Tuesday, 24 November 2015
Financial Emergency Measures in the Public Interest Bill 2015: Second Stage
Since taking office, the Government has made tremendous progress in stabilising the public finances, bringing the national debt down towards the European average and reducing unemployment. It must be acknowledged that public servants and public service pensioners have played a significant part in taking this country off its knees. Five separate pieces of financial emergency measures in the public interest, FEMPI, legislation have contributed €2.2 billion annually to stabilising the public finances. Now, through the Government's prudent management of the economy, we are in a position to commence the unwinding of the financial emergency legislation.
This Bill, which is designed to give legislative effect to the negotiated provisions of the Lansdowne Road agreement, illustrates that the Government is committed to the orderly unwinding of the existing legislation. The terms of the Lansdowne Road agreement were approved by the Government on 3 June this year and accepted by the public services committee of the Irish Congress of Trade Unions, ICTU, on 16 September following full consultation with its members. The agreement provides for partial pay restoration to public and civil servants. It also provides for a reduction in the level of pension-related deductions paid by public and civil servants. The restorations are significantly weighted in favour of the lower paid. These changes to the FEMPI measures require the Government to bring forward primary legislation to amend the existing Acts.
The Lansdowne Road agreement is not just about take-home pay. In addition, it secures and enhances the considerable reforms the Government has delivered since 2011. When we came into office, reform of the public service was a key component of our strategy to meet the enormous challenges we faced. Collective agreements implemented by the Government provide for 15 million additional working hours by public and civil servants, helping the Government to provide additional services to citizens with fewer staff. Under those agreements, we have seen overtime and other payments substantially reduced while other conditions relating to pensions, sick leave and holidays have all been amended.
The Lansdowne Road agreement builds on this progress and ensures public service and Civil Service reform will continue to play a key role in Ireland's recovery. The agreement strikes the right balance between the legitimate aspirations of public servants for pay recovery and the objective of sustaining or improving public finances. I have consistently acknowledged that during the crisis, the sacrifices of public servants and public service pensioners assisted in putting this country on the road to recovery while sustaining our public services. Therefore, as economic growth returns and private sector wages increase, it is only right that all public servants and public service pensioners start to see their take-home pay improve.Others take the view that the emergency is over and that the emergency legislation should be dismantled in its entirety immediately. This would be wholly irresponsible. While significant progress has been made, with employment on the increase, national debt in decline and public finances under control, we must be restrained. We must manage the process in a responsible, sustainable way, with the long-term interests of the country at the centre of policy-making. Therefore, this Bill is not about giving away in a reckless, unplanned manner but rather about giving back, in a measured and prudent way, to those who were committed to maintaining services in the face of the fiscal discipline that was required.
The estimated additional cost of the measures agreed in the Lansdowne Road agreement is €267 million next year, an extra €290 million in 2017 and a further €287 million in 2018. In addition, the reduction of the public service pension reduction carries a cost of €30 million for each of the years 2016 to 2018, inclusive. The Bill is concerned with the amendment of prior legislation, predominantly the FEMPI Acts, so as to give effect to what has been agreed by the employer, that is, the Government, and the public service unions in the Lansdowne Road agreement. As I have said, it is the first step in the carefully managed unwinding of the FEMPI legislation necessary for the pay and pensions of public servants to be restored. As the House will see, the measures it introduces are proportionate and fair, with something given back to all, since all contributed, but with the lower paid standing to receive most, relative to where they were.
For the benefit of Senators, I will briefly outline the main provisions of the Bill. Section 3 concerns pay restoration for public servants. It amends the FEMPI (No. 2) Act of 2009 to allow the reductions effected under that Act to be lessened. It is important to stress that the nature of this is progressive and measured, with lower paid public servants standing to gain most proportionately. It is also equitable, with the rationale being that since all public servants suffered pay reductions under the previous FEMPI Acts, all should receive relief of some kind. The restoration will take place in the following way. From 1 January next, public servants earning annual salaries up to €24,000 will have their salary increased by 2.5%, while those earning between €24,000 and €31,000 will receive a 1% increase. On 1 September 2017, the salary of all public servants earning less than €65,000 will be increased by €1,000. As well as these measures, this section also reverses the additional pay cuts for the higher paid from 2013, as follows. Where their annual salary is between €65,000 and €110,000, the amount by which it was reduced will be restored in two halves - first on 1 April 2017 and then on 1 January 2018. This restoration was an agreed part of the Haddington Road negotiations and the Government is happy to follow through on the firm commitment we made with the unions. For public servants with an annual salary of over €110,000, the amount by which it was reduced will be restored in three equal parts - on 1 April 2017, 2018 and 2019, respectively. This slower restoration of the cuts for this group is, I believe, proportionate and fair.
Section 4amends the FEMPI Act 2013 to extend by a further two years the suspension of the operation of incremental pay scales with respect to any public servants who are not encompassed by a registered collective agreement, as outlined in section 7 of that Act, that is, by the Haddington Road or Lansdowne Road agreements. This provision follows the existing structure of the 2013 Act and is now extended to accommodate the newly negotiated Lansdowne Road agreement.
Section 5 deals with the pension-related deduction payable by all public servants and introduces measures to reduce it, putting money back into the pockets of those who have had to pay this additional levy on their wages for six years. To this end, it amends the first FEMPI Act of 2009 so that this year's exemption threshold increases from €15,000 up to €17,500. This provision provides for outstanding moneys due in respect of the small change effected in pension-related deduction rates under the Haddington Road agreement in January 2014, rather than in July 2013, when all other measures took effect.The cost of this is €20 million. From 1 January next year, the exemption threshold rises to €26,083, so no income below that figure will be reduced. This figure is a blended sum which equates with the provisions agreed in the Lansdowne Road agreement whereby the threshold is increased to €24,750 from 1 January 2016 and to €28,750 per annum from 1 September 2016. There were to have been two implementation dates next year. For administrative purposes, the two figures have been amalgamated into one which will operate from the beginning of the year in order to achieve the agreed reductions over the course of the year. The full year effect of the new rate is then set for 2017.
Sections 6 and 7 confer the public service pension reduction, PSPR, payable by retired public servants on their pensions. Both sections amend the Financial Emergency Measures in the Public Interest, FEMPI, Act 2010. There are three groups affected by the public sector pension reduction. They will all have the amount payable reduced over the next three years, through incremental increases in the threshold of exemptions. The three categories of retired public servants who pay PSPR and will have their pensions partially and proportionately restored by the measures in the Bill include: those with pensions of over €12,000 who had the levy imposed by the FEMPI Act 2010; those with pensions worth €32,500 who are also affected by a further levy in the FEMPI Act 2013; and those who retired after 29 February 2012 and receive pensions over €32,500 and thus were affected by the FEMPI Act 2013 only. At the end of the implementation of this Act in respect of pensioners, any pensioner who has a pension less than €35,000, and that is almost 80% of all public sector pensions, will have his or her pension fully restored once this Act is fully implemented.
Sections 8 and 9 are straightforward amendments to the FEMPI Act 2009. The changes being made reflect the very different economic context in which we are now operating six years after the original Act and the need to adjust upwards in some cases rather than solely downwards, which was unfortunately the trend of late. The original FEMPI Act gave the Minister for Health with the consent of the Minister for Public Expenditure and Reform the power to reduce the fees paid to health professionals for services provided to the State. This amendment allows the Minister for Health to increase those payments and stipulates certain considerations to be borne in mind when doing so. Similarly, section 9 will allow other Ministers, with the consent of the Minister for Public Expenditure and Reform, to increase the fees paid by the State for certain services should he or she wish to do so. This is to ensure that people who are paid by way of fees rather than by way of salary also benefit from the pay restoration.
