TDs approve minimum wage cut

 

Tipperary South Fianna Fail TD Mattie McGrath voted against the Government on the legislation to cut the minimum wage.

Despite his stance, the Government won the vote on the Financial Emergency Measures in the Public Interest Bill by 79 to 74 votes and it now goes to the Seanad.

Mr McGrath lost the party’s parliamentary whip in June last year over the stag hunting bill. He supported the Government in the Budget votes on Tuesday.

Green Party TD Paul Gogarty was repeatedly criticised by the Opposition for saying that while he supported a Labour amendment the Bill, he would vote against it. The Labour amendment would guarantee that staff already on contracts would continue to earn the €8.65 rate.

Earlier, an Opposition attempt to halt the legislation, which enacts the cut in the minimum wage by €1 to €7.65 for new entrants to the workforce, failed in the Dáil.

Fine Gael introduced an amendment to the Bill to defeat the measure at the end of second stage, which is the initial Dáil debate.

However, the Government had a comfortable majority, rejecting the amendment by 80 to 72.

The legislation also cuts the Taoiseach’s salary by €14,000, the Tánaiste’s by €11,000 and other Ministers’ by €10,000. In addition the Bill cuts public sector pensions by an average of 4 per cent, lthough in some cases the cut is up to 12 per cent.

During the debate this morning, Minister for Finance Brian Lenihan said it was unsustainable for Ireland to have the second highest national minimum wage in the EU.

“Deputies must accept this is no longer sustainable given the economic crisis which has pushed unemployment to new levels,” he said.

The policy was introduced in the boom years and contributed to pushing up the cost of employment and reducing Ireland’s competitiveness.

Mr Lenihan said the increase in long-term unemployment made the measure “all the more pressing”.

The Minister also stressed that the €40 million bonuses to be paid to AIB bank executives from before the start of the financial crisis in 2008 would be subject to the “highest rates of income tax” and would be fully taxed.

Mr Lenihan is to introduce an amendment to the Bill to tax all future bank bonuses by 90 per cent. He pointed out that no bank bonuses were paid in 2009.

The Minister insisted however that “any attempt to single out a group of tax payers for penal treatment in a retrospective way will of course be entirely impossible”.

However, Labour TD for Dublin Central Joe Costello said the €40 million to be paid out should be taxed at 90 per cent.

There could be an amendment to the Bill “in keeping with its title ‘Emergency Measures in the Public Interest’. Surely this is an emergency measure in the public interest.”

The Dáil yesterday passed the final stage of the Social Welfare Bill, which gives effect to the Budget cuts in welfare payments, by 80 votes to 76.