Public service pay cuts yield €1.4bn annually in savings, Dáil told

The State is saving €1.4 billion annually from the cuts to the pay and pensions of public servants and Civil Servants, Minister for Public Expenditure Paschal Donohoe has said.

He told the Dáil this was the amount of earnings “currently not available” under the Financial Emergency Measures in the Public Interest (Fempi).

“The simple challenge we face is affordability,” said Mr Donohoe.

Responding to a series of questions on public-service pay, the Minister said progress could be made only in a way affordable to everybody.

He said progress had been made on the issue of pay for new entrants and further improvements would have to be done in tandem with advances on other issues raised in the House every week.

“That is what the Government is seeking to do,” he added.

Affordability

Independent Joan Collins said there were union members who worked in hospitals, schools, ambulance services and other public services.

“The issue of affordability for them relates to how they can continue to pay their way in society,” she added.

“Many of them have suffered massive cuts to their wages and household members have lost jobs.”

Ms Collins said they were still paying the same mortgage they were paying eight years ago.

“Rents are increasing, as are transport costs,” she added. “It is becoming very difficult for people to live and some even face evictions from their homes.”

Ms Collins asked how those workers could be asked to accept the argument on affordability when they saw bank chief executives getting increases and TDs receiving an increase of €5,000.

“There is no fairness in that and those workers will not accept it,” she added.

Mr Donohoe said in recent weeks and months Ms Collins and colleagues had called for the abolition of water charges, an end to the private collection of waste and an increase in the public transport subvention.

“The list goes on,” said Mr Donohoe. “She is calling for all these things to happen, but the question is how we do all of that and how we can pay for it.”

He said he was fully aware of the challenges people faced, and Ms Collins did not have a monopoly on making that point.

“However, it falls to me and the Government to try to find a way of making progress in these matters in a way that is affordable and fair to everybody,” the Minister added.

Successor agreement

The Minister said a successor collective agreement to the Lansdowne Road agreement needed to be negotiated.

The public-service pay commission had been tasked with providing an initial report to the Government on public-service remuneration in the context of Fempi 2009 and 2015 and would report in the second quarter of next year.

Fianna Fáil spokesman Dara Calleary said a catalyst was the Labour Court recommendation in the dispute involving gardaí.

Indications were that it would cost €50 million to implement, he added. He asked if the Government had outlined from where the money would come and whether it would require a supplementary estimate.

Mr Donohoe said he would work on the matter with Minister for Justice Frances Fitzgerald across next year.

“I acknowledge that accepting the recommendation has created a different set of consequences which the deputy is raising with me,” he added.