Pensions levy to hit public sector overtime

OVERTIME earnings of teachers, nurses, gardaí and other public servants will be subject to the Government’s pension levy aimed at cutting €1.4 billion from the public payroll.

Finance Minister Brian Lenihan said yesterday that public service pay increases will be looked at again in 2011 “without prior commitment” after the freezing of the next two pay rises due under the Social Partnership agreement.

He also confirmed that overtime and other non-pensionable items of public servant salaries will be subject to the levy of between 3% and 9.6% announced on Tuesday.

In a special Dáil debate on savings of €2bn on public spending, Mr Lenihan denied accusations that the Government had squandered the boom: “Perhaps as a Government we were over-ambitious in trying to meet the understandable demands of our people for more and better public services when the resources were there. The position now is quite changed,” he said.

“There is no use in beating ourselves up over this. We have to get on and do what we can and do it in a united way,” he added.

During the debate, Green Party leader John Gormley said those who brought the country’s banking system into disrepute should be held accountable.

Mr Gormley said changes to expenses regime for TDs announced last month “do not go far enough”.

He said: “We in Government need, more than anything else, to send a signal to the general public that corporate greed and responsibility will not be tolerated. This is the reason the Green Party wants to see new measures to deal with the remuneration of the senior management of our banks and to ensure that those who have brought our banking system into disrepute and caused untold damage to our international reputation are held fully to account.”

Mr Lenihan said €1bn will be saved by a decision to defer pay increases due to public servants in September 2009 and June 2010.

“Further discussions in relation to these increases will be held in 2011, without prior commitment,” he said.

Mr Lenihan said he would be establishing a mechanism to redeploy staff from different sectors of the public service including the Health Service Executive (HSE), local authorities and state agencies.

But he said this “gives rise to technical, legal and human resource issues that will require consultation with local management and staff unions”.

Defending the pension levy, Mr Lenihan told the Dáil: “I consider it important that the pay-related savings measures across the public service should be implemented as part of the comprehensive national effort to adjust incomes, with the aim of restoring competitiveness in national incomes generally.

“Let us be clear: this is not about targeting the public service. We are simply asking public servants to make the same adjustment that is taking place across the economy.”

He said: “I would appeal to all sections of our country to put their shoulders to the wheel and share in the national effort to deal with this unprecedented economic downturn.”

Junior Minster with responsibility for Overseas Development Aid, Peter Power, said despite cuts of €95m in Irish aid to poorer countries “we will remain the sixth most generous donor per capita terms in the world”.

Mr Power said it was “absolutely the intention” of the Government to increase overseas aid when the economy recovers.

“All aid budgets internationally are under pressure as the global economic crisis begins to effect both the developed world and the developing world,” he said.

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