Ceann Comhairle, I am moving the Government’s counter motion that focusses on;
– the importance of the full implementation of the Lansdowne Road Agreement, encompassing 280,000 public servants in 22 trade unions, as providing a fiscally sustainable pathway to pay restoration
– reconfirms the importance of maintaining the link between the pay of TD’s and the Civil Service grade of Principal Officer for both pay reduction and pay restoration measures.
In doing so, I draw attention to the fact that the original motion is nakedly populist.
It is populist because it is borne of a desire to make headlines and not of a desire to make politics better or to add to the broader debate on pay policy in this country.
Just as we have seen in other countries, this motion is an attempt by a populist party to sow the seeds of disharmony and to create further distance between the electors and the elected.
I hope these efforts are thwarted this evening.
PUBLIC PAY POLICY
I do, however, welcome the opportunity the motion affords me to set out this Government’s public service pay policy at this crucial moment.
Specifically, I wish to address the events in the Labour Court last week.
As the House is aware, in an effort to resolve the Garda dispute, the State industrial relations institutions – the Workplace Relations Commission and the Labour Court – provided the Garda Representative Association and the Association of Garda Sergeants and Inspectors with an equivalent process to that provided under the Industrial Relations Acts to trade unions.
This provided the parties access to the Workplace Relations Commission and access to the Labour Court – the highest industrial relations dispute resolution mechanism in our system.
The subsequent recommendations from the Labour Court have provided the basis for a resolution of this dispute.
While the Government accepts the recommendations, subject to approval under ballot by the Garda Associations, they do have consequences.
My role as Minister for Public Expenditure and Reform is to ensure that the necessary resources are now made available to implement the recommendations within the budgetary parameters which have been set for 2017.
I will work with the Tanaiste and the rest of Government to deal with this challenge.
To speak more broadly, I would like to comment on pay restoration.
Between 2000 and 2008 the public service pay bill increased by €9 billion. Of that, €6.5 billion or 72% of the increase, was due to public service pay agreements.
This rate of increase in public service pay outstripped GDP and GNP growth rates and was simply unaffordable.
This rate of increase was based on cyclical buoyancy in tax receipts linked to the construction sector and was unsustainable.
Since the onset of the crises much hard work has been done to broaden the tax base and reduce expenditure to sustainable levels based on how much tax we actually collect.
I know the contribution public servants have made and are continuing to make to this recovery and their contribution, at a time when public servants like all workers in our economy are struggling to make ends meet, must not be underestimated.
Pay restoration must be linked to sustained improvements in the fiscal position, so that public service pay is at all times fully supported by the underlying economy and tax base.
Public servants, who have suffered painful and difficult cuts in their remuneration since 2009, recognise that public service pay policy that delivers unsustainable increases is counter-productive.
And as I have said many times before, the unaffordable pay increase of today is the savage, destructive pay cut of tomorrow.
Certain Deputies in this house believe that the economy has reached a point where long term expenditure commitments can be loaded on the tax base.
I do not agree.
I believe that the recovery has some way to go before it is felt in every house in this country.
PLANNING FOR A SUSTAINABLE FUTURE
The core objective of this government is, and should be, to continue to broaden and deepen this recovery.
We should not jeopardise this by putting all our available resources into pay restoration when so many competing priorities exist.
Indeed, if we make resources available for things like housing and childcare, thereby reducing the cost of living, we reduce the need for inflationary cycles of wage increases.
And we must be careful in our fiscal planning.
Just yesterday the Department of Finance published a paper which highlights the potentially severe impact on the Irish economy from Brexit.
Looking at the effect ten years after a UK exit, a so-called hard Brexit results in the level of GDP being 3.8 per cent below what it otherwise would have been.
As a result, the level of employment would be 2 per cent below what it would otherwise have been, with the unemployment rate nearly 2 percentage points higher.
While Government policy will seek to ensure that negative impacts on our economy will be minimised from Brexit, as a country we must be mindful at all times of the risks to our continued recovery.
Much as we would like to ignore or wish these risks away, they are real and must be addressed.
Among the considerations which informed the determination of the necessity for the continuing application of the measures provided for under the FEMPI Acts were;
- the instability in the international economy, including risks posed by Brexit,
- the still fragile nature of the 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.
It is in this context that public service pay policy has been and must continue to be framed as pay and pensions for public servants continues to account for some 33% of gross voted expenditure.
I believe that the unwinding of the FEMPI legislation is a medium term undertaking, which must be framed in the amount of fiscal space available, as this reflects the capacity of our economy.
It is this context that Deputies in this House will, should they chose to, accept the unwinding of the FEMPI measures on their salaries, just as any comparable worker in the public service would.
Sinn Fein deputies will know that Government Ministers opted not to take that increase.
But I am not going to impose such a decision on other Deputies in this House.
I note with interest the media reports at the weekend that Sinn Fein TDs are awarding themselves a €2000 increase in their own salaries, while continuing the charade of “donating” most of their salary to their Party.
I doubt many of their constituents care much for how Sinn Fein members say they only accept the average industrial wage while still costing the taxpayer the same as any other TD.
To this end, let them now put their money where the mouths are. I intend to facilitate the waiving of a portion of the salaries of Sinn Fein Party TDs, should they request it of me.
That way, the taxpayer saves the cost of that part of their salary they claim not to take.
I look forward to the Deputies’ responses.
In conclusion, Ceann Comhairle, the Lansdowne Road Agreement remains the cornerstone of Government pay policy.
It provides a level of certainty over a three year period to deliver an affordable and sustainable increase in public service pay totalling €844 million in 2018.
Crucially it allows for the phased unwinding of the financial emergency legislation, at a pace that allows for progress against the other demands on government expenditure.
The Agreement is also flexible enough to address particular sectoral issues such as restoration of supervision and substitution payments in the Education sector and the restoration of rent allowances to new entrants for firefighters and members of An Garda Síochana.
To ensure the continued recovery in our economy and to manage the many risks to that recovery, the Lansdowne Road Agreement underpinned by the FEMPI Acts 2009-2015 must continue to anchor public service pay policy.
I commend this counter-motion to the House.