Written answers

Thursday, 28 April 2022

Department of Public Expenditure and Reform

Public Sector Pay

Photo of Paul MurphyPaul Murphy (Dublin South West, RISE)
Link to this: Individually | In context | Oireachtas source

94. To ask the Minister for Public Expenditure and Reform if he will provide an assurance to trade unions that public sector pay increases will be at least in line with inflation; and if he will make a statement on the matter. [20851/22]

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

99. To ask the Minister for Public Expenditure and Reform his approach to calls for pay increases to match rises in the cost of living; the way he will calculate the affordability of such calls; and if he will make a statement on the matter. [21002/22]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 94 and 99 together.

Public service pay has been governed by a system of collective agreements since the Croke Park Agreement was negotiated in 2010. These collective agreements have helped to ensure that public pay is managed in a sustainable, affordable and orderly manner. These agreements have also enabled significant reform of public services and changes to work practices.

The current public service agreement is Building Momentum - A New Public Service Agreement 2021-2022. This Agreement is weighted towards those at lower incomes with headline increases of approximately 5% for the lowest paid public servants. These groups will also benefit more from other measures in the Agreement including the overtime rates and premia payment adjustments.

The Agreement provides for the following pay adjustments:

- A general round increase in annualised basic salary for all public servants of 1% or €500, whichever is greater, on 1 October 2021.

- The equivalent of a 1% increase in annualised basic salaries to be used as a Sectoral Bargaining Fund, in accordance with Chapter 2 of the Agreement, on 1 February 2022.

- A general round increase in annualised basic salaries for all public servants of 1% or €500, whichever is greater on, 1 October 2022.

Building Momentum is a two year Agreement, which is due to expire at the end of 2022. As the Deputies will be aware, public service unions and staff representative associations have sought a review of the current Agreement on the grounds that the assumptions regarding inflation, public finances and the projected deficit need to be revisited. The Agreement commits the parties to ‘prior engagement’ where assumptions underlying the Agreement need to be revisited.

It should be noted in this context that a number of measures have been agreed by Government in order to mitigate the impact of inflation. The cost of living package announced in February, combined with the earlier Energy Credit announcement, has a value of over half a billion euro. This comprises:

- A lump sum payment of €125 to recipients of Fuel Allowance to be paid in March;

- An increase in the Energy Credit payment announced in December from €100 exclusive of VAT to €200 inclusive of VAT;

- Applying the Budget 2022 increase of €10 in the weekly income threshold for the Working Family Payment from April rather than June;

- Further reducing the Drugs Payment Scheme threshold to €80 per month, having been reduced to €100 per month in Budget 2022;

- Reducing the maximum annual School Transport charge to €150 per family at primary level and €500 per family at post-primary level for the next academic year;

- A 20% reduction in PSO Public Transport fares from May until the end of 2022.

Additional measures of a temporary payment of €100 per week for every heavy goods vehicle for licensed hauliers and a further Fuel Allowance lump sum payment of €100 have since also been announced.

These expenditure measures, along with the excise duty reduction on petrol, diesel and marked gas oil introduced by the Minister for Finance and now extended until Budget day in October 2022, and the VAT reduction from 13.5% to 9% on gas and electricity bills until end October, amount to €1 billion in aggregate.

In terms of the review of Building Momentum, an initial constructive engagement has already taken place between my officials and ICTU and I am giving consideration the issues raised. I am also consulting with Government colleagues as to the appropriate way forward. Of course, Government acknowledges that current price pressures present particular challenges and are a source of concern - including for public service workers.

The Government is committed to the delivery of quality public services, and will continue to approach public service pay in a balanced way that is reasonable and fair to both public servants and the taxpayer.

It is important to remember that there are multiple challenges facing the economy and the Exchequer, and in this context the public service pay bill needs to be managed in a sustainable way. While inflation and cost of living pressures will form a key part of any discussions, it is also important to avoid measures that might exacerbate inflationary pressures.

Comments

No comments

Log in or join to post a public comment.