Section 10 is necessary to allow an exemption to be made to the provisions of the FEMPI (No. 2) Act 2009 which prevents any increase in pay for public servants. The 2009 Act, introduced by the last Administration, makes it unlawful to increase the pay of public servants, the exemption being allowed for here is where an increase is provided for in a registered collective agreement, such as Haddington Road agreement or Lansdowne Road agreement. For example, in the Haddington Road agreement, it was agreed that teachers would cease to receive allowances for supervision and substitution but that from next year, 2016, their wages would be adjusted to reflect this. The agreement was that teachers would agree to lose the allowance for substitution and supervision but from next year, that fee would be incorporated into their salaries and the provision in section 10 is to allow that to be done legally. This will happen only to public servants who adhere to the agreements we negotiated with them.
Unlike the rest of the Bill, the last two sections deal with other Acts besides the FEMPI legislation. Section 11 comprises amendments to the Courts (Supplemental Provisions) Act 1961 in respect of the pay of the Judiciary. These are in two parts, the first of which is to provide that the pay of the Judiciary will continue to be set by Government order but that such orders will no longer need to amend primary legislation. This is done on the advice of the Attorney General’s office and while not a significant change in itself, it ensures best legal practice is adhered to. The second is more substantial. It replaces the measures in the FEMPI (Amendment) Act 2011 which extended the 10% pay reduction for new entrants into the public service to the Judiciary. Under the new measures, new appointees to the Bench will be put on a three-point pay scale so that within two years they will achieve parity with their peers. This is to reflect what is happening in other employment as well so that there would be a catch-up mechanism for those who suffered the 10% pay reduction on entering the public service. This is in keeping with the general measures put in place for new appointees and recent entrants to the public service and, as such, addresses an inequity in terms of remuneration of judges which would exist without this provision.
Section 12 amends the Ministers and Secretaries (Amendment) Act 2011 to give the Minister permanent powers to deal with situations where public servants become in receipt of salaries at rates higher than those approved by the Minister, or in receipt of allowances which have not been approved. The Bill ensures that any such excessive remuneration shall not have contractual effect and that any unsanctioned overpayment in this regard is recoverable from the public servant. As Members will be aware this issue was highlighted by the Comptroller and Auditor General at the Committee of Public Accounts. For clarification purposes, when I said that pensions below €35,000 would be restored; to be absolutely precise the figure is €34,152. Anything up to that amount will be restored.
The Financial Emergency Measures in the Public Interest Bill 2015 is relatively short but it represents an important turning point for the Government, for all public servants and for the country as a whole. It is the first time in six years that we are in a position where, due to good economic management, a FEMPI Bill is being presented to both Houses which will give something back to public servants rather than ask them to make further sacrifices. I am aware that in negotiating the most recent agreement with the public sector unions, the Lansdowne Road agreement, I promised we would have a structured pay recovery. In fact in the original Haddington Road agreement which I negotiated I promised that would be the last ask.
I firmly believe that the Government has sought to strike the right balance between the legitimate expectation of public servants for some clear path to full pay recovery, and the broad economic considerations of which the Government must be mindful, namely, to ensure that the remarkable progress we have made is not put at risk.
Public servants have contributed very substantially to the recovery and we are now experiencing the fruits of that. It is therefore just and equitable that public servants be rewarded for the contribution they have made in this progressive pay restoration. It must be remembered that FEMPI legislation is predicated on their being an emergency. As we move out of an emergency into recovery incrementally it is necessary that it be unwound in a structured way but it cannot be done all at once because the full cost of collapsing FEMPI would be €2.2 billion which would have a profound impact on the public finances. Hence the Government has provided in this Bill a measured and carefully calibrated response that recognises but does not compromise the improvements and recovery, and which provides a fair and reasonable return to nurses, doctors, gardaí and civil servants, all of whom were required to make considerable sacrifices during the emergency that this nation has endured.
I look forward to hearing the views of the House.
I welcome and compliment the Minister, for whom I have had a long-standing admiration, on the various roles he has played in government over a distinguished career. However, I could not help but reflect that because he took on, in departmental terms, somewhat of a poisoned chalice in that he was the man who had to hold the line that perhaps not all the plaudits are going his way and that his colleague, in the Department of Finance, has been getting a more positive press. Despite the inevitable praise the Minister would heap on the Government for steadying the ship, to which he contributed much, it also followed the four-year plan that had been initiated by the Fianna Fáil-Green Party Government in the dying days of its administration. The Government is to be commended for having had the courage to do that against very powerful vested interests, particularly in the public sector.
The Minister has steered a very steady ship in that regard in his relationship with the public sector unions, although it is sad to reflect that there are a number of public service unions who have not accepted the Haddington Road agreement, such as the major teaching unions. The nurses are balloting to go on strike and there has been a reduction in morale within the public service in general, particularly in the health service where the much-lauded initiative, which I would have approved, and supported, to encourage more nurses to come back to shore up front-line services, for some reason has yielded only 77 nurses as against a target of some 400 plus. I wonder why that is because all of us would have seen the television programmes, in the initial period of this Government, of an entire class of nursing graduates from Galway, all of whom emigrated to the one hospital in London. One wonders why, given the improvements the Minister has outlined in terms of pay and conditions, they are not coming back. Perhaps they are hoping to gain more experience abroad before coming back. One hopes they will come back.
Overall, Fianna Fáil welcomed the conclusion of the public sector pay talks. The proposals on pay levels and changes to the pension levy are broadly in line with the position paper on public sector pay we published on 19 May 2015. At that time we said the focus should be on low to middle-income earners and that any pay improvements should include a combination of a flat rate increase and a percentage increase.
A key element of our position paper is to ensure that improvements in take home pay of public servants are in line with general wage improvements in the economy. Both the private and the public sector should feel the benefit of improved living standards. We have already called for the minimum wage to be increased to €9.20 per hour, slightly ahead of the actual increase granted of €9.15 which is welcome. This translates to approximately €1,000 per annum. The Minister will agree that the public and private sector must move in line together and neither must run ahead or lag behind the other. I think he has indicated that in his own contribution.
Newly-recruited public servants are at a disadvantage relative to staff recruited before 2011. This cannot be justified and may lead to long-term difficulties for the public service. We believe that equality of treatment for public servants should be fully restored. It is extremely disappointing that this was not addressed in the proposals. The issue of part-time workers, many of whom are female, must be satisfactorily dealt with also. There was no mention of these important issues in the legislation. Separately, the Government must address the restoration of front-line services, especially in the areas of health, education and security. This will be the real test of the Government's commitment to improving public services for all in our community.
In the context of the newly-recruited public servants I cannot help but raise an issue which was raised at the time. Much as one welcomed and continues to welcome the increase in Garda recruitment, in light of the murders in County Louth of Tony Golden and Adrian Donohoe, and of the continuing threat now to our national security, which hopefully is not real or immediate, like the scouts one has to be prepared. I know the Government is prepared and that the defence services and the Garda are also prepared in that regard. I find it hard to understand that young trainee gardaí on leaving Templemore, following their training, and being put on the front line of defending all of us at community level should receive only €23,000 per year. That is not fair. The Minister may have a different view but that was the figure that appeared in the media at the time - it was of the order of €23,000 to €24,000 when they go into Templemore. Maybe the pay element improves on leaving Templemore but on the face of it, given that we put so much trust and faith, rightly so, in the Garda Síochána and given the community empathy for the force, one would have thought their value was greater than €23.500 to put their lives at risk.
