Private Members Business – Croke Park II


Dáil Éireann 23rd April 2013

Thank you for the opportunity to speak on this Motion.


Like many members of this House, I am disappointed that the Croke Park II proposals were rejected by the unions, but I believe that now that the proposals have been rejected, it is important that we properly explore the reasons why they were rejected and take on board the views shared in order to determine the best course of action.


There is no easy option to be taken, €300 million in savings still has to be found from the public pay bill and after the significant cuts to pay in recent years, there are no easy avenues to take on this occasion and the necessary cuts will be a cause of great concern for many public sector workers.


The pay and pensions bill currently accounts for over 35% of all public spending and so in order to bring the public finances back to a more sustainable level, that bill will have to be tackled. The savings necessary for this year are significant in terms of getting public spending back on track, but are also important in ensuring that Ireland’s finances are put on a more sustainable footing in years to come.


At all times, this Government has endeavoured to proceed on the basis of consensus, and thus a lengthy negotiation process took place before the proposals rejected last week were finalised. The proposals rejected last week would have seen €1 billion in savings delivered through a range of pay and productivity measures as well as workplace reforms.


The aim of the proposals presented last week was to protect the lower paid public servants and would have protected the core salaries of 87% of public service workers who earn under €65,000. I think that that fact has been lost somewhere in the fog of debate surrounding this issue.


Protecting the pay of 87% of those who earn under €65,000 is a very significant element of the deal rejected last week and I believe that this core protection was a key reason why many public service workers opted to vote for the proposals, although they contain many harsh measures.


If legislation is the route pursued, which I hope will be a last resort, it will institute pay cuts for public servants, members of the Oireachtas, the judiciary and will also involve cuts to pension payments of former public servants.


There was a perception abroad that front line workers were going to bear the brunt of these cuts, but I believe that the LRC Proposals were in fact more fair than the perception represents. For example a staff nurse working 22 Sundays and public holidays and twilight shifts every two weeks would have seen a reduction in 3.8% of gross pay or 2% of net pay.


Similarly, a Garda on the maximum scale would have seen a 3.6% gross or 2.3% net drop and a primary teacher on the tenth point of the scale would see a reduction of 3.5% gross or 1.9% net.


However, there are two points that are not represented by those figures. The first is that many of these families are already in considerable financial distress, having borrowed at the height of a property boom and now find themselves in negative equity struggling to make mortgage repayments. The second is the impact that workplace reforms will have, for example for teachers where supervision and substitution arrangements are being totally overhauled.


Another misconception relates to the number of public servants on very high salaries. As most public servants are only too aware, there are very few positions at the top end of the pay scale. One percent of public servants are on pay of over €150,000 and under the proposals rejected last week, a senior public servant on 175,000 would have faced a reduction of 7% gross or 5.9% net.


I welcome the fact that the Government is has requested the CEO of the Labour Relations Commission to contact the various parties involved in coming days to establish if further negotiation can yield results. Perhaps, a teasing out of the exact reasons why people voted no will point towards a possible solution and progress can be made in coming months.


I believe that one element of the entire set of proposals that needs to be looked at is the area of pensions. I note that the LRC recommendations do not relate to pensions currently in payment as the unions do not have a mandate to negotiate for pensioners. It is this Government’s stated intention to require public service pensioners to make a further contribution, ensuring an element of burden sharing from higher paid pensioners.


It will remain incredibly difficult to sell this deal while former Taoisigh, politicians and bankers enjoy huge pensions and I believe that this is an element that needs to be tackled. Many of those at the root of the problems we are now facing have apparently sailed off into retirement without as much as a backward glance at the trail of destruction they have left in their wake, free to enjoy over-generous pensions paid by a nation which simply cannot afford such generosity.