James Bannon (Longford-Westmeath, Fine Gael)
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Question 82: To ask the Minister for Finance the reason a company should struggle to keep VAT and PAYE and other taxes paid, be unable to pay their own wages and yet have to see public servants getting pay increases in this time of economic crisis; and if he will make a statement on the matter. [18111/11]

Michael Noonan (Limerick City, Fine Gael)
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The financial crisis has affected and continues to affect all sectors of the economy and the public service has not been insulated from those affects. Public Servants have been required to make a significant contribution to the restoration of the public finances to a sustainable path. Among the measures introduced and impacting on the public service are:

·The general round pay increases under the terms of the Review and Transitional Agreement due in 2009 were not paid;

·A general moratorium on recruitment and promotion was applied to most of the Public Service, and incentivised early retirement and career break schemes introduced;

·A pension related deduction of an average of nearly 7% was applied to all the earnings of all public servants;

·A reduction in rates of pay and allowances took effect on 1 January, 2010;

·The Public Service Agreement provides for an effective pay freeze up to 2014; and

·More recently the Government has put in place pay ceilings for Senior Public Servants and CEOs of Commercial State Companies.

In addition to the specific measures applied to public servants, they are also subject to the general tax increases and expenditure cuts which have been the dominant feature of Government fiscal policy in recent years. While I understand the financial pressures which businesses are currently working under, similar pressures apply throughout the economy and no sector remains untouched by the economic crisis. However, the Government is determined that all sectors will make a fair contribution to the difficult measures necessary to effect our economic recovery.