Public servants and people in the private sector have made huge sacrifices, as the Minister has said, in the past seven years since the economic crisis began in 2008. The recovery which is welcome should be shared with all in the country.We would also argue that any party or grouping promising full restoration of pay cuts without stating how they would be paid for is simply engaged in auction politics and that is not directed at the Minister or his party or the parties in government. Fianna Fáil welcomes the conclusion of the public service pay talks. The proposals on pay levels and changes in the pension levy are broadly in line with the position paper that Fianna Fáil published earlier. We believe there should be a focus on low and middle income earners as the economy expands, and I think the Minister referred to this. A civil service clerical officer on a salary of €700 per week suffered a reduction of €100 per week in net take-home pay as a result of the successive rounds of pay cuts and tax increases. This represents a significant cut in living standards and has put many families under severe pressure in meeting household bills, such as mortgages and child care.
It is important also that public sector pensions are sustainable into the future. This is the time bomb that has been ticking for the past 20 years. The pension fund was raided because of the economic downturn and one wonders whether this Government or future administrations have any plans, along the lines of the McCreevy proposals, to set aside money as the economy expands and improves in order to meet the ticking bomb of public service pensions or whether the Government is engaging in any sort of way to encourage more people to take out private pensions. Looking at the record of this Government in the area of private pensions, it certainly does not make it an attractive option, considering the high rate of penal tax on those who have pensions and also the ongoing pension levy which, thankfully, is going to come to an end this year. It is certainly an area the Government needs to focus on and I have no doubt the Minister and his officials are fully aware that this time bomb is continuing to tick to a point where a future administration may find itself running out of money with a large public service bill. I appreciate I am running out of time and there are many other things I could say in this regard, although I may have an opportunity later.
An Irish Timesarticle from 3 June stated that the Government concluded a series of side deals with trade unions as part of the process that led to the Lansdowne Road agreement and that these side deals, technically known as chairman's notes, deal with issues raised by trade unions across the Civil Service, health sector, local government and education areas among others. According to the article, the Department of Public Expenditure and Reform refused to release any details of the side agreements, although some have been highlighted by unions to their members. Surely the Minister, Deputy Howlin, would be in favour of absolute transparency. If there is nothing to hide, why not reveal it? Overall, Fianna Fáil supports this legislation and wishes the Minister well.
I welcome the Minister to the House. He is a frequent visitor and is the one Minister who will always provide great clarity. I will turn first to the Haddington Road agreement. Fine Gael believes that the Lansdowne Road agreement strikes an appropriate balance between the legitimate aspirations of public servants for pay recovery while ensuring sufficient resources for tax cuts for all workers and sustaining and improving public finances. We acknowledge that public servants have had the benefit of secure jobs and secure pensions throughout the financial crisis. However, they have sustained severe pay cuts averaging 14% while adjusting to workplace reforms when the size of the public service was reduced by 10% at a time of growing demand on public services. Public servants not only had pay cuts to deal with but they also had additional responsibilities because of the 10% cut in the numbers employed in the public service.
The new deal targets the bulk of available resources at lower and middle income public servants and, importantly, it meets the existing commitments made under the Haddington Road agreement, reinforcing the ongoing commitment of public servants to the wider reform agenda in the public service. All the extra hours and other workplace flexibility secured under the Haddington Road agreement are retained. While these benefits are targeted at the lower and middle income public servants, there is the old saying that "a rising tide lifts all boats" and we cannot lose sight of that. In time, everyone will benefit.
There is welcome evidence that private sector employers are once again agreeing sustainable pay increases with their staff. It is right that workers are seeing a dividend from the economic recovery. As the economy recovers, it is right that Government now sets out the prospect of gradual, sustainable pay recovery for public servants linked to continuing reforms to improve the efficiency and effectiveness of public services. We can never go back to the Fianna Fáil approach of making unsustainable pay awards which then had to be reversed because they were not linked to productivity or competitiveness.
All workers, both public and private sector, benefitted from last year's budget which reduced the universal social charge at the lower end and reduced the marginal rate of income tax. This year, both public and private sector workers benefit again from the budget's tax cuts. Budget 2016 brings the marginal tax rate to below 50% for any person earning under €70,000 and also increases the minimum wage by 50 cent per hour. Tax cuts for all workers can complement sustainable, affordable pay growth in a way that secures the economic recovery. This is a sensible budget designed to keep the recovery going, reduce our deficit to 2.1% of GDP in 2015 and 1.2% in 2016 and eliminate Government borrowing by 2018. Spending growth will be capped at below the underlying growth rate of the economy. This is consistent with EU rules ensuring sustainable public finances. If this rule had been applied from 2000 to 2007, it would have halved the growth in public spending which would have left public finances in a much stronger position in which to fight the recession.
The €27 billion capital investment plan is both affordable and responsible but opposition parties, particularly Fianna Fáil, wanted it to go further. Tax revenues will increase by 15% but spending will increase by only 4%. Over 2015-16, much of this unspent revenue will help to reduce the deficit. A minimum improvement of 0.6% of GDP in the structural deficit is required in order to comply with EU fiscal rules. This budget projects a 0.8% improvement in 2016.
While it is true the Government continues to borrow money, that borrowing has become very manageable and is available now at historically low rates. The Government will be in a position to implement moderately expansionary budgets every year until 2020 and still have a balanced budget in structural terms. The Government will do nothing to jeopardise the recovering economy and the plan is to return to full employment.
Fianna Fáil forgot to mention that it is the reason public servants had to endure seven years of pay cuts and tax hikes. It also forgot to account for the Lansdowne Road agreement in its alternative budget submission. In fact, it had a black hole totalling €550 million. This hole was made up of €300 million needed to meet the extra demand due to demographics, for example, in health and education, and €267 million for the new pay deal which was the Lansdowne Road agreement.
As part of the Stormont Executive, Sinn Féin implemented a two-year pay freeze in December 2010 for 12,000 civil servants earning more than £21,000, which equates to approximately €24,000. Sinn Féin is also cutting 20,000 public sector jobs this year as the North's public finances go from bad to worse. Despite these cuts in the North, Sinn Féin has tried to capitalise by opposing the Haddington Road agreement in the South, which imposed further pay savings. The Minister for Health, Deputy Varadkar, has said that Sinn Féin's plan to recruit more than 250 hospital consultants for less than €100,000 is nonsensical. The difficulty in recruiting consultants is well known, caused in part by competition on pay with other English-speaking countries. This year we are seeing the tide turn and Sinn Féin's barmy left-wing policies will jeopardise all of that.
I welcome the Minister's clarity regarding public servants pensions, which are to be restored, and the restoration of teachers' pay in lieu of the school yard supervision, which will be returned by 2017. My colleague raised the matter of nurses. There was a debate in the House recently regarding An Bord Altranais. The HSE is trying to recruit nurses from abroad. At the same time, there are up to 3,000 nurses in Ireland who have left the profession, many in order to raise their families.They are trying to get back into nursing but are finding it most difficult. I ask the Minister to contact An Bord Altranais to encourage it to pave the way for these qualified nurses to get back into nursing. Those who have left the profession to raise a family may need some time to brush up on their skills but they should be helped to do so.
