Mick Barry (Cork North Central, Solidarity)
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15. To ask the Minister for Public Expenditure and Reform the reason the FEMPI, financial emergency measures in the public interest, legislation is being kept on the Statute Book; and if he will make a statement on the matter. [18351/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am obliged under the legislation to undertake an Annual Review of the operation and effectiveness of the Financial Emergency Measures in the Public Interest Acts (FEMPI) which is laid before the Oireachtas by the end of June each year.

In my last review of the necessity for the continuing application of the measures provided for under the Acts, my decision was informed by the instability in the international economy (including risks posed by Brexit), the still fragile nature of our economic recovery, the need to protect hard won competitiveness gains, the high level of debt, the continuing fiscal deficit, the obligation to comply with the Stability and Growth Pact, and the need to balance competing demands within the available fiscal space. To date none of these factors have lessened appreciably, while the risks of international economy instability have, if anything, increased.

The Lansdowne Road Agreement (LRA), has provided a negotiated pathway for public service pay increases through a phased partial unwinding of the FEMPI measures at a full year cost of €844m in 2018 and represents a considerable investment in public service remuneration. A comprehensive Collective Agreement of this kind allows for strong fiscal planning, with budget allocations ring-fenced within multi-annual expenditure ceilings and pay increases taking an appropriate share of available fiscal space. This phased and sustainable programme of pay increases underpins the fiscal targets in Budget 2017 and our international commitments to have a prudent fiscal policy under the Stability and Growth Pact. In addition, the Public Service Pension Reduction (PSPR) is being significantly reversed in three stages under FEMPI 2015, via substantial restoration of the PSPR cuts on 1 January 2016, 1 January 2017 and 1 January 2018. The cost of these PSPR changes is estimated at about €90 million on a full-year basis from 2018.

This year's Annual Review will be informed by the Public Service Pay Commission which has been asked to provide input on how the unwinding of the Financial Emergency Measures in the Public Interest legislation should proceed. This input will also inform any future engagement with staff representatives on a successor to the Lansdowne Road Agreement that is both sustainable and affordable.