The decision taken by the government to exempt 655 senior public servants from the full impact of pay cuts in the public services is unfair and unjustifiable.

• It is unfair because it means people on the lowest pay in the public service will see a reduction in their take home pay of 5%, but these priviledged people will just escape with just a third of that cut.
• It is unjustified, because it flies in the face of the recommendation of the Independent Review Group on higher renumeration who recommended a cut of between 8% and 12% for this group.

At Budget time, the government accepted the recommendation of the Review Group in full. Two weeks later following a government decision, the Minister issued a direction under Section 6 of the Financial Emergency legislation exempting these top public servants from the proposed pay cut. The legislation is very clear and directs that the Minister may only do this if there is a “substantial inequity” and if it is “just and equitable in all the circumstances”. Remarkably in the time since that decision was taken, explanations offered by government as to why the decision was made have ranged from the incredible to the downright inaccurate.

The Dáil is entitled to know how was this decision actually taken.

• Was there a government meeting or was it an incorporeal meeting, or was it no more than a nod from the Taoiseach?
• What evidence was assembled by the Minister for Finance to demonstrate to the government that “a substantial inequity” had arisen and that the change was “just and equitable in all the circumstances”?
• What consultation was held with the Review Group on higher renumeration, if any, on the about-turn by the government on the acceptance of the Group’s recommendation?

The Financial Emergency legislation which introduced pay cuts was viewed by most people as already very unfair in that it asked those on lowest pay to take bigger proportionate cuts in their disposable income than those further up the earnings ladder. This was a hard pill for low-paid people to swallow and has caused great resentment across the public service. A decision to rebalance this deal to make it even more unfair to the lower paid was an extraordinary and exceptional decision to make. The Minister must prove that this was made in conformity with the strictures set out for the exercise of such power.

The defence of this decision offered by government simply does not stand up to scrutiny.

The Tánaiste Mary Coughlan claimed in the Dáil that “with regard to the pay and conditions of assistant secretaries, the Review Body on Higher Level Pay indicated that the bonus was indicatively part of their salary”. In fact, the Review Body said precisely the opposite. It was fully in the knowledge that performance pay had been suspended, that it made the recommendation that the pay reductions that should apply to assistant secretaries and deputy secretaries should be 8% and 12% respectively. Indeed they went on to recommend that the bonuses should remain suspended until 2012 at the very least.

The Taoiseach Brian Cowen argued that the presence of the bonus scheme over the years was taken into account in setting the pay levels of these grades, and that they did not enjoy the pay increases that they would otherwise have obtained. However, once again the evidence completely contradicts this.

• Since October 2000, Assistant Secretaries and Deputy Secretaries have enjoyed a 78% increase in their pay. This compares to an increase of only 48% for clerical officers (i.e. in percentage terms, these groups enjoyed a pay increase that was nearly two thirds higher than the lower grades).
• The increase of a Deputy Secretary in absolute terms at €76,000 was ten times that of a Clerical Officer at the lowest end of the scale.

The Minister for Finance argued that in applying the recent reductions in pay the government considered that account had to be taken of the reduction in the scheme of performance bonuses. He did not even advert to the fact that this decision by government was in direct contradiction of the recommendation of the Review Group on Higher Pay. The Minister further made out that the bonus scheme provided for an average payment of 10% of salary. This again is untrue. Time and again the Review Group insisted:

• “Awards must not be seen as an automatic addition to basic pay”.
• “It is particularly important that an award made in one year is not regarded as an entitlement to a similar award in subsequent years”.
• “Award schemes must avoid a perception that there will be something for everyone”.
• “Performance related rewards should not be pensionable”.

The Minister for Finance is now pretending that these were not essential ingredients for the bonus scheme. He is pretending it is equivalent to core pay which is fully pensionable. Or is he admitting that all these recommendations were ignored in the implementation? His decision today not only affects the immediate pay of these individuals, but shores up their pensions at higher levels than they are entitled to.