I welcome the Minister to the House. I do not envy his job, which is a tough one, but I propose to make it a little tougher for him this evening. I will begin by dealing with the welcome elements of his speech. I welcome the fact these measures are generally weighted towards the lower paid which is the way it should be. They suffered most, proportionately, and they should be the first ones to have their concerns addressed. I also welcome the Minister's final remarks about section 12, which deals with the situation whereby, under the Ministries and Secretaries (Amendment) Act, public servants received pay increases above what is tolerable and gives the Government the capacity to retrieve those moneys. This is very welcome in a time of economic stringency.
I note the Minister spoke about the sacrifices of public servants, public service pensioners and so on. I wonder whether he considers Members of the Oireachtas to be public servants. I believe they are; they are paid from the public purse and they serve the people well. However, I did not notice anything specifically dealing with the situation of Members of these Houses. I know it is unpopular, and mine will probably be the only voice raising this issue publicly, but I am not the only person, by any means, who feels very strongly about this within the Oireachtas. The Minister's predecessor, the late Brian Lenihan, who was a thoroughly decent man, abolished with one stroke of this pen the increment for long service. In the case of a number of Members, that amounts to €10,000 per year, which is a big wallop out of one's pay packet. It also affects one's pension. It decreases one's pension from €38,000 to €32,000, which is a very substantial reduction. I urge the Government to give some consideration to restoring that increment. We are the only group in the Civil Service who do not have such an increment. We are sadistically sectioning ourselves off in order to appear good in the public eye.
I have raised the issue of allowances with the Minister on a number of previous occasions. The allowances are completely unusable. I used to send out newsletters but the postal allocation has been cut from approximately €2,000 when I entered this House to €350 per year. That only covers casual correspondence in my case. When I raised this issue previously, the Minister suggested that I use e-mail but I cannot do that because I only have 300 e-mail addresses for an electorate of 60,000. That is not going to get me very far. While the regulations do not specify that one cannot send out newsletters, they allow for spending on public relations consultants and expense account lunches and dinners. That, to my mind, reeks and should stink in the nostrils of anybody who holds public service in high regard in this country.
I have had an enormous volume of mail from people in the teaching profession and from members of An Garda Síochána. I have one letter here which asks that we amend the 2015 FEMPI Bill to remove the power from the Government to freeze salary increments. The letter writer is concerned about the freezing of salary increments but all of us in this House have had our increments abolished, even though the amount in question is piddling in terms of the national Exchequer. That said, I agree with the correspondent that the freezing of salary increments is problematic.
The Minister referred in his speech to the "emergency" which begs the question, "When is an emergency not an emergency?". The Minister, to be fair to him, said the following during the Committee Stage debate: "The bottom line is I agree with the thrust of what Deputy Healy said about pensions being a preserved property right. That has been determined by the courts.". He went on to say that to sustain the current pension contributions, there must be an emergency which needs to be certified. We all know that there has been a real emergency but the music coming from the Government at the moment is that things are getting pretty good again. In that context, I will quote from the 2015 budget speech of the Minister for Finance, Deputy Noonan:
Our economy has been transformed. It is growing strongly across all sectors and, most importantly, is sustaining and creating jobs. The economy has recovered all of the output lost during the crisis and is bigger than ever before in our history. Ireland is forecast to be the fastest growing economy in Europe again in 2015, with my Department forecasting growth at 6.2%. This forecast has been endorsed by the Irish Fiscal Advisory Council. My Department is forecasting growth of 4.3% in 2016 taking account of the figures endorsed by the Irish Fiscal Advisory Council and the full impact of today’s overall budget package. Economic growth is expected to average around 3% per annum thereafter.
That sounds pretty good to me. Of course, I know it is a political rallying cry but it does not sound like an emergency. I happen to think that there probably still is an emergency because all of these measures will be paid for from borrowed money.
Various Garda representative groups have joined together in opposing certain aspects of this Bill. They do not want, for example, the requirement to work additional hours to be continued. Both teachers and gardaí are seeking an opportunity to sit down with the Government to negotiate solutions in education and policing. It has been put to me in a recent e-mail that instead of this happening, the Government is including coercive clauses in this Bill.
Teachers are seeking to be exempted from certain burdens. In institutes of technology, for example, lecturers have 18 hours of lectures per week in addition to the research they are expected to conduct. However, assistant lecturers, their junior colleagues, have 20 hours-----
Yes, imagine that. There is no need for the Minister to be cynical about it. I know about this because I lectured very successfully in the University of Dublin in the past. While 18 hours might not sound like a lot, one must bear in mind the research one must do, as well as the preparation of lectures. The 18 hours only refers to actual lecturing in lecture halls. On top of that work, there is the preparation and correction of examination papers, tutorials and so forth.
I know this is just part of the rough and tumble of debate and the Minister just mumbles something, so we will put that to one side.
The Minister does mumble. He may not realise it but he does.
To return to the issue of lecturing hours, the international norm is between eight and ten hours per week. Since the recession began, funding for the institutes of technology has been cut by 32% and lecturer numbers have fallen by 10%, while student numbers have increased by over 20%. This is a really serious problem.
I wish to return to a point I made earlier. I know I will be the only Member to say this, even though every Member of these Houses is thinking it and discussing it in the bar and restaurant, but what about Members of the Oireachtas? I ask the Minister to think about the aforementioned increment because it affects pensions. Ours is not a particularly well paid job these days. As a Member of Seanad Éireann, my income is down by almost 50% because of the cuts to the increments and allowances. That is quite a big sacrifice. I know it is unpopular for public representatives to complain about their income but I will do so because I tell the truth, regardless of whether it is popular. I ask the Minister to address these matters.
I welcome the Minister to the House.This Bill seeks to implement the provisions agreed in the Lansdowne Road agreement earlier this year. As Members will know, the Lansdowne Road agreement follows on from the Haddington Road and Croke Park agreements and is designed to partially restore the remuneration of public servants and the pensions payable to former public servants. There are, of course, a number of miscellaneous amendments, some of which have received attention in the public domain. I think they have been referred to by some colleagues.
It is important to state for the record that this is only the first step in what will be a long process of coming back from the brink of economic disaster in this country. Some of the points mentioned by colleagues need to be addressed. Nobody will argue that the third-level system in this country, be it the university or institute of technology system, does not need significant investment. Nobody will argue that the plight of contract lecturers does not need to be addressed. Nobody will argue that the situation pertaining to teachers coming into the system - the so-called "yellow packers" - whereby they enter the profession on lesser terms than existing teachers is acceptable. I would not agree with any of that and I do not think any other Members of this House would agree with it either. There is no doubt that these matters need to be addressed.
There has been an unprecedented improvement in Ireland's financial situation in the past two years. In a short space of time, Ireland has exited what is known as the bailout and has a growth rate the envy of Europe. This has already been mentioned. Ireland has gone from a position where we were taking billions of euro out of the national budget annually to a position where we are restoring spending and reducing taxes - to the tune of €1.5 billion this year. While we may argue the toss as to whether the measures in the last budget favour the less well-off, it is interesting to note that a recent OECD report on Ireland demonstrated that in spite of the deep recession suffered by the Irish economy, Government actions to maintain social supports at enormous cost have ensured that Ireland is a more equal society than it was at the beginning of the recession.
