Peadar Tóibín (Meath West, Aontú)
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110. To ask the Minister for Public Expenditure and Reform if his Department has conducted any recent evaluation on public sector pay rates or the minimum wage in view of rising rate of inflation; and if he will make a statement on the matter. [56212/22]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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127. 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. [56284/22]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 110 and 127 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 pay agreement is ‘Building Momentum – A New Public Service Agreement 2021 – 2022’ which was due to expire at the end of 2022. As the Deputy will be aware, discussions concluded earlier this year between the parties to the Agreement following the triggering of the review clause in Building Momentum by public service unions and associations due to the increases in the cost of living.

These were challenging discussions given the impact high levels of inflation are having on living standards of workers but also because of the uncertainty in the global economic outlook. The Government’s aim in these talks was to strike the right balance and seek to achieve a deal that is fair and affordable to both taxpayers generally and public service employees.

The outcome of these discussions was a set of proposals put forward by the Workplace Relations Commission to extend Building Momentum for a period of 12 months to the end of 2023. Three additional pay adjustments totalling 6.5% are provided for under the Building Momentum extension over 2022 and 2023. These are:

- An increase in annualised basic salaries for public servants of 3% backdated to 2 February 2022.

- An increase in annualised basic salaries for public servants of 2% on 1 March 2023.

- An increase in annualised basic salaries for public servants of 1.5% or €750, whichever is greater, on 1 October 2023.

These pay adjustments have now been endorsed by relevant unions and representative associations and are in the process of being implemented.

The cost of theses pay adjustments under the extension to Building Momentum is estimated to be €1.6 billion spread over three calendar years - 2022, 2023, and 2024. This extension makes Building Momentum a three year pay deal. The extension acknowledges the higher than anticipated rates of inflation that have emerged since 2021 and in particular the impact of cost of living pressures.

The existing Building Momentum Agreement provided headline benefits of 3%. In total, including the existing Agreement and the extension, headline benefits over the lifetime of Building Momentum amount to 9.5%, or just over 3% per year.

In respect of public servants at lower pay levels, the extended Building Momentum provides for increases of 12.5% over its lifetime, which is an average of just over 4% per annum.

It should also be noted that Government has provided a winter cost of living package as part of Budget 2023 which contains temporary, targeted cost of living expenditure supports for individual households and businesses amounting to €2.2 billion which will be implemented in 2022.

An agreement on public service pay plays an important role in underpinning stability, minimising industrial unrest and supporting the continued delivery of reform and quality public services over the period ahead.