill notes - it is important to bear this in mind and it bears repeating - these "measures are necessary to address a serious disturbance in the economy and a decline in economic circumstances of the State". An important commitment has been made, and I note the Minister made it again here today, that these measures will only last as long as is necessary. I welcome the commitment he made again here today that there will be an annual review of the necessity for these provisions. I am only too well aware of the scepticism there is among the public about any new cut or new tax imposed given past experience with levies that grow like the layers of an onion. This debate is not about the Haddington Road agreement but I welcome the provisions in it that will restore benefits to workers in the future.

This is the fifth financial emergency measures legislation. It sets a floor in terms of €65,000 of core pay and any pay under that is protected. An important point to repeatedly make is that 87% of workers in the public sector will suffer no reduction to core pay. I am not suggesting for a minute to Senator Byrne that they will not suffer in other ways but the fact remains that core pay is protected by this agreement. It is important to note also that the application of cuts is stepped in favour of those who earn more. Those who earn more than €65,000 and substantially more than that, will pay more, and that can only be justified. The alternatives, if we were to accept what has been proposed by some people, would be to cut levels of service, but I do not believe in the current environment with the levels of poverty that exist that this would be acceptable.

I accept there have been criticisms of the legislation. I note that it would appear that former public servants had no forum with which to engage with the State. I note the Minister addressed this matter. It is important to state that floor of €32,500 is in place to protect former public servant but this is really about intergenerational solidarity. I do not believe that the entire burden of what is before us should be shouldered entirely by serving members of our public service, many of whom have large mortgages and young families to support. By putting a floor €32,500 in place, we are protecting less well-off public servants.

As the Minister has said, this is the last ask of our public servants. I believe these measures are necessary to restore the economy having regard to the position we are in due to no fault of this Government. I would like to thank our public servants for what they have done for our country in this time of crisis.