It is important to mention that we still have one of the highest debt levels in the EU. In spite of the fact that our unemployment level has dropped to below 9%, we must bear in mind that not everything can be done in one fell swoop. Improvements in our economy now mean that we are in a position to restore services. We are in a position where we can say to every graduating nurse in the country that he or she will be offered a post. There are 750 more nurses in our system than there were this time last year - September to September - and there are more doctors in the Irish medical system than ever before. Improvements take time but this Government is certainly well on the way to improving health services in this country. Moreover, we are improving supports for vulnerable groups, are engaging in public service recruitment and for the first time in seven years, are acknowledging the contribution of public servants by also restoring some of the losses public servants have taken in during that period. We must remember that the various FEMPI Acts reduced the cost to the Exchequer of public service pay and pensions by roughly €3.7 billion or by more than one fifth and €2.2 billion in direct costs. This cannot be reversed in one piece of legislation.
We must also remember that hand in hand with these measures, there have been measures to improve productivity and deliver a public service fit for the 21st century. Public servants are now working an additional 15 million hours with a 10% reduction in staff. Our public service has changed the way it does business or at least the way it is perceived to do business. At the beginning of the crisis and for the first number of years when the number of unemployed people in Ireland looked like it might reach 500,000, I met people in the direst of circumstances who in some cases had lost everything but had nothing but praise for the people working on the front line of social welfare. I heard the same about every Department. I heard the same about local authority staff and in fact every aspect of the public service, bar traffic wardens. I am proud of the way our public service responded and stood up during this crisis and it is time we gave something back. Some people have suggested that we must give something back because the State could be challenged legally for not removing emergency measures when they are no longer necessary but I believe we give something back because it is the right thing to do.
Public service should be valued in any mature society and I believe this crisis has taken Irish people back from the brink of cynicism about our public servants. There has been an unhelpful narrative that perhaps stems from a history of deprivation where the public or Civil Service represented security and a status in society and where anyone who achieved an education sought a job in the Civil Service. Over time, this led to a view of Ireland externally as a society that did not encourage entrepreneurship. We saw evidence of this in the 1980s and 1990s where the discourse changed and business became the Holy Grail. During the 2000s, how many of us heard the mantra that if one or other of our famous businesspeople was running the country, things would be different? If only. There is no doubt that the view of the public service, which involved images of it being overly bureaucratic, unwilling to change, having no name and no face, letters signed "Is mise le meas", a job for life and so on, was very damaging to our public service. The crisis in our finances has allowed the Irish people to see once again the value of our public service and that is a good thing. The measures in this legislation are but a step on the road but they are an important step and I welcome them. I welcome the fact that lower-paid workers will gain more proportionally but all will benefit, which is only right. Let us not forget that in the face of the greatest storm when other countries saw different outcomes, industrial relations in this country were peaceful and the lights did not go out. Our public service has been a credit to this country and I am delighted to stand here to talk about this legislation. The time has come to give something back.
I welcome the Minister to the House to discuss this legislation, which we are not opposing for once which is a shock. First, I would like to state that this legislation will no doubt bring a level of relief to those on smaller incomes and some on very low incomes in the civil and public service. It is not going to be transformative for those workers but in their view, something is better than nothing. Having gone through numerous budgets involving cuts, getting a bit back is better than having a bit more taken off them. I have great sympathy for that view and for those who consider that after cutbacks and loss of income over a number of years, any alleviation is to be welcomed.
A few concerns were raised in the Dáil by my colleague, Deputy McDonald, and I will repeat some of them. Perhaps the Minister can address them in his closing remarks. I know we will probably be discussing this on Committee and Report Stages later in the week. The stated objective of the winding down of the financial emergency legislation was in the first instance to give relief to low and middle-income public and civil servants. That was certainly the position the Government stated and restated in various public sector agreements, including the Lansdowne Road agreement. The concerns voiced by Deputy McDonald concern the fact that it is at the higher end of earnings that full pay restoration is envisaged. The legislation sets out that in respect of income over €65,000 up to a benchmark of €110,000, a two-stage full reinstatement is envisaged and that a three-stage full reinstatement is envisaged for income in excess of €110,000. The argument that was made was that it should be more about restoring income for those under the €65,000 threshold. In terms of equity and delivering maximum relief, and I believe it is important that we talk about maximum relief, efforts should have focused on those in the lower-income bracket. I hope this is the case in the future. I know the Minister mentioned that it would cost a lot of money to collapse FEMPI in totality straightaway but I hope that the next legislation in this regard can go further for those on lower incomes. The question that arises for me and Sinn Féin concerns how full restoration of pay and conditions is set out in a staged way for people on lower incomes. That would be the equitable and fair way to proceed in the future.
I am completely at odds with Senator Norris's "won't someone please think of the politicians?" argument. The public would find the "politicians and their €10,000 increment, boo-hoo" line very difficult to swallow as they struggle to pay rent, as we look at the homelessness crisis, as people are being put out of their homes and as we see all other living costs increasing. It is not realistic. We are not on the breadline and we must be realistic about that. As legislators and public representatives, we need to lead from the front. That is what it is about. On Committee Stage in the Dáil, it was stated that current Ministers would voluntarily forgo any portion of income returned to them.However, it should be noted that is a voluntary action and is not set out in the legislation. Deputy McDonald also made the point that given Members of the Oireachtas, particularly members of Government, have been party to bringing in emergency legislation which has introduced many cutbacks that have been felt deeply by people on the ground, it is only appropriate that we, as Members of the Oireachtas, and, indeed, Ministers, lead from the front in respect of the recovery.
There has been much public concern, for example, regarding large scale pensions for former Ministers and politicians. It is not lost on people that some of these individuals were at the helm participating in bad governance and making bad decisions that led to where we are today and to the FEMPI legislation being introduced in the first instance. That is a view widely held by the public and, therefore, it is difficult to buy into Senator Norris's discourse. Some people find it hard to swallow that the same individuals walked away with pensions that could in no way be justified. This legislation should not be about returning pension income to those who may have been over-pensioned.
There has been reference to an emergency in the debate and I am in no doubt there is still an emergency, which is being felt across the country. People are in no doubt that it is still an emergency to get the rent together, pay the mortgage, put children through school and university, heat homes, and purchase food. In that light, future legislation in this regard should focus on workers on low incomes to make sure they get the maximum benefit from the recovery. We support the legislation and in making sure there is relief for public servants on low incomes.
I welcome the Minister to the House. It is a good day for the House in that we are unwinding some of the measures that had to be brought in. We are unwinding them as and when we can and we are cutting our cloth according to what we can afford. This Bill will give legislative effect to the Lansdowne Road agreement. The agreement has been ratified by most, but not all, of the unions. I refer to the TUI, looking at nobody in particular. I welcome the partial restoration that has been provided for. We must proceed with caution. Ireland is being held up as an economic miracle given we have the highest growth rate in Europe. However, we cannot take a flight of fancy and lose the stability, certainty and prudent management of the economic portfolio. The Minister has proceeded with care and caution to ensure stability and economic growth. The tough years everybody faced cannot be undone with the stroke of a pen. The Bill must be read with optimism but also with caution in mind to ensure the mistakes of the past are not repeated.
I would like to raise a few issues, which I would like the Minister to examine again. The first is the potential to freeze increments of public servants’ pay, particularly those of teachers. This is a huge bone of contention with teachers. Somebody will have to provide yard supervision and so on. The teachers had agreed to sign up to this.
The Minister said the Bill gives something back to all. Senator Norris referred to Senators and so on but I would like to mention local authority members. In 2011, changes were made to how they were treated. I acknowledge this comes under the remit of the Minister for Social Protection but the Minister should meet with her and the Minister for the Environment, Community and Local Government. I am delighted to discuss the restoration of pension income, but what pensions have councillors?
From January 2011, they were treated differently but they are public office holders. It is fine to have public servants such as us, Ministers, taoisigh, judges and presidents subject to this legislation, but a councillor earns €16,000 and has €663 taken out of it.
