The Public Service Stability Agreement proposals on pay and pensions between the Government and public sector unions, announced yesterday at the Workplace Relations Commission, is affordable, sustainable and fair – for everyone.
It allows for the pay reductions, introduced to deal with the economic crisis, to be restored for all civil and public servants earning less than €70,000 by 2020.
It also sees public sector pensions put on a more sustainable footing by ensuring that public servants, except for the lowest paid, make a permanent additional contribution. This will apply in different ways for different groups, with those who will receive the most valuable pensions paying the most.
The total cost of the Agreement is about the same as the previous deal, known as the Lansdowne Road Agreement, at €887m for the next three years. It means that the lowest paid civil and public servants will receive pay rises of almost 7.5% between now and 2020, with those on higher salaries receiving just over 6%.
The Agreement recognises that without public servants, there can be no public services, and recognises, also, the huge contribution those working in the civil and public service have made to the improvement in our public finances and our economy.
But as Minister for Public Expenditure and Reform, I am acutely aware that I am the guardian of the public’s money and any agreement reached had to be fair to everyone- including taxpayers and those reliant on public services. I am satisfied that that we have made a good deal.
The Agreement means that we will still be able to pursue the other policies in the Programme for Partnership Government – policies that are vital to the social and economic future for our country.
By striking a deal that is affordable, we can keep our promises on tax reform while continuing to plan for increased investment in capital infrastructure that will improve public transport, upgrade our roads, and build homes, schools and hospitals. It also means we can continue to hire more teachers as more children reach school-going age, and pay pensions to the increasing number of retiring workers.
The pay proposals contained in the Agreement reflect wage trends in the wider economy. Those working in the private sector should note the comments of Ibec which said yesterday that “it appears that the proposed pay awards in the Agreement are on average in line with increases of between 2% and 2.6% [per annum] being seen in the private sector”.
Further, as is common in many private sector companies, if these proposals are agreed most civil and public servants will make a substantial, permanent contribution to the cost of their pension, thereby reflecting the value of public sector pensions.
These proposals see the greatest pay rises awarded to lower paid public servants, who are usually new entrants. The proposals also allow that because newer entrants to the public service will receive different pensions, they will make lower pension contributions.
I am also aware that specific sectors of our public service believe that recruitment and retention of staff is impacting upon service delivery. To deal with this, the Agreement charges the Public Service Pay Commission to conduct a comprehensive examination and analysis of specific sectors to objectively ascertain if such issues exist, and how best to solve them.
The Agreement recognises that as an economy, we face a number of threats to our future. As well as the continued high level of public debt, Ireland must – and will- ensure it is ready to face the challenge of Brexit. To do so, we must keep our public finances on a sustainable footing and invest as much as possible in our physical and social infrastructure. The Agreement allows us to do just that.
This is an agreement that is fair, that ensures the sustainability of the public finances and that allows us to invest in our economy.
I believe it deserves the support of us all.