Leaders’ Questions 19.09.12

Deputy Micheál Martin: Some time ago the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, announced he would effect a transformation of the system of allowances in the public sector.  He stated he wanted to achieve savings of €75 million this year and €150 million next year.  There is no question this was one of the big ideas of the new Department of Public Expenditure and Reform.  If one analyses any of the commentators this morning, yesterday the Minister had to announce a humiliating climbdown, cave-in and huge retreat from his opening position.  At the time, the headlines were quite significant with regard to the transformation that was about to happen.  He was adamant he would achieve a fairly modest target of €75 million, which was less than 5% as it was €75 million out of €1.5 billion.  In the end the Minister was in a position to make only one change in allowances.  One allowance out of 1,100 was changed.

Deputy Brendan Howlin: One was abolished.

Deputy Micheál Martin: One out of 1,100.  This is an extraordinary outcome of very lengthy examination from a new, up and coming Department meant to cut a swathe through relics of the past.  Let us be honest, some of these allowances are relics and belong to a different era.  How did the Minister get into this scenario, leading people up the hill and back down again?  Will the Taoiseach outline the reasoning and rationale behind the Minister's endeavours?  These allowances include bus allowances of €4.40 where car parking spaces are provided, and many other examples exist.  We cannot target new entrants forever.  We cannot believe that new entrants must be targeted for all savings.  This will create its own problems down the line.  What is the rationale for the Minister's about turn on this?

The Taoiseach: The Croke Park agreement has been in situ for some time and has delivered in the sense of industrial peace and a significant reduction in the numbers working in the public sector and its cost.  The Government has set itself on a path to meet the budgetary targets we must meet while minimising the need for cutbacks to front-line public services.  The Government must meet its budgetary targets in a way which minimises cuts to front-line public services.  This means we must achieve the maximum possible savings which do not impact on services as a consequence.

Last week I instructed every Minister to respond to the Minister for Public Expenditure and Reform and me in respect of their best assessment of the maximum that can be squeezed from the Croke Park agreement, which we would like to see implemented in full in accelerated fashion.  This analysis by each Minister will be returned to me this week.  When I and the Minister, Deputy Howlin, assess this, I intend to convene a meeting of the Croke Park agreement implementation body and present the outcome to managers and unions.  Yesterday's Government decision and announcement by the Minister, Deputy Howlin, that the indicative target of €75 million, which he was honest enough to state, would not be met is a first step to dealing with the question of the maximum that can be squeezed from the Croke Park agreement.  The other side of this equation is the impact on front-line public services, and Deputy Martin is well aware of the difficulties in this regard.

All other issues are to be dealt with as this part of Ministers' assessment and the consideration of the outcome by the unions and the management of the implementation body.  I intend to call this meeting when the instruction given last week at Cabinet is before us.  The announcement yesterday by the Minister, Deputy Howlin, was in respect of new entrants.  He pointed out that while one allowance was abolished, 180 categories are to be changed and 200 others are to be reviewed.

Deputy Micheál Martin: I am trying to be constructive but that was a fairly pathetic response to the situation.  A letter was sent last week.  What have Ministers been doing for months on the Croke Park agreement?

Everyone was of the view that people were endeavouring to achieve and realise as many savings as possible over the past 18 months.  To state that a letter of instruction was issued last week is a rather pathetic response.  My point is that yesterday's announcement with regard to squeezing more out of the Croke Park agreement was about approximately €3 million out of €1.5 billion.  The Irish Fiscal Advisory Council's report which the Taoiseach more or less dismissed in his initial comments paints a very difficult picture for everyone in society and Government in terms of the challenges, specifically concerns about growth rates and their impact on deficit reduction, concerns about our capacity to effect the deficit targets we wish to reach and concerns about rising unemployment.  These are serious issues.

An Ceann Comhairle: Could we have Deputy Martin's supplementary question please?

Deputy Micheál Martin: The Taoiseach spoke about front-line services.  These are being cut.  This is about social solidarity.  We are speaking about some relics and outdated allowances while at the same time home help allowances are being cut. Hundreds and thousands of hours are being cut and across the board services for people with disabilities, as we found out only a month ago, are being cut savagely.

Deputy Micheál Martin: There is a need particularly in the context of the Irish Fiscal Advisory Council report, to invoke clause 1.28 of the Croke Park agreement to get people around the table and state that saving €3 million out of €1.5 billion is not a realistic outcome for a serious issue.  Surely this lack of success or any sense of achievement or realisation of savings is justification in itself for invoking clause 1.28 to convene a serious substantive meeting of everyone to get them around the table on such an issue.  Does the Taoiseach intend to do this?

The Taoiseach: Under the existing structure of the implementation of the Croke Park agreement, the cost of the public pay bill has been reduced by €2.1 billion and numbers have been reduced by 28,000, so fewer people are doing more work.

Deputy Micheál Martin: The numbers have nothing to do with the Croke Park agreement.

The Taoiseach: The public pay bill has been reduced by €2.1 billion and the numbers are down by 28,000, with fewer people doing more work.  Last year €1.4 billion was paid in allowances and premiums.

I already said to Deputy Martin in reply to his first question that when the best assessment of the Ministers, on government instruction of last week, comes in this week, it is my intention to call a meeting of the Croke Park implementation group, including unions and management, and to present the outcome of that analysis to it.

Deputy Micheál Martin: I am not talking about that kind of meeting but about clause 1.28.

The Taoiseach: We are interested in implementation of the Croke Park agreement in full and in as accelerated a fashion as possible.  That means we must look at all of the best and maximum assessments of what are the maximum savings we can get from the Croke Park agreement to minimise potential cuts in public services.  That is the equation.  We exceeded our deficit targets this year and last year.

Deputy Micheál Martin: The Taoiseach is lucky the CSO revised them downwards.

The Taoiseach: The Fiscal Advisory Council is an independent body and it is perfectly entitled to put forward its reports and make its assessments of what should be done.  As I said yesterday in reply to questions from other Deputies, that will be the subject of a debate in the House when people can put forward their suggestions and their views as to how we deal with this very challenging position.  Does anybody in the House think it is with any degree of pleasure that a Minister would stand up and say he or she is forced because of a particular position to have to reduce a front-line service?  That is why it is necessary that we look at the maximum savings we can get from Croke Park and squeeze that to the ultimate degree in order to minimise any potential impact on front-line services.  I will do that as soon as I have the assessments of Ministers and will present that outcome to the implementation group.