I would ask the relevant Ministers to put their heads together. All Senators working on this as a collective body because we represent councillors. They get nothing out of the 4% they pay in PRSI. Many of them have to take on the role of councillor full time given the huge workload. They are dependent on alternative employment and they have gaps in their pensions. In giving "something back to all", will the Minister examine the position of this sector?
Rome was not built in a day and I do not expect the Minister to do that. I acknowledge he is proceeding with caution to ensure stability is the main plank.
I would like to welcome the Minister with open arms to the House but, on this occasion, I am afraid I cannot. I congratulate his Department and those who negotiated the Lansdowne Road agreement. A number of unions have signed up to it and some low paid cohorts in the public sector will benefit from it, which should be commended and welcomed.
Has the Minister brought this legislation to the House to simply have it rubber-stamped like every other Bill that has been introduced here? I would like the Minister to address this issue.
The Senator has not voted against a Bill and she should allow me my time. Will the Minister apply the Whip to this legislation? I need to know that because Members have been nominated by organisations that are odds with the legislation.
On 13 October 2015, the Minister said in his Budget Statement that "the days of spending cuts are behind us". He further said, "I am pleased to report that due to our strong recovery and stable public finances, it is the second budget in succession in which we are able to increase support for our public services". Where is the need for a Bill dealing with FEMPI? Is there an emergency or not? That needs to be addressed.
The pain suffered by public servants since the first FEMPI Bill was passed in 2009 goes far beyond a reduction in pay. Based on promises made during the various industrial relations agreements - Croke Park, Haddington Road and Lansdowne Road - backed by the threat of FEMPI legislation, which was unnecessary, public servants have delivered huge increases in productivity. However, the Government parties have failed to deliver on their side of the bargain as promised. Who would expect or believe they would now change and live up to those promises?
The Minister seeks to use, once again, coercive powers in this legislation for another three years to extend the additional working hours for teachers, lecturers in institutes of technologies and members of An Garda Síochána beyond the period set out in the Haddington Road agreement. Have the Minister and the Government considered the damage that is being to the education system and policing by forcing these measures through?
The credibility of the Government is now at stake. Let us take, for example, An Garda Síochána. The Garda was promised a review under an appendix to the Lansdowne Road agreement which would cover structural, human resources-industrial relations issues together with remuneration.I am not sure what has happened in regard to the structural review but only one serious meeting has taken place with respect to the IR and remuneration issues. Surely to God, given that we are long past the Lansdowne Road agreement, something should have happened by now. Does the Minister really expect organisations to co-operate with the Government, a Government that is guilty of such breach of trust? I understand today that the AGSI, which represents higher grades in the Garda, has joined the Garda Representative Association in refusing to continue the additional free hours of duty demanded under the Lansdowne Road agreement. That stops on 31 December 2015. I understand both organisations will continue to work the Haddington Road agreement until 1 June 2016 but will not participate in any part of the Lansdowne Road agreement. It appears to me that the Government is on a collision course with the Garda in 2016.
In regard to education and casualisation, there is nothing in the FEMPI Bill which will ease the lives of those teachers and lecturers, mostly under the age of 35, who continue to be part time or in temporary posts. Lecturers in our institutes of technology continue to deliver between eight and ten class delivery hours more than their international peers. The number of lecturers has been reduced by 10% while student numbers are up by 20% and funding has been cut by 32%. How long does the Minister expect the education system that is becoming so under-resourced to provide the quality of student graduates for whom the likes of Apple, Google, Facebook, etc. will come to this country? Yesterday we all welcomed the merger between Pfizer and Allergan. Will Ireland continue to attract these large international foreign direct investment players with the current number of lecturers? I believe it is time to start listening to educationalists. It is important to note that teachers and lecturers have not sought one cent in pay increases. All they have asked for is that the Minister negotiate with them on the additional hours foisted on them under the Croke Park and Haddington Road agreements. There is a serious issue and somebody needs to speak to the educationalists about those hours. They are detrimental to education.
The Bill sets out to begin a process of pay restoration for the public service. That is commendable, albeit that I do not believe the Minister needed a FEMPI Bill to do this. Are massive pay increases for senior Government personnel justified? The Taoiseach stands to gain €15,500, the Tánaiste €14,000 and Ministers €12,500.
I am just about to finish. A public servant on less than €24,000 on casual work will not benefit from the pay increases because they are calculated on the whole salary not the part salary. That is my understanding of it.
The very least we will do is for them. Pensions are a property right. They have been accepted as a property right in the courts so it is time to give a clear indication to pensioners of exactly when full restoration will take place. We need full dates. I appreciate the time the Acting Chairman has given me.
I welcome the Minister. To be honest and fair, he has consistently acknowledged that during the crisis the sacrifices of public servants and public service pensioners assisted in putting the country on the road to recovery - he mentioned that in his statement - while sustaining our public services. Therefore as economic growth returns and the economy is improving on a weekly basis and more people are going back to work and paying taxes and so on, it is right and proper, as stated by my colleague, Senator Hayden, that as everybody paid the price, everybody is due something back, be it on a gradual basis or otherwise.
Perhaps I can refer briefly to the famous agreement where councillors throughout the length and breadth of the country are regarded as public officers, some of whom have taken on tremendous additional work and some are working full time. Given that they paid the price as well and have taken on greater responsibilities, larger areas and more travel, I believe they are due some recompense. I hope that is part of the agreement for the future. I believe they are entitled to their just reward on a phased basis the same as everybody else.
I welcome the Minister. I listened to his contribution in my office and heard him say that something is being given back to all public servants with the lower paid getting the most proportionately. In principle I thought that sounded fair and reasonable. When I look at the detail and dig down there are a number of punitive measures in the Bill that are quite objectionable and it is not that fair at all in some ways. I believe some of these measures need to be deleted or amended.
Section 4 is draconian. It seeks to force unions into the Lansdowne Road agreement. If passed into law it will extend the potential to freeze increments for teachers and lecturers from 2016 to 2018.
I understand the INTO has but what I am trying to say is that the Minister is hitting at the democratic right of people to say "No" and is punishing them for exercising their right to say "Yes" or "No". This could lead to a loss of thousands of euro for teachers and lecturers throughout their career. This threat is disproportionate and wrong and it must be stopped but the effect of this is that it will split the profession. It is the children and the students who will be hurt. We need the very best people in teaching and Senator Hayden acknowledged that at one level. Just because they voted "No", I ask the Minister not to kill them forever. This is what I see happening here. Likewise the threat in section 10 to the restoration to the teachers' salary scale for payment for substitution and supervision must be removed. I understand the Minister is saying there will be-----
If that teacher voted "No" to the Lansdowne Road agreement will he or she receive the €1,000 for substitution and supervision work? That is my question to the Minister. If not, the Minister is punishing such teachers for exercising their democratic right. If teachers do not carry out the substitution and supervision work, somebody will have to do it and they will have to be paid. Why not pay the teachers who are doing this work and did it under the agreement with the expectation that it would be restored. Why undermine the teaching profession? Let us forget about the teachers for a minute and think of the good of the country and the fact that no country can survive without a good education system. That is the price that is being paid by hitting at the profession.
Equally the public service pensions reduction, PSPR, which was imposed on the pensions of retired public sector workers will be removed by the end of 2017 for approximately 80,000 of the 140,000 of those on a pension.However, while there is also a commitment to provide relief on the PSPR up to a cap of €900 for the remaining higher pensions, there is no commitment to have it removed in time. Many of our colleagues, retired or soon to retire, who have given invaluable service to society will, therefore, be adversely affected by this. Is the emergency over or not? I do not really believe it is over but because there is an election coming, it is over.
If it is over, the Minister should not hurt some over others. As we have all agreed, and the Minister agreed in the Dáil, a pension is a property right and the right to property is the second highest right in this land, after the right to life. How is this fair? The Minister should please assure our colleagues that their pension rights will be restored and give the date for that.
The overwhelming vote of members in the Teachers Union of Ireland, for example, not to accept the Lansdowne Road agreement is due in large measure to the fact that the agreement is utterly oblivious of teachers working casual hours. It is the worst job in the country. The Minister should listen to what I say. These people have had to spend up to six years training to be teachers, four years to get a basic degree and two years for a higher diploma, H. Dip. If some of those poor devils have only two classes a day that makes up ten or 12 hours a week, they cannot bank those and draw down social welfare for two or three days because the work carries across five days. Now, according to the Oireachtas Library and Research Service notes on this, if they earn up to €24,000 in casual pay, they will not qualify for any of these restoration measures. Is that true? If it is, the Minister is giving them the greatest kick in the tail. Approximately half of second level teachers under the age of 35 are in the unacceptable situation of being in part-time and or temporary employment. The Lansdowne Road agreement does not address this problem.
Lecturers in institutes of technology are on 18 to 20 hours a week. I was a lecturer in a teacher training college. We had a very high number of lecturing hours too but a good lecturer does three things: lecturing, which includes teaching and assessment; research; and connecting with the community, the town and the gown. If someone is teaching 20 hours a week with an average of four hours preparation per lecturing hour, they are incredible hours and are twice the Organisation for Economic Co-operation and Development, OECD, average. Does the Minister want quality teaching and outcomes or to have the lecturers running around like headless chickens? The Minister should not damage the profession. That is what is happening. I am passionate about this because I know the price the country will pay if we do not keep our standards high. I would like to hear the Minister’s response and on Committee Stage, we will have an opportunity to tease this out further. I want the Minister to answer Senator Craughwell’s question on whether the Whip will be applied to this Bill.
I thank all Senators for their contributions, passionate and otherwise. Most people in this House speak with passion and conviction and believe what they say. I listened with great interest to the views of all Senators. I thank Senator Mooney for his kind comments. It is interesting that sometimes the Fianna Fáil position is that everything we have done is wrong and awful and sometimes it is that we are only following what Fianna Fáil prescribed for us. I would be happy to debate that and no doubt in coming months, we will have a chance to do that with some interest.
Senator Mooney mentioned the front line as if only 70 nurses were recruited. In the past 12 months, as Senator Hayden said, there have been 4,000 new employees in the Health Service Executive, HSE, alone. Just over half of them are medical personnel, including 750 additional nurses, doctors and ancillary and support staff. We now have the highest number of doctors in the hospital system that we have ever had. We are still trying to recruit not only in the acute health system but in all other branches of nursing.
On the Garda pay issue-----
There are several plans to do that, for example, I have agreed with the Minister for Health to have an attraction allowance to get midwives because they are particularly scarce.
The Senator spoke about Garda pay and gave a figure. The starting rate for a garda now is €25,745 in year one, going up in 12 months to €28,000 and 12 months later to €29,834. That does not take account of quite generous allowances, particularly shift allowances and other allowances that gardaí have which very significantly supplement their pay from the beginning. I have discussed this with many gardaí and there is a bone of contention about an accommodation allowance that they used to have but no longer have. That was discussed in detail when we focused on allowances. People want to see more and more pay as core pay as opposed to being supplemented as it often was by an array of allowances that boggles people when they see the different things that were paid for in the past. That is a reasonable start. A staff nurse starts at €27,211.
This is the starting rate for anybody starting in An Garda Síochána. That is the basic pay, not taking account of allowances.
In respect of pensions, one of the first things I did was to create a single pension scheme for all public servants, including Members of the Oireachtas and judges. Every public servant recruited after 1 January 2013 is part of a single pension scheme. That took me a year, from 2011 to 2012. We estimate that will save approximately 35% in the cost and has brought down the liability of the State to approximately €98 billion from considerably above €100 billion. That was an important move.
Several Senators raised the two-tier pay such that new recruits started at 10% less. I am phasing that out. The Haddington Road agreement, section 2.31, puts in place an agreed process to resolve that. We needed to legislate for that in respect of the Judiciary. I have incorporated into this proposal a mechanism to equalise judicial pay as I have for teachers’, nurses’ and civil servants’ pay in the same way. They will progress very quickly to a common pay scheme. There was discordance in having a separate pay scheme. It was an emergency measure and I can understand why it was done when it was done to try to reduce cost.
Senator Norris raised a point about teachers’ pay generally, which was passionately reinforced by the last two speakers. The OECD compared pay scales of teachers across OECD countries and said Irish teachers are among the best paid teachers in the OECD. The figures, which were published very recently-----
-----relate to 2013.Irish teachers are paid, on average, 17% above the OECD median. OECD countries are the most developed in the world. I just want to put that on record. As a former teacher, I certainly do not think teachers are overpaid. I think they earn their keep. It is a very demanding job and has become much more demanding since my time in the classroom. We have been very fortunate to get some of the best people in the country. I am not saying this because I am a former teacher. We were good at recruiting very able people to the teaching profession to our great benefit.
I am determined to maintain pay rates so that we do not lose that.
I will move on and get through everybody's points if possible. A question was asked about side deals done in the Haddington Road process. I am responsible for the formal negotiation of the pay agreement. I negotiated two agreements, namely, the Haddington Road agreement and, latterly, the Lansdowne Road agreement. That is the formal agreement that is endorsed. It is the actual creature of the Labour Relations Commission, which is now the Workplace Relations Commission. It draws up the proposal having negotiated with everybody. It talks to us as employers and the unions and sets the proposals. That is the agreement - nothing else. When all the senior people in administration, the health service, local government, justice and every other area and senior trade union officials are almost captured in a building for weeks on end, although not everybody is involved in direct negotiations at any given time, many bones of contention that have been hanging around for years are resolved through bilateral discussions. It is a case of "Come here 'til I talk to you. This thing is hanging around. Would you settle this?" Matters are settled and then become what is known as a chairman's note. I reach agreement bilaterally with Senator Mooney and the chairman notes it so that it has some authority. I do not have sight of these notes. They are not part of the agreement and are not part of my business. Each Minister is reported to and there have been parliamentary questions to each Minister outlining what are these notes. That is a normal part of the process.
Senator Sheahan talked about maintaining the reforms, which is a really important part of what we need to do today. This is not a black-and-white issue. Several Senators asked whether the emergency continues to obtain. If they ask me whether we can afford to immediately restore €2.2 billion of the FEMPI legislative savings, the answer is an emphatic "No".
If Senator Craughwell wants to go to a court of law, he can put on his wig. I will attend as a witness and he can put me on the stand. I listened to the Senator and I want to answer his question. It is absolutely fanciful, as the Senator knows, to think that we could collapse FEMPI. Is the emergency on or off? That is a black-and-white question. We are emerging from the emergency. We need a path. Senator Hayden put it very well when she spoke about a path to full recovery. It would be fanciful in the extreme and ruinous for the country to think that the emergency is over and that we should find €2.2 billion to give back to public servants in the absence of further productivity. In fact, it would unwind-----
If Senator Craughwell is not interested in listening to me, I will stop talking but I am trying to answer the questions as honestly as I can. I do so through the Chair and try not to be heckled. I could not present proposals to this House to say that the emergency is over, that FEMPI is ended and that I must find said €2.2 billion. In fact, it would be more than €2.2 billion because it would be €2.2 billion plus 15 million hours of additional work for which I would have to compensate or lose it. What services would I cut? How many teachers would I get rid of to fund that? It would be impossible to do it in one fell swoop. I am finding an orderly path and I did not invent it. I negotiated it.
This is the most important thing I am going to say. This is an agreement negotiated with the public sector unions and that is the way the business of the State operates. We, as good employers, talk to the representatives of public sector unions. Senator Healy Eames wants me to say that is fine, those who want to do it can do it and those who do not want to do it are to get all the benefits without having to work the hours or do anything else. That is the not the way an agreement works. Members vote, the majority of ICTU determines it and the public sector committee of ICTU then agrees it or not. The public sector committee of ICTU formally notified me that congress, which is the representative body we recognise, had accepted these proposals. Let me be clear about this: the Government and I will honour to the letter every agreement - the Croke Park and Haddington Road agreements as well as the Lansdowne Road agreement - that is in place. No union needs to be fearful about that.
I mentioned the point made by Senator Sheahan. Senator Norris spoke about Members of the Oireachtas. I have not excluded them from the benefits of this. I have not excluded any group from the benefits of this for a very good reason. Again, I want to be clear about this. This is emergency legislation because cutting pay is a very unusual thing to do and can only be done in very clear circumstances when there is a national imperative to do so. I previously outlined the criteria for it based on the legal advice we have. One criterion is that the emergency must exist. The question of whether it still exists is a fair one. It still exists but the position is improving and we can unwind it gradually as things progress is made. Second, do the measures have uniform application? In other words, are they arbitrary in respect of any group? I cannot pick any group and say that I am going to exclude one category of public servants because I think they do not work hard enough or because it might be popular, for example, to exclude politicians. That is not possible. One cannot discriminate in this way in this type of legislation. The third issue is that there must be a contribution from the generality of the legislation that makes a contribution to the State. I can tell the House that €2.2 billion fits that bill. We need that money.
I will move on to the issue of additional hours and gardaí, an issue that was also raised by Senator Craughwell. It is important to put these things on the record of the House. Gardaí have agreed and have worked an extra three days per year. That is 30 hours a year. Civil servants are working an extra two and a quarter hours per week. Nurses, doctors and support staff in health are working an extra one and a half hours per week. Staff in the HSE are working an extra two hours per week. Staff in clerical management in the health services are working an extra two hours per week. Teachers are working an extra three hours per week. Academics are working an extra 78 hours per year while staff in local government are working an extra two hours per week. In the context of picking out one group that one feels is hard done by, one would not pick out the people who are doing an extra 30 hours per year when others are asked to do an extra two and a quarter hours per week. We needed people to step up to the plate in respect of the emergency. We will unwind this legislation but this will have to be done on a collective basis. It cannot involve one group saying that it alone will not participate in the agreement. Everybody is entitled to do that but they cannot say that they are demanding all the benefits of the agreement but they are not prepared to abide by the difficult aspects it contains. That is not possible. Why should a clerical officer working in a Garda station work extra hours if the person beside them says they will not do so but that they still want the benefits of pay restoration? We negotiate and agree these things. That is the way the system works and it does not work on the basis of people saying "I have rejected it and, therefore, I can have the benefits but not the responsibilities or the burdensome bits of it." I will move a bit faster. I am probably too long-winded. Senator Kathryn Reilly supports the Bill, which is welcome. She referred to the position of low and middle income earners under the LRA which was exclusively about low and middle income earners' pay. A public servant on €25,000 who is not highly paid will benefit under the Bill to the tune of 7.5%. He or she will get €1,875 back. A public servant on €175,000 - I am not sure what public servant that is - will get back 0.6% or €1,000. It is, therefore, geared towards the lowest paid.
I will do so seriatum, as I have written them down.
Senator Kathryn Reilly raised an issue that was also mentioned in the other House. There is a separate agreement which was formally agreed to under the HRA in respect of the unique third cut only for public servants earning in excess of €65,000. A schedule of repayments was provided for in the agreement. I will adhere to it because I am adhering to every bit of every agreement. That is what the Government and I will do.
Senator Cáit Keane referred to the substitution and supervision allowance, a matter Senator Fidelma Healy Eames raised in the context of section 10. Section 10(5) states this provision can be exercised "so as to effect an increase in remuneration as provided for in the collective agreement". This is the empowerment to subsume into the basic pay of teachers the substitution and supervision allowance which had been a stand-alone allowance. Teachers agreed to forgo the allowance for the past few years and for it to be subsumed, in two payments, into their core pay in 2016 and 2017. Section 10 gives me the power to do what I have agreed with the unions.
Senator Cáit Keane and others referred to the position of local councillors. I heard what she said. They are not public servants in the normal way and I will have that discussion to my colleague, the Minister for the Environment, Community and Local Government.
Senator Gerard P. Craughwell began his contribution by saying he would love to welcome me with open arms. I am informed by my colleagues that he has never once voted with the Government.
However, I cannot collapse the FEMPI legislation because I will not undo the economic progress we have made as a nation.
Senator Terry Brennan echoed what was said on the local authority members' issue.
Senator Fidelma Healy Eames talked about the punitive measures under section 4. I respect anybody who does not want to be part of a collective agreement, but people cannot be half in and half out. One cannot say, "I am not part of the collective agreement but, please, give me all of the good bits." Until the HRA runs out, we will honour it. It dovetails with the Lansdowne Road agreement, into which most unions have bought and that will happen from next year. If people wish to exclude themselves, that is their business. I would prefer if everybody was in because that would mean an orderly walk towards full restoration on a fair and negotiated basis, but union members cannot be allowed to benefit without fulfilling the negotiated agreement because their colleagues would expect them to do so.
If I was to accept that it was possible for individuals to opt out, it would collapse the agreement, as the Senators know full well.
On the issue of part-time workers, everybody will benefit pro rata. I cannot talk about individuals, but on a pro ratabasis, the benefits will apply to working time. If the Senator would like to outline me the details of a case, I will ask my officials to examine it.
I am asking the Seanad to allow me to give legislative effect to a negotiated agreement in the negotiation of which the great preponderance of public sector workers involved themselves, on which they have voted and they agreed to. Not everybody has done so, but the great majority have and that is the way collective negotiations happen in a civilised country. I want the authority of the Seanad to fulfil my part of the agreement because the Government and ICTU have agreed and we need to deliver on it in order that we can begin to restore the pay of public servants from 1 January.
When public sector pensioner organisations first approached me, I suggested they form one collective. They did and I have met them more than once since, while my officials met them throughout the process. I have agreed in parallel that public sector pensioners will have their pensions restored in three payments, the first of which will be made on 1 January 2016 and the others in 2017 and 2018. Everybody will get something back. Everybody on approximately €35,000 will benefit from full pension restoration in that period. I discussed the issue in the other House. I do not want to be maudlin about it, but Members have argued that there is greater urgency for pensioners to benefit from pay restoration than workers for obvious reasons. If circumstances improve, I will examine this issue again in the lifetime of the agreement. Everybody in receipt of a pension of approximately €35,000 will have his or her pension restored by the conclusion of the agreement. It will be open to the whoever occupies my office next year to work out the sequencing of the restoration of the balance. Some 80% of all pensioners will have their pensions fully restored under the Bill.